Big Yellow Group PLC

Annual Report & Accounts 2017

The UK's brand leader in

WE HAVE DELIVERED A STRONG PERFORMANCE IN 2017, ANOTHER YEAR OF REVENUE, CASH FLOW, EARNINGS AND DIVIDEND GROWTH. Big Yellow Group PLC is the UK's brand leader in self storage. Big Yellow now operates from a platform of 92 stores, including 19 stores branded as Armadillo Self Storage, in which the Group has a 20% interest. We own a further eight Big Yellow self storage development sites (including two extensions sites), of which two have planning consent. The current maximum lettable area of this platform is 5.4 million sq ft.When fully built out the portfolio will provide approximately 5.8 million sq ft of flexible storage space. Of the Big Yellow stores and sites, 96% by value are held freehold and long leasehold; with the remaining 4% short leasehold.

The Group has pioneered the development of the latest generation of self storage facilities, which utilise state of the art technology and are located in high profile, accessible, main road locations. Our focus on the location and visibility of our Big Yellow stores, coupled with our excellent customer service and our market leading online platform, has created the most recognised brand name in the UK self storage industry.

WE ARE… BRITAIN'S FAVOURITE SELF STORAGE COMPANY

WELCOME

We continue to deliver year on year growth in all of our key operating

metrics. Since flotation, we have delivered a total shareholder return with dividends reinvested of 14.7% per annum.

stay ahead of the game.

HIGHLIGHTS OF THE YEAR

CONTINUED GROWTH IN OUR KEY OPERATING METRICS.

FINANCIAL HIGHLIGHTS

Financial metrics	Year ended 31 March 2017	Year ended 31 March 2016	% Growth
Revenue	£109.1m	£101.4m	8
Like-for-like revenue(1)	£107.3m	£101.4m	6
Adjusted profit before tax(2)	£54.6m	£49.0m	11
Adjusted diluted EPRA earnings per share(3)	34.5p	31.1p	11
Dividend – final	14.1p	12.8p	10
– total	27.6p	24.9p	11
(5) Free cash flow (after net finance costs and pre working capital)	£58.3m	£53.3m	10
Store metrics
Occupancy growth(4)	188,000 sq ft	185,000 sq ft	2
(1,4) Occupancy – like-for-like stores (%)	78.1%	75.3%	2.8 ppts
(4) Average net achieved rent per sq ft	£26.16	£25.73	2
Statutory metrics
Profit before tax	£99.8m	£112.2m	(11)
Cash flow from operating activities (after net finance costs)	£56.0m	£55.5m	1
Basic earnings per share	63.6p	71.9p	(12)

(1) Like-for-like metrics exclude Nine Elms and Twickenham 2 (acquired April 2016).

(2) See note 10.

(3) See note 12.

(5) See reconciliation in Financial Review.

⁽⁴⁾ See Portfolio Summary and Operating and Financial Review.

THE MARKET LEADING BRAND, WITH THE LARGEST ONLINE MARKET SHARE.

CONTINUED GROWTH

> Like-for-like occupancy increased by 2.8 ppts to 78.1%
> 11% increase in adjusted earnings per share and total dividend
> Free cash flow (after netfinance costs and pre working capitalmovements5) up 10% to £58.3 million
> Acquisition of four store Lock and Leave portfolio in April 2016 for £21million
Nine Elms and Twickenham acquired by Big Yellow (combined MLA of 87,000 sq ft)
Canterbury andWest Molesey acquired by Armadillo (combined MLA of 65,000 sq ft)
> Acquisition by Armadillo of three stores from the Quickstore portfolio (Exeter, Plymouth and Torquay, combined MLA 92,000 sq ft) in April 2017 for £4.75 million
> Acquisition in May 2017 of prime London site on the Highway inWapping, just east of the City, for future redevelopment

WE BELIEVE THAT BIG YELLOW'S MARKET LEADING BRAND AND OPERATING PLATFORM CAN DELIVER ATTRACTIVE AND SUSTAINABLE GROWTH OVER THE MEDIUM TO LONG TERM FROM ITS EXISTING PORTFOLIO.

A Year of Further Achievement

But our focus remains on the Future

Nicholas Vetch, Executive Chairman of Big Yellow, commented:

"Trading over the last few months has been better than we anticipated, and is encouraging as we head into our seasonally stronger summer trading period.Nevertheless,theseareuncertaintimesandweremainfullyprepared for any economic reversals which could cause demand to fluctuate.

We can expect to break through 80% occupancy this summer putting us within touching distance of our (for the time being) long held goal of 85%. Occupancy gain remains the primary point of focus.

As our vacant capacity reduces, itincreases the imperative to createmore. The tight supply of land in our core areas of activity, and a planning regime broadly focussed on housing, remain very significant barriers for our competitors and ourselves. We have the required property and planning skills, an ability to take the necessary risks, a strong balance sheet and we are prepared to take long term views. These factors work in our favour but unlocking new opportunities for new stores remains challenging.

That said,we believethatBig Yellow'smarketleading brand and operating platformcan deliver attractive and sustainable growth over themediumto long term from its existing portfolio."

DRIVING OCCUPANCY, REVENUE AND CASH FLOW GROWTH

+2.8PPTS Like-For-Like

Closing Occupancy

Average Achieved

+8%

Revenue

+11%

Adjusted Profit Before Tax

Net Rent Per Sq Ft

Free 1 Cash 0 Flo % w (after net finance costs and pre working capital)

+11%

Adjusted EPRA Diluted Earnings Per Share

BY CREATING A POWERFUL NATIONWIDE BRAND, BIG YELLOW IS FRONT OF MIND FOR MORE CUSTOMERS IN OUR MARKET THAN OUR COMPETITORS, WITH SIGNIFICANT POTENTIAL TO INCREASE THIS BRAND AWARENESS.

Our Competitive Advantage

The things that set us apart

> UK industry's most recognised brand
> Prominent stores on arterial or main roads, with extensive frontage and high visibility
> Largest share of web traffic from mobile and desktop platforms
> Strong customer satisfaction and NPS scores reflecting excellent customer service
> Largest UK self storage footprint by Maximum Lettable Area ("MLA") capacity (Big Yellow and Armadillo combined)
> Primarily freehold estate concentrated in London and South East and other large metropolitan cities
> Larger average store capacity economies of scale, higher operating margins
> Secure financing structure with strong balance sheet

WE PUT THE CUSTOMER AT THE HEART OF OUR BUSINESS

BIG YELLOW IS WELL PLACED TO BENEFIT FROM THE GROWING DEMANDS FOR SELF STORAGE.

Reasons For Using Big Yellow

Overall Occupied Space 31 March 2017

Other 12% Business 12% Travelling 6% Student 10%

Decluttering 11%

Home Improvements 6%

Moving 43%

Demand Profile of Move-ins only year ended 31 March 2017

HOUSE MOVERS, EITHER IN THE RENTAL OR OWNER OCCUPIED SECTOR, CONTINUE TO BE A KEY SEGMENT OF OUR CUSTOMER BASE.

Our Marketplace

Demand for self storage comes from a number of different market segments

Housemovers,either in therentalorowneroccupied sector,continue to be a key segment of our customer base. Demand also comes from people decluttering their space constrained homes, treating Big Yellow as a spare room. Key life events which invariably create a need for storage are also an important driver of demand; maybe moving abroad for a job, inheriting possessions, getting married or separating, homeowners carrying out home improvements or students needing space during the holidays.

Our business customers range across a number of industry types, such as retailers, e-tailers, professional service companies, hospitality companies and importers/exporters. These businesses store stock, documents, equipment, or promotional materials, all requiring a convenient flexible solution to their storage, either to get started or to free up more expensive space.

There is a growing trend towards self-employment and smaller business start-ups in the UK, dynamics which are positive for self storage. Additionally, businesses in the UK are increasingly seeking more flexible lease arrangements for their office and storage space. The deindustrialisation of big cities also points to a structural growth in demand for storage for businesses.

STRONG GROWTH OPPORTUNITIES

WE ARE ALWAYS LOOKING FOR INNOVATIVE WAYS TO HELP OUR CUSTOMERS' LIVES AND MAKE THE BUSINESS MORE ENVIRONMENTALLY SUSTAINABLE.

Innovation

Always looking to the future

We continuously improve our digital channels to provide our website visitors with an online experience which is quick, user friendly and provides comprehensive information on how Big Yellow works.

OnlineFAQs,livechat, videoguides,intuitiveroomsizeguidesandonlineprices help guide peoplethrough the processwhen choosing space. Theability toreservespace online and a speedy online check in service also help provide our customers with a stress free experience.

Our online BoxShop allows customers to buy boxes and packing materials online and have them either delivered to their home or pick them up from store with our Click and Collect service.

