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Safestore Holdings, the self storage operator, has reported a 17.6 per cent rise in pre-tax profit thanks to continued resilience in its niche sector in the commercial property market.

While most property companies have suffered a fall in their asset value, Safestore has been boosted by six new store openings, taking its property portfolio to £645m ($1,271) for the six months to April 30, a rise of 10.5 per cent.

Net asset value per share jumped 40.3 per cent to 144.7p over the six months, partly because of the store openings, and also as a result of a 12.4 per cent increase in its average rate per square foot to £23.55. Like-for-like revenue rose 14 per cent to £38.8m.

Pre-tax profit rose to £28.5m, from £24.2m in the same six months last year, although basic earnings per share fell 3.8 per cent to 10.96p.

Safestore now operates 89 premises in the UK and 20 in France, and intends to open three more stores this year, with a further 10 in the pipeline.

Like-for-like closing occupancy fell by 1.4 per cent to 2.73m sq ft, as the downturn in the housing market has begun to have an effect on its business.

The largest single client base is among people moving house, which means that the lack of transactions in the market will inevitably affect the demand for temporary self-storage space.

The average room size occupied shrank in the period, reflecting the fact that fewer people were using Safestore as a place to hold their furniture when moving house.

Steve Williams, Safestore’s chief executive, said: “We are seeing enquiries holding up well. The housing market will affect us if it gets much worse, but we are not reliant on that market.”

Mr Williams said that the business model had so far proven resilient, and benefited directly from an increase in revenue. The interim dividend per share was raised 10 per cent to 1.65p.

“We are selling fresh air with some tin around it so the costs are very fixed,” he said.

Copyright The Financial Times Limited 2017. All rights reserved.

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