Big Yellow fell almost 2% today after Morgan Stanley cut its forecast for the storage specialists.
The brokers downgraded Big Yellow to 'Underweight', saying that growth was stalling.
Occupancy growth during the quarter to 30 June 11 was only 105k sq ft (vs MSe 180k sq ft), and we cut our estimate for the 2011/12 occupancy rate from 63% to 61%. We have also adjusted our estimate for annual rental growth from 2% to 0%, to reflect increasing pressure on the UK consumer. We have a bullish view on the UK property sector as we think that its secure and highly visible cash flows will attract investors looking to hedge against inflation. However, BYG has relatively less visibility due to its relatively short leases of just 8 months vs. over 8 years for other UK property companies.
Big Yellow reported a 6% rise in first quarter revenue earlier this month.
The shares were down 5.1p to 294.9p.
.jpg?w=600)