Innovativebuildingdesign ispartofourcommitmenttoamoresustainablebusiness. Weincorporatethelatesttechnologies suchasenergy efficient LED lightingandsolar panels to reduce our carbon footprint and produce our own renewable energy.

CONTINUALLY IMPROVING OUR DIGITAL PLATFORMS

WE PROVIDE THE HIGHEST LEVELS OF SECURITY IN THE UK SELF STORAGE INDUSTRY. WE HAVE INVESTED SIGNIFICANTLY TO ENSURE OUR CUSTOMERS ENJOY PEACE OF MIND.

Security

Ensuring our customers have peace of mind

We take security very seriously and are the only major UK operator where every roomis individuallyalarmed. Customersaccess thestorageareasand their own rooms using a PIN code which is unique to them.

We have staff on site seven days a week and CCTV which is monitored 24 hoursaday.Perimeter fencingandelectronicgatesprovideanadditional layer of security.

Allofour stores aremodern and brightly lit and aresituated in safelocations, easily accessible from main roads.

Security and vigilance is communicated to all store staff and reinforced through regular training.

THE HIGHEST LEVELS OF SECURITY IN THE UK SELF STORAGE INDUSTRY

WE HAVE AN UNRIVALLED PORTFOLIO OF STORES ACROSS LONDON, THE SOUTH EAST AND LARGE METROPOLITAN CITIES. London

– 44 stores and sites

Current maximum lettable area

Development pipeline is in excess of 450,000 sq ft with an estimated cost to complete of £70 million

Our Portfolio

An extensive national network

Our customers like our modern, highly visible, purpose built stores which are situated in easily accessible locations.

In the year, Big Yellow has acquired two stores from Lock and Leave at Nine Elms and Twickenham. Armadillo purchased Canterbury andWest Molesey from the same operator.

In April 2017, Armadillo acquired three stores in the South West from QuickStore. In May 2017, Big Yellow acquired a prime development site in Wapping. This adds to our development pipeline which also includes Kings Cross, Camberwell, Battersea and an extension to our Wandsworth site in London with other sites in Guildford, Manchester and Newcastle.

We have an unrivalled portfolio across London, the South East and large metropolitan cities, with a network of 92 stores.

HIGHLY VISIBLE STORES REINFORCE OUR BRAND 24/7

73 EASY TO FIND, HIGH PROFILE LOCATIONS PROVIDE CONVENIENCE FOR CUSTOMERS AND UNMISSABLE EXPOSURE FOR THE BIG YELLOW BRAND. 19 ARMADILLO STORES FURTHER BROADEN OUR NATIONAL COVERAGE.

High profile locations.

Outside London – 54 stores and sites ALL OF OUR PEOPLE SHARE A PASSION FOR DELIVERING THE SERVICE OUR CUSTOMERS DESERVE, HELPING THEM GET THROUGH STRESSFUL LIFE CHANGES SUCH AS MOVING HOME.

That is our Brand.

Our Unrivalled Service

A Brand based on People

We are aboutmuchmore than just storage.We are about people and their possessions. Whether it's a house move, setting up a business or a DIY project, we understand these are allkey lifemomentswhereit can get a bit stressful. At Big Yellow,our people help to take the stress away. We work hard to understand our customers' requirements and give the best service possible whether it is face to face, over the phone or through our user friendly website, mobile site or online chat. Our customer support centre is also on hand seven days a week to provide an additional layer of customer service.

Excellent customer service is at the heart of our business. We measure customer service standards through a programme of mystery shopping and online customer reviews which are externally managed. Over the year, we have achieved an average net promoter score of 77 which we believe compares favourably to other consumer facing businesses.

Customer reviews are published on the website and show an extremely high level of satisfaction. We also invite customers to submit reviews to a third party review site which are currently averaging 9.5 out of 10.

OUR PEOPLE ARE OUR MOST IMPORTANT ASSET

Chairman's Statement
Strategic Report
Our Strategy and Business Model
Operational and Marketing Review
Portfolio Summary Big Yellow Stores
Our Stores
Portfolio Summary Armadillo Stores
Store Performance
Financial Review
Principal Risk and Uncertainties
40 Corporate Social Responsibility Report
58 Independent Assurance Statement on the Corporate Social Responsibility Report
Directors, Officers and Advisers
Directors' Report
Corporate Governance Report
Report of the Nominations Committee
Remuneration Report
Audit Committee Report
Statement of Directors' Responsibilities
Independent Auditors' Report to the Members of Big Yellow Group PLC
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Reconciliation of Net Cash Flow to Movement in Net Debt
Notes to the Financial Statements
Company Balance Sheet
Company Cash Flow Statement
Company Statement of Changes in Equity
Notes to the Financial Statements
ibc Ten Year Summary

OUR MAIN FOCUS REMAINS ON DRIVING EARNINGS THROUGH OCCUPANCY GROWTH, AS WE TARGET OUR NEXT GOAL OF AN AVERAGE OF 85% OCCUPANCY ACROSS THE PORTFOLIO.

Growth

Of Revenue and Earnings

Big Yellow Group PLC ("Big Yellow", "the Group" or "the Company"), the UK's brand leader in self storage, is pleased to announce its results for the year ended 31 March 2017.

Against a backdrop of increased economic uncertainty,we are pleased to have delivered another year of occupancy, revenue and adjusted earnings growth. Our main focus remains on driving earnings through occupancy growth, as we target our next goal of an average of 85% occupancy across the portfolio.

Like-for-like closing Group occupancy is up 2.8 percentage points to 78.1% compared to 75.3% at 31 March 2016.

In the quarter to March, with less churn in the business and a more stable demand environment, we successfully increased occupancy by 115,000 sq ft, and by a further 54,000 sq ft in the current quarter to date (2016: quarter to date gain of 7,000 sq ft). As of 22 May 2017, our occupancy across the portfolio is 79.2%.

Average rental growth over the year was 1.7% with closing net rent of £26.03, representing an increase of 0.5% from the same time last year, with our focus remaining on driving occupancy in the stores. We remain focussed on occupancy gain with 85% (for the time being) our primary objective. It remains our firm belief that occupancy gains are hard won and are of significantly more value than short term increases in average rent. As our occupancy rises the rate growth will come through driven by our yield management systems.

Financial results

Revenue for the year was £109.1 million (2016: £101.4 million), an increase of 8%. The like-for-like revenue growth (excluding Nine Elms and Twickenham 2 acquired in April 2016) was 6%.

Free cash flow (after interest costs and pre working capital movements) increased by £5.0 million (10%) to £58.3 million for the year(2016: £53.3million).The Group's operating profit before property revaluations increased by £5.5 million (9%) to £65.3 million. The Group's statutory profit before tax was £99.8 million, compared to £112.2 million in the prior year.The movementis due to a lower gain in the valuation of the Group's investment properties in the current year compared to the prior year.

Given that our central overhead and operating expense is largely embedded in the business, this revenue growth has delivered an increase of 11% in the adjusted profit before tax in the year of £54.6 million (2016: £49.0 million). Adjusted earnings per share increased by 11% to 34.5p (2016: 31.1p) with an equivalent 11% increase in the dividend per share for the year.

The Group has net bank debt of £298.0 million at 31 March 2017 (2016: £295.0 million).This represents approximately 25% (2016: 26%) of the Group's gross property assets totalling £1,190.5 million (2016: £1,126.2 million) and 31% (2016: 33%) ofthe adjusted net assets of£963.4million(2016:£899.0million).TheGroup'sinterestcoverforthe year, expressed as the ratio of free cash flow pre working capital movements againstinterest paidwas6.2times (2016:6.0times).This is comfortably ahead of our internal minimum interest cover requirement of 5 times.

Investment in new capacity

Developing stores in our core area of London and the South East remains challenging. Sites are scarce, and faced with a housing shortage, policy makers are focussed on residential provision at the expense of commercial development. Despite the referendum result, we still expect London's population to continue to grow, intensifying these pressures. This makes the creation of new supply difficult and we are aware of only a handful of stores likely to open in London in the nextfewyears as legacy sites acquired before the downturn have now largely been opened. We believe that this leaves our existing platform almost irreplaceable. We and others are looking to acquire sites but even if successful, it can take three to four years to open a purpose built store.

We have commenced construction at Guildford Central in the year,with a planned store opening of March 2018, and have also started on the extension to our store at Wandsworth, which is planned to complete in April 2018.

After lengthy consultations we anticipate submitting planning applications on Battersea, Kings Cross andManchesterin the nextfew months, but as always the process is subject to the vagaries of the planning system.

