Lok'n Store Share Discussion Threads

[gucci] 12/4/2007 16:47

looks like 350p stop to me mit

[mitzis] 12/4/2007 15:37

Substantial break out gucci but then we expected something was happening the last few days.
Volume rising nicely too as you say the chart looks great for further big rises.

[gucci] 12/4/2007 14:24

chart looks fab mit

[mitzis] 12/4/2007 11:46

Added a few this am gucci looks like a decent property play to me.

[gucci] 12/4/2007 11:41

sure is looking good mit

[mitzis] 12/4/2007 11:25

On wards and upwards now gucci.

[gucci] 12/4/2007 09:56

series of buys first thing today
l2 looking good

[gucci] 11/4/2007 09:49

noticed that something seems to have triggered a series of 5k buy trades at 9.18am

[gucci] 11/4/2007 09:38

nice trades today
breaking out

[wan] 11/4/2007 07:35

Vassily...As I said previously, I do not expect the previously shrewd/disiplined purchasing trend to change.

From the f/y results -

Subject to market conditions, it is our current aim to acquire between 2 and 4
centres per annum. Our current average centre size is 43,800 sq. ft. and this
may increase for new centres up to 60,000 sq. ft. or more. The exact timing of
centre openings will largely depend on market availability, and we will retain
our disciplined and flexible approach to site acquisition.

Also some of froth in the commercial property market can be aimed at second tier property ie smaller units and shops etc where yields have shrunk and raising rents is probably not an easy prospect. Further more prime property along with planning permision is generally in short supply, which will be another factor underpinning values. If its yield the pension funds are after, then self-storage offers yields far above traditional commercial property rents/leases etc...........cue the recent interest.

From the f/y results -

Lok'nStore is now taking a more active approach to yield management with average prices for self-storage units increasing 4% over the year. This compares favourably with the last several years where prices have only risen 0.5-1 % per annum. We have introduced a yield management system underlying our confidence that we will be able to increase prices by more than inflation for several years. Our average price for self-storage was #16.40 at 31st July 2006 which compares favourably with the average of #18.29 for the industry across the south-east. (Source: Self-Storage Association survey 2006). We believe that
there is room to continue to increase prices while retaining our price
competitive position in the market.

And just to add, on todays news, a report on how the majority of new house builds are two bedroom. This equates to less space and more need of 'long term' storage, bodes well for the immature UK self-storage market.


Regards, wan

[vassily] 10/4/2007 14:41

Seems there is an issue :

Wan: Are LOK waiting to benefit if prices should decline? With there relatively slow pace of expansion such a decline might be in their favour.

[gucci] 03/4/2007 12:04

lots of buys coming in
last mm at 266p
getting wired for a sharp upwards breakout imo

[mitzis] 02/4/2007 09:26

Great thanks Wan..

[wan] 02/4/2007 07:14

Mitzis...You need to look back to fully appreciate the detail I touched on above, from the 2006 interims -

"In Reading we have now received a planning permission for a new store on our
land immediately across the road from our existing Store. This will enable us,
in due course, to develop a prominent new self-storage centre providing
approximately 55,000 sq ft of storage space on the site, an increase of around
14,000 sq ft over the existing site."

LOK already owned this site, it was previously rented out. This move will free up the existing land for high density development, something LOK are somewhat experienced with.

From the 2006 results -

"In relation to the existing store at Reading, there is potential for redevelopment for residential use. Accordingly the site has been valued as an operating self storage site but with an additional uplift to reflect residential development potential, but recognising that this has yet to be obtained. The valuations also do not account for any further investment in existing centres since July 2006. While the Company does not envisage routinely revaluing its properties it will continue to do so when appropriate."

LOK has been working on Reading pp for sometime, one of the objections during this process (I have talked to the planning officer) was loss of employment land, so surely the new store helps address this element, other than that, and in my opinion only, it appears to fit both national and local planning policy. As usual time will tell.

Todays announcement is further confirmation of both rapid growth and the success of the new model, worthy of note then is that -

"The decision to acquire more new build site follows the success of Lok'nStore's first new build store at Farnborough overlooking the M3, which is trading well and provides a model for Lok'nStore's future development." -



This is the type announcement that will further focus the markets attention on the valuation gap between LOK and its peers.

Regards, wan

[mitzis] 31/3/2007 09:43

Does the pp apply to Reading or another site wan.. tia.

[wan] 30/3/2007 07:23

LOK back in the IC, small article re kingston sale, with an ic view of still good value especially compared with peers, cue my comment/comparison above.

Within the April results, an element I would like to see some detail on is, Reading, and how the new store plans are progressing and subsequently the planning permission progress for residential development from the released land that the new store permission facilitated. This element was not fully valued by the external valuers, Cushman & Wakefield. As I have said before, I think p/permission will be a case of when and not if, time will tell there though. In the meantime the market is starting to take a serious look at the wide valuation gap between LOK and it peers BYG and SAFE.

[johnrxx99] 28/3/2007 11:30

The rate psf depends on stores location but cv is clearly low. I have no doubt of potential but I'm cautious of getting in when a virtical climb is on.

[mitzis] 28/3/2007 10:31

Looks good to me Wan...I like the fact the Directors hold a sizeable issue of the company always a good sign to me.. cheers.

[gucci] 28/3/2007 09:58

last mm at 267p
reckon 300p before profit taking john
lots of buys coming in

[wan] 28/3/2007 09:51

A few thoughts/comparisons -

BYG has 43 storage centres open with a total self storage capacity of 2.57 million sq ft, with average annual rent per sq ft at £24.01

Safestore has 99 stores and a maximum lettable area of approximately 4 million square feet and a current lettable area of approximately 3.6 million square feet. For the year ended 31 October 2006, Safestore recorded a 22% increase in revenues to #64.3 million The segmental detail is not yet as available for Safestore but using what is (and assuming my math is ok), a small percentage of the Safestore revenue comes from sales of insurance etc, so the average annual rent will actually be below £17.86 per sq ft.

LOK has 21 stores and the average price for self-storage was £16.40 at 31st July 2006.

So the key data -

BYG average price per sq ft ...£24.01
Safestore...........................£17.50(my adjustment)
Lok'n Store........................£16.40

LOK's competitive pricing and low overheads gives plenty of room to expand and improve margins and profitability quite substantially.

So I thought this made for an interesting ratio -

Market cap divided by average rental per sq ft -

BYG...........M/cap.....£753.9m/£24.01= 31.39
SAFE..........M/cap....£467.7m/£17.50= 26.72
LOK...........M/cap.....£66.6m/£16.40= 4.06

If we apply a discount to the ratio of the other two and say multiply LOK's average rental per sq ft by 15, it equates to £246m i.e. a share price of £9.82, multiply by 20 and it equates to £328m i.e. a share price of £13.09. Obviously the other two are larger and their model far more mature etc, so there is bound to be a difference, but how large is debatable. Perhaps then at the 'very least' it indicates the direction we are heading, and at best how far any re-rating has to go. LOK's accelerated expansion plans/store openings will no doubt be a pivotal feature/factor.

I am not aware of the comparison/ratio being used before, so the above may be either, a poor comparison, or just plain rubbish, I would therefore welcome any thoughts/criticism by others.

Regards, wan

[johnrxx99] 28/3/2007 05:13

at this point, good luck guys. Looking at the chart a bit of profit taking could come about soon and give a slightly better in point - well, I hope so!!

[gucci] 27/3/2007 21:42

hi mit, bought some yesterday these look good for 300p

[mitzis] 27/3/2007 19:33

Nice to hear from you gucci bought in yesterday myself.. good luck.