We are pleased to announce that inMay 2017 we acquired an existing building on a 0.8 acre site on the Highway in Wapping, just east of Tower Bridge, with main road frontage, for £10.75 million. This is an area with very little supply of self storage and significant self storage drivers given the changes to the built environment over the past two decades, with high density residential and other mixed use schemes. A combination of self storage and short term tenancies under our ownership will provide an interim income while we investigate refurbishment or redevelopment options.

THERE HAS BEEN A FURTHER IMPROVEMENT IN OUR CUSTOMER NET PROMOTER SCORES TO AN AVERAGE OF 77 OVER THE YEAR, A VERY PLEASING RESULT.

The future cost of the current pipeline of eight development sites and extensions,with a potential capacity of over 450,000 sq ft, six ofwhich are subjectto planning, and includingWapping, acquired post year end, is provisionally estimated to be approximately £70 million. This excludes any net proceeds thatmay be received on the redevelopment of our Battersea store and adjoining retail units into a mixed use scheme of residential, retail and self storage.

The acquisitions of the Lock and Leave portfolio in April 2016 and the Quickstore portfolio since the year end are a continued demonstration of our willingness to buy existing stores for rebranding as either Big Yellows or Armadillos, from which we can drive performance through our market leading operational and digital platform.

Dividends

The Group's dividend policy is to distribute 80% of full year adjusted earnings per share.The final dividend declared is 14.1 pence per share. The dividend declared for the year of 27.6 pence per share represents an increase of 11% from 24.9 pence per share last year.

Our people

A business will only succeed if it has a fully motivated and engaged team. From the start we have always aimed to create a culture which is accessible, apolitical, non-hierarchical, socially responsible, and very importantly, a fun and enjoyable place to work.

During the year, we appointed an external consultancy to conduct an engagement survey of our employees, which delivered very pleasing levels of employee engagement of 90% in the stores and head office. In addition,we focus on customer service and engagement,measuring and responding to their feedback. Commensurate with the high levels of employee engagement,there has been a furtherimprovementin our customer net promoter scores ("NPS") to an average of 77 over the year, a very pleasing result.

I would like to thank all those in the business for their efforts in contributing to another year of growth.

Board

Mark Richardson has announced that he is stepping down as a Non-Executive Director atthe Group's next AGM. He joined the Company in 2008 and over the ensuing nine years has been an excellent Audit Committee Chair and a source of sound advice and judgement. I and the Board would like to thank him for his valued contribution to Big Yellow's success in his period oftenure. Itis ourintention to appoint his replacement as Audit Committee Chairman before the July AGM.

Outlook

Trading over the last few months has been better than we anticipated, and is encouraging as we head into our seasonally stronger summer trading period. Nevertheless,these are uncertain times andwe remain fully prepared for any economic reversals which could cause demand to fluctuate.

We can expect to break through 80% occupancy this summer putting us within touching distance of our (for the time being) long held goal of 85%. Occupancy gain remains the primary point of focus.

As our vacant capacity reduces, it increases the imperative to create more. The tight supply of land in our core areas of activity, and a planning regime broadly focussed on housing,remain very significant barriers for our competitors and ourselves. We have the required property and planning skills, an ability to take the necessary risks, a strong balance sheet and we are prepared to take long term views. These factors work in our favour but unlocking new opportunities for new stores remains challenging.

That said, we believe that Big Yellow's market leading brand and operating platform can deliver attractive and sustainable growth over the medium to long term from its existing portfolio.

Nicholas Vetch

Executive Chairman 22 May 2017

Strategic Report (continued)

Our Strategy and Business Model

Our Strategic Report

discusses the following areas:

> Our strategy and business model
> Operational and marketing review
> Store performance
> Financial review
> Principal risks and uncertainties
> Going concern basis and viability statement
> Corporate social responsibility

Approval

This report was approved by the Board of Directors on 22 May 2017 and signed on its behalf by:

James Gibson	John Trotman
Chief Executive Officer	Chief Financial Officer

Our Strategy

Our strategy from the outset has been to develop Big Yellow into the marketleading self storage brand, delivering excellent customer service, with a great culture and highly motivated employees.We continue to be the market leading brand, with unprompted awareness of seven times that of our nearest competitor (source: YouGov survey, April 2017). We concentrate ondeveloping our stores inmainroadlocationswithhigh visibility, where our distinctive branding generates high awareness of Big Yellow. Our accreditation in 2016 forthe Best 100 Companies towork for was pleasing as an independent assessment of our employee engagement, and our customer satisfaction survey scores remain very high, with an average customer net promoter score of 77, and average Trustpilot scores of 9.5 out of 10.

Self storage demand from businesses and individuals at any given store is linked in part to local economic activity, consumer and business confidence, all of which are inter-related. Fluctuations in housing activity whetherintherentedorowneroccupiedsector,arealsoafactorandinour viewinfluence the top slice of demand over and above a core occupancy. This has been demonstrated by the resilience of our like-for-like stores sinceSeptember2007despiteacollapseinhousingactivityandGDPover the period 2007 to 2009. As can be seen fromthe ten year summary,the performanceofourstoreswasrelativelyresilientduringthedownturn,and within that London and the South East proved to be less volatile.

Local GDP and hence business and housing activity are greatestin the larger urban conurbations and in particular London and the South East. Furthermore, people and businesses are space constrained in these more densely populated areas. Barriers to entry in terms of competition for land and difficulty around obtaining planning are also highest in more urbanised locations.

Overthelast18yearswehavebuiltaportfolioof73BigYellowself storage centres, largelyfreehold,purpose-builtandfocussedonLondon,theSouth East and large metropolitan cities. We have seen an increase in our weighting to London and the South East as a result of recent openings and acquisitions. 66% of our current annualised store revenue derives from within the M25 (2016: 63%); for London and the South East, the proportion of current annualised store revenue is 83% (2016: 80%).

Our Big Yellow stores are on average 63,000 sq ft, compared to an industry average of approximately43,000sq ft(source:The Self Storage Association 2017 UK Annual Survey). The upside from filling our larger than average sized stores is, in our view, only possible in large metropolitan markets, where self storage demand from domestic and business customers is the highest. As the operating costs of our assets are relatively fixed, larger stores in bigger urban conurbations, particularly London, drivehigherrevenues andhigher operatingmargins.

We continue to believe that the medium term opportunity to create shareholder valuewill be principally achieved by increasing occupancy and rental yield in our existing platform to drive revenue, the majority of which flows through to the bottom line.

Our key objectives remain:

> leveraging our market leading brand position to generate new prospects,principallyfromourdigital,mobileanddesktopplatforms;
> focusing on training, selling skills, and customer satisfaction to maximise prospect conversion and referrals;
> growing occupancy and netrent so as to drive revenue optimally at each store;
> maintainingafocusoncost control, sorevenuegrowthis transmitted through to earnings growth;
> selectivelyadding to theportfolio throughnewsitedevelopment and existing store acquisitions;
> maintaining a conservative capital structure in the business with Group interest cover of aminimumof five times; and
> producing sustainable returns for shareholders through a low leverage, low volatility, high distribution REIT.

In the seventeen years since flotation in May 2000, Big Yellow has delivered a Total Shareholder Return ("TSR"), including dividends reinvested, of 14.7% per annum, in aggregate 915% atthe closing price of 730.5p on 31 March 2017.This compares to 6.4% per annum for the FTSE Real Estate Index and 5.2% per annumforthe FTSE All Share index over the same period. This demonstrates the power of compounding over the longer term.

Our Business Model

Tried and Tested...

Attractive market dynamics	UK self storage penetration in key urban conurbations remains relatively low
	Very limited new supply coming onto the market
	Resilient through the downturn
	Sector growth is positive, with increasing domestic demand
Our competitive advantage	UK industry's most recognised brand
	Prominent stores on arterial or main roads, with extensive frontage and high visibility
	Largest share of web traffic from mobile and desktop platforms
	Strong customer satisfaction and NPS scores reflecting excellent customer service
	Largest UK self storage footprint by MaximumLettable Area ("MLA") capacity (Big Yellow and Armadillo combined)
	Primarily freehold estate concentrated in London and South East and other large metropolitan cities
	Larger average store capacity – economiesof scale, higheroperatingmargins
	Secure financing structure with strong balance sheet
Evergreen income streams	52,500 customers froma diverse base – individuals, SMEs and national accounts
	Average length of stay for existing customers of 24 months
	30% of customers in stores greater than two year length of stay
	Low bad debt expense (0.1% of revenue in the year)
Strong growth opportunities	Opportunities to drive further occupancy growth
	Yield management as occupancy increases
	Densification of living and scarcity of flexible business space drives demand
	Growth in national accounts and business customer base
	Increasing the platform financed from internal resources
	Growth in our Armadillo joint venture platform
Conversion into	Freehold assets for high operating margins and operational advantage
quality returns	Low technology & obsolescence product,maintenance capex fully expensed
	Annual compound adjusted eps growth of 17% since 2004/5
	Annual compound cash flow growth of 16% since 2004/5
	Dividend payout ratio of 80% of adjusted eps

Competitive Advantage Our Proven Model

Attractive Market Dynamics

Our

Strong Growth Opportunities

Evergreen Income Streams

Quality Returns

Strategic Report (continued)

Our Strategy and Business Model (continued)

The self storage market

In the recently published 2017 Self Storage Association UK Survey, only 42% of those surveyed had a reasonable or good awareness of self storage, in linewith findings fromour own research. Furthermore, only 6% of the 2,075 adults surveyed were currently using self storage, or were thinking of using self storage, in the next year. This indicates a continued opportunity for growth and with increasing use of self storage, together with the ongoing marketing efforts of everyone in the industry, we anticipate awareness will grow.

Growth in newfacilities across the industry has been largely in regional areas ofthe UK and in particularin smallertowns. In London in the last year, we believe there were eight new store openings.

The Self Storage Association ("SSA") estimates that the UK industry is made up of approximately 1,430 self storage facilities (ofwhich 317 are purely container operations), providing 42.2 million sq ft of self storage space, equating to 0.6 sq ft per person in the UK. This compares to 9.1 sq ft per person in the US, 1.8 sq ft per person in Australia and 0.1 sq ftformainland Europe,where the roll-out of self storage is amore recent phenomenon (source: FEDESSA European Self Storage Annual Survey 2016). 390 self storage facilities in the UK are held by large operators (defined as those managing 10 facilities or more), which represents 35% of the total number of self storage centres (excluding container operations), but the SSA estimate approximately 50% of total capacity. Given the dominance ofthe larger brands in the South East,we would expectthe proportion ofrevenue earned by the top five operators to be in excess of 60% of the annual industry turnover of £500 million.

Big Yellow is well placed to benefit from the growing self storage market, given the strength of our brand, and our online platformwhich delivers 87% of our prospect enquiries. Our portfolio is strategically focussed on London, the South East and large metropolitan cities, where barriers to entry and economic activity are at their highest.

KPIs

The key performance indicators of our stores are occupancy and rental yield,which together drive the revenue ofthe business.These are three key measures which are focussed on by the Board, and are reported on a weekly basis. Over the course of the past five years, both occupancy and revenue have grown significantly. Rental yield grewby 6.1% in the year to 31 March 2014, but decreased by 3.5%, in 2015 principally reflecting the acquisition of the Big Yellow Limited Partnership stores, a regional portfolio, with a lower average net rent per sq ft. In 2016 net rent increased by 2.7%, and has increased by 0.5% in the current year. Our key focus is on continuing to grow occupancy, with rental yield growth following once the stores have reached higher occupancy levels.

Adjusted profit before tax, adjusted earnings per share and distributions to shareholders are also KPIs. The Group focuses on adjusted profits and earnings measures as they give a clearer underlying picture of the Group's trading performance without distortion from external factors such as property valuations and the fair value of derivatives. We have delivered compound adjusted eps growth of 16% overthe pastfive years, and compound dividend growth of 26% over the same period. Compound adjusted eps growth since 2004/5 is 17%. We have illustrated the Group's performance in these measures over the past five years on page 1.

Our non-financial KPIs are the net promoter scores we receive from our customers and the carbon intensity oftheGroup's business.TheGroup's net promoter score received fromits customers during the yearwas 77. Thishasincreasedby27%overthepastfouryears,whentheGroupstarted tousethismeasureof customersatisfaction.Webelievethisoverallscore compares very favourablywith other consumerfacing businesses.

The Group has reduced its carbon intensity (our carbon emissions divided by our average occupied space) by 52% over the past five years. This has been achieved through investment in renewable technology,roofmounted solar photo-voltaic systems, and LED lighting across the Group's portfolio.

Operational and Marketing Review

Overview

We now have a portfolio of 73 open and trading Big Yellow stores, with a further six development sites and two extension opportunities.The current maximum lettable area of the 73 stores is 4.6 million sq ft. When fully built out the portfolio will provide approximately 5.0 million sq ft of flexible storage space.

In addition we part-own and manage 19 Armadillo stores which are principally located in northern towns and cities, and operate from a platform of 0.8 million sq ft.

Access to capital and bank facilities has improved in the last few years, however this is mainly for larger well-capitalised groups. Growth in new store openings over the last six years has averaged 1% to 2% of total capacity per annum, down significantly from the previous decade. Additionally, in our coremarkets in London and the South East, very high land values driven by competing uses such as residential, ismaking the creation of newsupply very difficultfor all operators.We believe thatwe are in a relatively strong position given the strength of our balance sheet and our proven property development expertise,togetherwith our ability to access funding to exploit the right opportunity.

FOR UNPROMPTED BRAND AWARENESS, OUR RECALL ACROSS THE UK AS A WHOLE IS MORE THAN SEVEN TIMES THAT OF OUR NEAREST COMPETITOR.

Operations

The Big Yellow store model is well established.The "typical" store has 60,000 sq ft of net lettable storage area and takes some three to five years to achieve 80% plus occupancy.The average roomsize occupied in the portfolio is currently 68 sq ft, a slightincrease from 67 sq ftlast year.The store is open seven days a week and is initially run by three staff,with a parttimemember of staff added once the store occupancy justifies the need for the extra administrative and sales workload.

The drive to improve store operating standards and consistency across the portfolio remains a key focus for the Group. Excellent customer service is at the heart of our business objectives, as a satisfied customer is our best marketing tool. We measure customer service standards through a programme of mystery shopping and online customer reviews, which are externally managed. Over the year, we have achieved an average net promoter score of 77, which we believe compares favourably to other consumer facing businesses.

We have a team of nine area managers in place who have on average worked for Big Yellow for twelve years. They develop and support the stores to drive the growth of the business.

The store bonus structure rewards occupancy performance, sales growth and cost controlthrough quarterly targets based on occupancy and store profitability, including the contribution from ancillary sales of insurance and packing materials. Information on bonus build up is circulated monthly and stores are consulted in preparing their own targets and budgets each quarter, leading to improved visibility, a better understanding of sales lines and control of operating costs.

We believe that as a consumer-facing branded business itis paramount to maintain the quality of our estate and customer offering. We therefore continue to invest in preventative maintenance, store cleaning and the repair and replacement of essential equipment, such as lifts and gates. The ongoing annual expenditure is approximately £35,000 per store,which is includedwithin cost of sales.This excludes our rolling programme of store makeovers, which typically take place every five years, at a cost of approximately £20,000 per store. Over the last five years we have invested £11 million in the upkeep and maintenance of our stores, all of which has been expensed in the income statement.

Demand

Awareness of self storage and themarket generallywill continue to grow as people use the productforthe firsttime andwithcontinuedmarketing from all industry players.We are seeing improving levels of referral and repeat use.

Ofouroccupiedspacetoday,15%isoccupiedbycustomerswhoarelonger staylifestyleusers decluttering into smallrooms as anextensionto their accommodation; 50% are using it for less than 12 months as a result of an event in their life, which could be inheritance, moving, carrying out work; and the balance of 35% are businesses,typically SMEs.

Of the customers moving into our stores in the last year, surveys undertaken indicate approximately 43% are house move related, split broadly equally across those renting storage space whilst moving within the rental sector and those moving within the owner occupied sector. During the year 11% of our customers who moved in took storage space as a spare room for decluttering and approximately 34% of our customers used the product because some event has occurred in their lives generating the need for storage; they may be moving abroad for a job, have inherited possessions, are getting married or divorced, are students who need storage during the holidays, or homeowners developing into their lofts or basements. The balance of 12% of our move-ins during the year came from businesses.

Our business customers range across a number of industry types, such as retailers, e-tailers, professional service companies, hospitality companies and importers/exporters. These businesses store stock, documents, equipment, or promotional materials all requiring a convenientflexible solutionto their storage, eitherto get startedorto free upmore expensive space.

Business customers typically stay longer than domestic customers, and also on average occupy largerrooms.Whilst only representing 12% of new customers during the year, businesses represent 20% of our overall customer numbers, occupying 35% of the space in our stores at 31March 2017, domestic customers occupy 65%.The average room size occupied by business customers is 121 sq ft, compared to 54 sq ft for domestic customers. This compares with the 2017 SSA UK Annual Survey result for the industry as a whole which had 58% of space occupied by domestic customers and 42% of space by businesses.We would expectto have a higher proportion of domestic customers given our focus on London and other large metropolitan cities.

Strategic Report (continued)

Our Strategy and Business Model (continued)

We have a dedicated national accounts team for business customers whowish to occupy space inmultiple stores.These accounts are billed and managed centrally. We have four full time members of staff working on growing and managing our national account customers. The national accounts team can arrange storage at short notice at any location for our customers. In smaller towns where we do not have representation, we have negotiated sub-contract arrangements with other operators who meet certain operating standards.

Marketing and ecommerce

Our marketing strategy focuses on driving enquiries and customer satisfaction through our digital platforms.

For the last eleven years, we have commissioned a YouGov survey to help us monitor our brand awareness. In our most recent survey, conducted in April 2017, we used a statistically robust sample size of 1,043 respondents in London and 2,028 for the rest of the UK. The survey has shown our prompted awareness to be at 74% in London, two and halftimes higherthan our nearest competitor and 41% forthe rest of the UK, nearly three times higher than our nearest competitor.

For unprompted brand awareness, ourrecall in London is47%, nearly six times higher than our nearest competitor and for the rest of the UK it is 21%, more than eight times higher than our nearest competitor. Across the UK as a whole it is seven times higher than our nearest competitor. These surveys continue to prove we are the UK's brand leader in self storage (source: YouGov, April2017).TheUKSelf Storage Association has also conducted a brand awareness survey with similar results.

Online

The Big Yellow website, whether accessed by desktop, tablet or smartphone, delivers the largest share of our prospects, accounting for 87% of all sales leads across the year ended 31 March 2017. Telephone is the first point of contactfor 9% of our prospects andwalkin enquiries, where we have had no previous contact with a prospect, represent 4%.

We have the largest online market share of web visits to self storage companywebsites in the UK. Across the year ended 31March 2017, our online market share of web visits ranged from 31% to 38%. Our nearest competitor ranged from 16% to 21% online market share for the same period (source: ConnexityHitwise 36 largest UK self storage operators). We monitor and improve the website user journeys on an ongoing basis. We are committed to making the experience as easy, intuitive and informative as possible for our customers. Both themobile specific website, which itself accounted for 42% of our web visits in the year and our desktop site are designed with helpful and time saving online tools such as check-in online, online FAQs, video store tours and online chat. These all help the customer to make an informed choice about their self storage requirements. We have also relaunched "Box Shop", our online store for boxes and packing materials which also now includes a Click and Collect service for customers to conveniently pick up their orders in store.

Online customer reviews

Consistent with our strategy of putting the customer at the heart of our business, our online customerreviews generate real-time feedback from customers aswell asprovidingpositivewordofmouthreferralto ourweb visitors.Through our 'Big Impressions' customer feedback programme, we ask our new customers to rate our product and service and with the users' permission, we then publish these independent reviews on the website.There are currently over 15,000 reviews published.

The Big Impressions programme also generates customerfeedback on their experience when they move out of a Big Yellow store and also from those prospects who decided not to store with us. This programme reinforces best practice of customer service at our stores where customer reviews and mystery shop results are transparently accessible at all levels.

We also gain real-time insight from customers who submit reviews to Trustpilot, the well-known third party customer review site. These reviews are currently averaging 9.5 out of 10. We also regularly monitor Google reviews and mentions of Big Yellow within the social mediums of Twitter, online forums and blogs. We use this insight to continually improve our service offering.

Driving online traffic

Search engines are the most important acquisition tool for us, accounting for the majority of traffic to our website. We continue to invest in search engine optimisation ("SEO") techniques both on and off the site. This helps us to maintain our high positions for the most popular and most searched for terms such as "storage" and "self storage" in the organic listings on Google.

The sponsored search listings remain the largest source of paid for traffic andwe ensure our prominence in these listings is balancedwith effective landing pages to maximise site conversion.

WE HAVE THE LARGEST ONLINE MARKET SHARE OF WEB VISITS TO SELF STORAGE COMPANY WEBSITES IN THE UK.

Efficiencies in online spend are continuing into the year ending 31March 2018, ensuring the return on investmentis maximised from all of our different online traffic sources. Online marketing budgets will continue to remain fluid and be directed towards the media with the best return on investment.

Social media

Socialmedia continues to be complementary to our existingmarketing channels. Our activity is mostfocussed on Twitter, not only monitoring and answering queries regarding self storage, but also posting our own creative tweets,tips and advice.The Big YellowYouTube channel is used to showcase our stores to web prospects through a video store tour. We use both domestic and business versions to help prospects experience the quality ofthe productwithoutthe need forthemto visit the store in person. Our online blog is updated regularly with tips and advice for homeowners and businesses, as well as summaries of our charitable and CSR initiatives.

PR

We have been developing regional PR stories throughout the year to help raise the awareness of Big Yellow and the benefits of self storage across the UK. We have been highlighting newsworthy stories of charitable endeavours from Big Yellow staff or the support we provide to the local charities through offering free storage.

Budget

During the year the Group spent approximately £4.2 million on marketing (4% of total store revenue). We have increased the budget for the year ahead to £4.5 million with a focus on delivering more prospects to our stores from our digital channels.

Cyber security

TheGroup receives specialist advice and consultancy in respect of cyber security andwehave dedicated in-housemonitoring.We regularly review our security systems andwe limitthe retention of customer data to the minimum requirement.

During the year we have continued to invest in digital security. Some of the changes include more frequent penetration testing of internet facing systems, adding components such as anti-ransomware as well as the maintenance replacement of components (such as firewalls) to the latesttechnology and specification. Policies and procedures are underregularreviewand benchmarked againstindustry best practice by our consultants. These policies also include defend, detect and response policies. We have also instigated a new working group to ensure our compliance with the new EU General Data Protection Regulation ("GDPR") which comes into effect on 25 May 2018.

Strategic Report (continued)

Portfolio Summary – Big Yellow Stores

	2017		2016
	Mature(1)	Established	Developing	Total	Mature	Established	Developing	Total
Number of stores	64	6	3	73	62	6	3	71
At 31 March:
Total capacity (sq ft)	3,955,000	406,000	190,000	4,551,000	3,868,000	406,000	190,000	4,464,000
Occupied space (sq ft)	3,111,000	315,000	125,000	3,551,000	2,988,000	290,000	85,000	3,363,000
Percentage occupied	78.7%	77.6%	65.8%	78.0%	77.2%	71.4%	44.7%	75.3%
Net rent per sq ft	£26.32	£24.50	£22.40	£26.03	£26.12	£24.35	£22.54	£25.90
For the year:
REVPAF(2)	£24.23	£21.82	£14.67	£23.62	£23.30	£19.76	£11.57	£22.59
Average occupancy	78.3%	74.4%	56.3%	77.1%	76.4%	68.0%	45.4%	74.7%
Average annual rent psf	£26.43	£24.83	£22.33	£26.16	£25.92	£24.58	£22.07	£25.73

	£000	£000	£000	£000	£000	£000	£000	£000
Self storage income	81,712	7,499	2,389	91,600	76,662	6,786	1,452	84,900
Other storage related income(3)	13,543	1,259	387	15,189	13,197	1,154	217	14,568
Ancillary store rental income	412	102	12	526	261	84	9	354
Total store revenue	95,667	8,860	2,788	107,315	90,120	8,024	1,678	99,822
Direct store operating
costs (excluding depreciation)	(27,929)	(2,510)	(1,278)	(31,717)	(26,592)	(2,508)	(986)	(30,086)
(4) Short and long leasehold rent	(2,126)	–	–	(2,126)	(1,893)	–	–	(1,893)
Store EBITDA(5)	65,612	6,350	1,510	73,472	61,635	5,516	692	67,843
Store EBITDA margin	68.6%	71.7%	54.2%	68.5%	68.4%	68.7%	41.2%	68.0%

Deemed cost	£m	£m	£m	£m
To 31 March 2017	477.2	80.9	34.2	592.3
Capex to complete	–	–	0.2	0.2
Total	477.2	80.9	34.4	592.5

(1) The mature stores have been open for more than six years at 1 April 2016. The established stores have been open for between three and six years at 1 April 2016 and the developing stores have been open for fewer three years at 1 April 2016. The Group acquired two stores during the year in Nine Elms and Twickenham. These are shown within mature stores as they have been open for more than six years. Like-for-like measures presented within this statement exclude these two stores.

(2) Total store revenue divided by the average maximum lettable area in the year.

(3) Packing materials, insurance and other storage related fees.

(4) Rent for seven mature short leasehold properties accounted for as investment properties and finance leases under IFRS with total self storage capacity of 420,000 sq ft, and a long leasehold lease-up store with a capacity of 64,000 sq ft. The EBITDA margin for the 57 freehold mature stores is 70.5%, and 49.8% for the seven leasehold mature stores.

(5) Store earnings before interest, tax, depreciation and amortisation. See the financial review for a reconciliation of Store EBITDA to gross profit.

Our Portfolio

Unrivalled in the UK

Twickenham 2, April 2016 MLA – 22,000 sq ft		Nine Elms, April 2016 MLA – 65,000 sq ft		MLA – 60,000 sq ft	Cambridge, January 2016

Enfield, April 2015 MLA – 60,000 sq ft		Chester, February 2015 MLA – 69,000 sq ft		Oxford 2, July 2014 MLA – 35,000 sq ft
Gypsy Corner, April 2014 MLA – 70,000 sq ft		Chiswick, April 2012 MLA – 75,000 sq ft		MLA – 62,000 sq ft	New Cross, February 2012

Stockport, September 2011 MLA – 65,000 sq ft	Eltham, April 2011 MLA – 70,000 sq ft		Camberley, January 2011 MLA – 68,000 sq ft		High Wycombe, June 2010 MLA – 60,000 sq ft

Reading, December 2009	Sheffield Bramall Lane,	Poole, August 2009	Nottingham, August 2009
MLA – 62,000 sq ft	September 2009 MLA – 60,000 sq ft	MLA – 55,000 sq ft	MLA – 67,000 sq ft







Edinburgh, July 2009 MLA – 63,000 sq ft	Twickenham, May 2009 MLA – 73,000 sq ft	Liverpool, March 2009 MLA – 60,000 sq ft	Bromley, March 2009 MLA – 71,000 sq ft







Birmingham, February 2009	Sheen, December 2008	Sheffield Hillsborough,	Kennington, May 2008
MLA – 60,000 sq ft	MLA – 64,000 sq ft	October 2008 MLA – 60,000 sq ft	MLA – 66,000 sq ft







Merton, March 2008 MLA – 70,000 sq ft	Fulham, March 2008 MLA – 139,000 sq ft	Balham, March 2008 MLA – 60,000 sq ft	Barking, November 2007 MLA – 64,000 sq ft







Ealing Southall, November 2007	Sutton, July 2007	Gloucester, December 2006	Edmonton, October 2006
MLA – 57,000 sq ft	MLA – 70,000 sq ft	MLA – 50,000 sq ft	MLA – 75,000 sq ft

Kingston, August 2006	Bristol Ashton Gate, July 2006	Finchley East, May 2006	Tunbridge Wells, April 2006
MLA – 62,000 sq ft	MLA – 61,000 sq ft	MLA – 54,000 sq ft	MLA – 57,000 sq ft
Bristol Central, March 2006	North Kensington,	Leeds, July 2005	Beckenham, May 2005
MLA – 64,000 sq ft	December 2005 MLA – 51,000 sq ft	MLA – 76,000 sq ft	MLA – 71,000 sq ft
Tolworth, November 2004	Watford, August 2004	Swindon, April 2004	Orpington, December 2003
MLA – 56,000 sq ft	MLA – 64,000 sq ft	MLA – 53,000 sq ft	MLA – 64,000 sq ft
Byfleet, November 2003	Chelmsford, April 2003	Finchley North, March 2003	West Norwood, January 2003
MLA – 48,000 sq ft	MLA – 54,000 sq ft	MLA – 62,000 sq ft	MLA – 57,000 sq ft
Colchester, December 2002	Bow, November 2002	Brighton, October 2002	Guildford, June 2002
MLA – 54,000 sq ft	MLA – 132,000 sq ft	MLA – 59,000 sq ft	MLA – 55,000 sq ft

New Malden, May 2002 MLA – 81,000 sq ft	Hounslow, December 2001 MLA – 54,000 sq ft	Battersea, December 2001 MLA – 34,000 sq ft	Ilford, November 2001 MLA – 58,000 sq ft

Cardiff, October 2001 MLA – 74,000 sq ft	Portsmouth, October 2001 MLA – 61,000 sq ft	Norwich, September 2001 MLA – 47,000 sq ft	Dagenham, July 2001 MLA – 51,000 sq ft

Wandsworth, April 2001 MLA – 47,000 sq ft	Luton, March 2001 MLA – 41,000 sq ft	Southend, March 2001 MLA – 57,000 sq ft	Staples Corner, March 2001 MLA – 112,000 sq ft

Romford, November 2000 MLA – 70,000 sq ft	Milton Keynes, September 2000 MLA – 61,000 sq ft	Cheltenham, April 2000 MLA – 50,000 sq ft	Slough, February 2000 MLA – 67,000 sq ft

Hanger Lane, October 1999 MLA – 66,000 sq ft	Oxford, August 1999 MLA – 33,000 sq ft	Croydon, July 1999 MLA – 80,000 sq ft	Richmond, May 1999 MLA – 35,000 sq ft

Portfolio Summary – Armadillo Stores

	2017	2016
Number of stores(1)	16	14
At 31 March:
Total capacity (sq ft)	738,000	673,000
Occupied space (sq ft)	551,000	477,000
Percentage occupied	74.7%	70.9%
Net rent per sq ft	£16.51	£15.59
For the year:
REVPAF	£14.31	£13.33
Average occupancy	73.3%	70.7%
Average annual rent psf	£16.36	£15.64
	£000	£000
Self storage income	8,781	7,428
Other storage related income	1,659	1,531
Ancillary store rental income	43	9
Total store revenue	10,483	8,968
Direct store operating costs (excluding depreciation)	(4,222)	(3,681)
Leasehold rent	(411)	(411)
Store EBITDA(2)	5,850	4,876
Store EBITDA margin	55.8%	54.4%

Cumulative capital expenditure	£m
To 31 March 2017	51.0
To complete	0.5
Total capital expenditure	51.5

(1) Armadillo acquired two stores in April 2016 in Canterbury and West Molesey.

(2) Store earnings before interest, tax, depreciation, amortisation, and management fees charged by Big Yellow to the Armadillo portfolios (see note 26).

Strategic Report (continued)

Store Performance

The table below shows the quarterly move-in and move-out activity over the year:

Store move-ins	Total move-ins Year ended 31 March 2017	Total move-ins Year ended 31 March 2016	%	Total move-outs Year ended 31 March 2017	Total move-outs Year ended 31 March 2016	%
April to June	19,509	20,112	(3)	15,625	15,595	0
July to September	20,702	21,763	(5)	22,239	22,898	(3)
October to December	15,409	16,643	(7)	17,679	18,600	(5)
January to March	16,095	16,920	(5)	14,468	15,450	(6)
Total	71,715	75,438	(5)	70,011	72,543	(3)

In the quarter to June, leading up to the referendum, we saw a modest year on year reduction in move-in activity of 3%. However, in the six months following the referendum, year on year move-ins were down on average 6% across the businesswith a fall in London of 8% and a fall of 5% in the regions. Since November, we also saw a further reduction in year on year move outs, with less churn in the business, resulting in a loss in occupancy for the December quarter in line with the previous year. Like-for-like revenue growth for the third quarter was 5%, a slower rate of growth than in the first half of the year, impacted by the loss of occupancy in the quarter beingmore front-ended coupled with slower average rate growth. In the fourth quarter,move-in activity began to stabilise and for March and April move-ins were up on the comparative months last year.

In all Big Yellow stores, the occupancy growth in the current year was 188,000 sq ft, against an increase of 185,000 sq ft in the prior year. The current year figure includes 76,000 sq ft of occupancy acquired with Nine Elms and Twickenham 2; the net occupancy growth in the year was therefore 112,000 sq ft.

Quarterly net occupancy	Net sq ft Year ended 31 March 2017	Net sq ft Year ended 31 March 2016	Net move-ins Year ended 31 March 2017	Net move-ins Year ended 31 March 2016
April to June	110,000	146,000	3,884	4,460
July to September	24,000	54,000	(1,537)	(1,183)
October to December	(137,000)	(138,000)	(2,350)	(1,998)
January to March	115,000	123,000	1,547	1,420
Total	112,000	185,000	1,544	2,699

We had a solid quarterto Junewith an increase in occupancy of110,000 sq ft, slightly down on the prior year, partially because of some activity being front-ended intoMarch2016as a result ofthe stamp duty changes, coupled with uncertainty in the run-up to the referendum. The second quarter peaked in August and thenmany of our students and shortterm house movers vacate in September and October, leading to a net loss in occupied rooms and sq ft occupancy. In the final quarter we have seen a return to growth in net occupied rooms and increased occupancy in the stores by 115,000 sq ft.

The 64 mature stores are 78.7% occupied compared to 77.2% at the same time last year.The 6 established stores have grown in occupancy from 71.4% to 77.6%. The three developing stores added 40,000 sq ft of occupancy in the year to reach closing occupancy of 65.8%. Overall store occupancy has increased in the year from 75.3% to 78.0%. On a like-for-like basis, closing occupancy was 78.1%, an increase of 2.8 percentage points.

All of the stores open at the year end are trading profitably at the EBITDA level. The table below shows the average key metrics across the store portfolio for the year ended 31 March 2017:

Since the year end occupancy has grown by 54,000 sq ft to date (2016: quarter to date gain of 7,000 sq ft). As of 22 May 2017, our occupancy across the portfolio is 79.2%.

	Mature stores	Established stores	Developing stores	All stores
Store capacity	61,800	67,700	63,300	62,300
Sq ft occupied per store at 31 March 2017	48,600	52,500	41,700	48,650
% occupancy	78.7%	77.6%	65.8%	78.0%
Revenue per store (£000)	1,495	1,477	929	1,470
EBITDA per store (£000)	1,025	1,058	503	1,006
EBITDA margin	68.6%	71.7%	54.2%	68.5%

Pricing and rental yield

We have continued our sales promotion offer throughout the year of "50% off for up to your first 8 weeks storage". We also use our Price Match ifthe competitors' productis comparable. Pricing is dynamically generated and takes into accountroomavailability and local competition.

In the year ended 31March 2017,the average growth in the net achieved rent per sq ft was 1.7% compared to 2.5% in the prior year. We remain focussed on achieving our next occupancy target of 85% across the portfolio, and to that end we took the decision to be more aggressive in our promotions over the winter months, resulting in a slight reduction in average rate overthe secondhalf oftheyear.This isnowembeddedinthe business,with rate having stabilised, and as occupancy grows fromthis levelwewould expectto see a return to like-for-like rate growth.

For stores at a higher level of occupancy, our pricing model reduces promotions and increases asking prices where individual units are in scarce supply.This lowering of promotions, coupledwith price increases toexistingandnewcustomers, leads toanincreaseinachievednetrents. Rental growth can also be driven through sub-dividing larger rooms into smallerrooms,which yield a higher netrent per sq ft.

The table below shows the growth in net rent per sq ft for the portfolio over the period (the table below excludes Cambridge which opened in January 2016 and Nine Elms and Twickenham 2, which were acquired in April 2016).

Average occupancy in the year	Number of stores	Net rent per sq ft growth over the year
0 to 75%	22	(1.0%)
75 to 80%	20	1.7%
80 to 85%	20	2.0%
Above 85%	8	2.1%

Lock and Leave acquisition

In April 2016, we acquired the Lock and Leave portfolio. Big Yellow acquired two stores in London, at Nine Elms (65,000 sq ft MLA freehold) and Twickenham (22,000 sq ft MLA, 19 years unexpired leasehold), for £13.5 million and £1.1 million respectively, totalling £14.6 million. The Nine Elms store sits neatly between our strong performing Kennington and Battersea stores, and our aim will be to drive revenue and cash flow through yield management. The Twickenham store is adjacent to our existing highly occupied freehold 73,000 sq ft store.The freehold stores in Canterbury (30,000 sq ftMLA) and West Molesey (35,000 sq ft MLA) were acquired by Armadillo for £6.4 million, and againwe expectto drive operational performance from these stores under our management.

Armadillo Self Storage

The Group has a 20% investment in Armadillo Self Storage, with the balance of 80% held by an Australian consortium. During the year, Armadillo acquired two stores from Lock and Leave, in Canterbury and West Molesey, with a combined capacity of 65,000 sq ft.

In April 2017 we acquired a further three stores into the Armadillo platform in Exeter, Plymouth and Torquay, for £4.75 million.This takes the Armadillo platform to 19 stores and 830,000 sq ft of MLA. As with the other existing store acquisitions, the intention will be to upgrade and reconfigure the stores through additional investmentto drive cash flow growth. In the year to 31 March 2017, £1.3 million of capital expenditure has been invested in the Armadillo stores.

Armadillo is a lower-frills brand, with largely freehold conversions of existingbuildings.Theyarelocatedintownswherewewouldnottypically locate a Big Yellow, and have an average capacity of 44,000 sq ft(lower than the 62,000 sq ft average for Big Yellowstores). Armadillo provides a number of operational advantages to the Group, such as a wider platform to sell to national accounts, more opportunities for staff promotion, and more efficient use of the Company's marketing and central overhead costs.The Group continues to look for opportunities to add to the Armadillo platform.

Development pipeline

We have commenced construction on our Guildford Central store,which we anticipate opening inMarch2018and onthe extensionto our existing store in Wandsworth, which we anticipate completing in April 2018. We own a further six development sites for which planning is to be negotiated, including an existing storewhere planning is being sought to extend and redevelop. The status of the Group's development pipeline is summarised in the table overleaf.

Strategic Report (continued)

Store Performance (continued)

Site	Location	Status	Anticipated capacity
Guildford	Prime location in centre of Guildford on Woodbridge Meadows	Construction commenced, store due to open in March 2018, cost to complete of £4.4 million.	56,000 sq ft
Wandsworth, London	Extension to existing 47,000 sq ft store	Construction commenced, extension due to open in April 2018, cost to complete of £4.2 million.	Additional 25,000 sq ft
Manchester	Prime location on Water Street in central Manchester	Planning application to be submitted in June 2017.	60,000 to 65,000 sq ft
Camberwell, London	Located in prominent location on Southampton Way	Planning application refused. Appeal submitted with a decision due by December 2017.	55,000 to 60,000 sq ft
Kings Cross, London	Prominent location on York Way	Planning application currently being prepared to be submitted this year.	100,000 to 110,000 sq ft
Battersea, London	Prominent location on junction of Lombard Road and York Road (South Circular)	Potential redevelopment to increase size of existing 34,000 sq ft Big Yellow store. Redevelopment of adjoining retail into a mixed use led residential scheme. Ongoing detailed planning discussions with the Borough Council.	Up to an additional 40,000 sq ft
Newcastle	Prime location on Scotswood Road	Negotiations ongoing with existing long leasehold tenant to obtain vacant possession.	50,000 to 60,000 sq ft
Wapping, London	Prominent location on The Highway	Site recently acquired.Wewill convert partinto self storage and collectincome fromthe othertenancieswith a viewto achieving amore comprehensive self storage centre in the longerterm.	50,000 sq ft to 90,000 sq ft

The capital expenditure committed for the financial year ended 31 March 2018 is approximately £20 million, which includes the acquisition of Wapping, the construction of Guildford Central and the extension to Wandsworth.

The Group manages the construction and fit-out of its stores in-house, as we believe it provides both better control and quality, and we have an excellent record of building stores on time and within budget.

LIKE-FOR-LIKE REVENUE FOR THE YEAR WAS £107.3 MILLION, AN INCREASE OF 6% FROM THE PRIOR YEAR.

Delivering Results

Financial results

Revenue

Total revenue for the year was £109.1 million, an increase of £7.7 million (8%)from £101.4 million in the prior year. Like-for-like revenue for the year was £107.3 million, an increase of 6% from the prior year (2016: £101.4 million). Like-for-like revenue excludes Nine Elms and Twickenham 2 which were acquired in April 2016.

Other sales (included within the above), comprising the selling of packingmaterials, insurance and storage related charges,represented 16.6% of storage income for the year (2016: 17.2%) and generated revenue of £15.2million forthe year, up 4% from£14.6million in 2016. The other revenue earned by the Group is management fee income, largely from the Armadillo Partnerships, and tenant income on sites where we have not started development.

Operating costs

Cost of sales is principally comprised of the direct store operating costs, including store staff salaries, utilities, business rates, insurance, a full allocation ofthe centralmarketing budget and repairs andmaintenance.

The breakdown ofthe portfolio's operating costs compared to the prior year is shown in the table below

Category	Year ended 31 March 2017 £000	Year ended 31 March 2016 £000	% increase	% of store operating costs in 2017
Cost of sales (insurance and packing materials)	2,391	2,149	11%	7%
Staff costs	8,572	8,001	7%	27%
General & Admin	1,196	1,183	1%	4%
Utilities	1,470	1,406	5%	5%
Property Rates	10,044	9,544	5%	32%
Marketing	4,152	3,865	7%	13%
Repairs / Maintenance	2,539	2,240	13%	8%
Insurance	893	992	(10%)	3%
Computer Costs	443	440	1%	1%
Irrecoverable VAT	17	266	(94%)	0%
Total per portfolio summary	31,717	30,086	5%

Operatingcostspertheportfoliosummaryhaveincreasedby£1.6million. £0.9 million of this increase is due to new stores acquired in the year at Nine Elms and Twickenham 2, coupled with the full year impact of Cambridge.The remaining increase of £0.7 million (representing a 2.4% increase on the prior year on a like-for-like basis) is due to an increased investmentinmarketing and increases in property rates and repairs and maintenance, in part offset by the saving in VAT(see below).

During the year, the Group agreed a new Partial Exemption Special MethodwithHMRC.Thismethod increases theGroup's VATrecoverability from 89.0% to 99.4%.This saves approximately £0.3 million per annum on the Group's operating costs, in addition to reducing the irrecoverable VAT on construction projects.There is a creditin respect of prior years of £0.3 million from the date the application was submitted, which is an item in the adjustments to the Group's recurring profit for the year.This credit is split between cost of sales (£278,000) and administrative expenses (£50,000).

Following the recent rating review, we have calculated that the impact on the Group's rates bill forthe year ending 31March 2018 will increase by 9% (£0.9 million). We expect rates to increase beyond next year in linewith inflation.The improvementin our VAT positionmentioned above will serve to mitigate part of this increased cost.

Strategic Report (continued)

Financial Review (continued)

The table below reconciles store operating costs per the portfolio summary to cost of sales in the income statement:

	Year ended 31 March 2017 £000	Year ended 31 March 2016 £000
Direct store operating costs per portfolio summary (excluding rent)	31,717	30,086
Rent included in cost of sales (total rent payable is included in portfolio summary)	1,196	967
Depreciation charged to cost of sales	489	478
Prior period VAT recovery	(278)	–
Head office operational management costs charged to cost of sales	798	672
Other (e.g. void costs of development sites)	153	429
Cost of sales per income statement	34,075	32,632

Store EBITDA

Store EBITDA for the year included in the income statement was £73.5 million, an increase of £5.6 million (8%) from £67.8 million for the year ended 31 March 2016 (see Portfolio Summary).The overall EBITDA margin for all Big Yellow stores during the year was 68.5% an improvement from 68.0% last year.The table below reconciles Store EBITDA per the portfolio summary to gross profit in the income statement.

	Year ended 31 March 2017 £000			Year ended 31 March 2016 £000
	Store EBITDA per portfolio summary	Reconciling items	Gross profit per income statement	Store EBITDA per portfolio summary	Reconciling items	Gross profit per income statement
Revenue(1)	107,315	1,755	109,070	99,822	1,560	101,382
Cost of sales(2)	(31,717)	(2,358)	(34,075)	(30,086)	(2,546)	(32,632)
(3) Rent	(2,126)	2,126	–	(1,893)	1,893	–
	73,472	1,523	74,995	67,843	907	68,750

(1) See note 3, reconciling items include management fees and non-storage income.

(2) See reconciliation in cost of sales section above.

(3) The rent shown above is the cost associated with leasehold stores, only part of which is recognised within gross profit in line with finance lease accounting principles. The amount included in gross profit is shown in the reconciling items in cost of sales.

Administrative expenses

Administrative expenses in the income statement have increased by £0.8 million compared to the prior year. £0.3 million of the increase is as a result of the write-off of the Group's acquisition costs for the purchase of Lock and Leave, which has been adjusted from recurring profit. The remaining difference is due principally to an increased investment in ITinfrastructure and inflationary increases. In addition, it is important to note that of our total £9.7 million administrative expense forthe year, £2.3 million relates to the non-cash share based payments charge.

Interest expense on bank borrowings

The gross bank interest expense for the year was £11.0 million, a reduction of £0.2million fromthe prior year.This reflects slightly higher average debt levels offset by a reduction in the Group's average cost of debt.The average cost of borrowing during the yearwas 3.3% compared to 3.6% in the prior year.

Capitalised interest decreased by £0.1 million from the prior year. The interest capitalised in the yearis principally on our Guildford Central store andtheWandsworthextension,butinterestwasonlycapitalisedonthese developments in the final quarter. During the prior year, interest was capitalised on our Cambridge developmentforthemajority ofthe year.

Total interest payable has decreased in the statement of comprehensive income from £11.9 million to £11.8 million due to the reduction in interest payable, partly offset by the reduction in capitalised interest.

Profit before tax

The Group made a profit before tax in the year of £99.8 million, compared to a profit of £112.2 million in the prior year.

After adjusting forthe gain on the revaluation of investment properties and other matters shown in the table below, the Group made an adjusted profit before tax in the year of £54.6 million, up 11% from £49.0 million in 2016.

Profit before tax analysis	2017 £m	2016 £m
Profit before tax	99.8	112.2
Gain on revaluation of
investment properties	(43.7)	(58.0)
Movement in fair value on interest
rate derivatives	(0.7)	–
Acquisition costs written off	0.3	–
Prior year VAT recovery	(0.3)	–
Gains on surplus land	–	(4.8)
Share of non-recurring gains and
losses in associates	(0.8)	(0.4)
Adjusted profit before tax	54.6	49.0

The movement in the adjusted profit before tax from the prior year is illustrated in the table below:

	£m
Adjusted profit before tax –
year ended 31 March 2016	49.0
Increase in gross profit	5.9
Decrease in net interest payable	0.2
Increase in administrative expenses	(0.5)
Increase in share of recurring profit of associates	0.1
Decrease in capitalised interest	(0.1)
Adjusted profit before tax –
year ended 31 March 2017	54.6

Basic earnings per share for the year was 63.6p (2016: 71.9p) and fully diluted earnings per sharewas 63.1p (2016: 71.6p). Diluted EPRA earnings per share based on adjusted profit after tax was up 11% to 34.5p (2016: 31.1p) (see note 12).

REIT status

The Group converted to a Real Estate Investment Trust ("REIT") in January 2007. Since then the Group has benefited from a zero tax rate on the Group's qualifying self storage earnings. The Group only pays tax on the profits attributable to our residual business, comprising primarily of the sale of packing materials and insurance, and fees earned from the management of the Armadillo portfolio.

REIT status gives the Group exemption from UK corporation tax on profits and gains from its qualifying portfolio of UK stores. Revaluation gains on developments and our existing open stores will be exempt from corporation tax on capital gains, provided certain criteria are met.

TheGrouphasarigorousinternalsysteminplaceformonitoringcompliance with criteria set outintheREITregulations.Onamonthly basis, a report on compliancewiththesecriteriais issuedtotheExecutive.Todate,theGroup has compliedwith allREITregulations, including forward looking tests.

Taxation

There is a tax charge in the current year of £0.3 million.This compares to a charge in the prior year of £0.2million.The current yeartax charge reflects an increase in profits in our residual business, in part offset by deductions allowed for tax purposes from the exercise of share options.

Dividends

The Board is recommending the payment of a final dividend of 14.1 pence per share in addition to the interim dividend of 13.5 pence, giving a total dividend for the year of 27.6 pence, an increase of 11% from the prior year.

REITregulatory requirements determine the level of Property Income Dividend ("PID") payable by the Group. On the basis of the full year distributable reserves for PID purposes, a PID of 24.0 pence per share is payable (31March 2016: 18.1 pence).The balance ofthe total annual dividend represents an ordinary dividend declared atthe discretion of the Board, in line with our policy to distribute 80% of our adjusted earnings per share in each reporting period. The PID for the year to 31 March 2017 accounts for 87% of the total dividend, up from 73% in the prior year.

The table below summarises the declared dividend for the year:

Dividend (pence per share)	31 March 2017	31 March 2016
Interim dividend – PID	13.5p	12.1p
– discretionary	nil p	nil p
– total	13.5p	12.1p
Interim dividend – PID	10.5p	6.0p
– discretionary	3.6p	6.8p
– total	14.1p	12.8p
Interim dividend – PID	24.0p	18.1p
– discretionary	3.6p	6.8p
– total	27.6p	24.9p

Subject to approval by shareholders at the Annual General Meeting to be held on 20 July 2017,the final dividend will be paid on 27 July 2017. The ex-div date is 22 June 2017 and the record date is 23 June 2017.

Financial Review (continued)

Cash flow growth

The Group is strongly cash generative and draws down from its longer term committed facilities as required to meet obligations.The Group's cash flow from operating activities for the year was £56.0 million, an increase of 1% from £55.5 million in the prior year.There are distortive working capital items in both years, and therefore the summary cash flowbelowsets outthe free cash flowpreworking capital movements, which shows an increase of 10% to £58.3 million in the year.

	Year ended 31 March 2017 £000	Year ended 31 March 2016 £000
Cash generated from operations pre working capital movements Net finance costs	69,574 (11,235)	64,023 (10,748)
Free cash flow pre working capital movements Working capital movements	58,339 (2,365)	53,275 2,192
Cash flow from operating activities Capital expenditure Finance lease payments Asset sales Receipt from Capital Goods Scheme Dividends received from associates	55,974 (20,577) (1,196) 300 2,917 396	55,467 (44,575) (967) 7,835 184 270
Cash flow after investing activities Ordinary dividends Issue of share capital (Decrease)/increase in borrowings	37,814 (41,158) 286 (7,243)	18,214 (36,443) 378 26,864
Net cash (outflow)/inflow Opening cash and cash equivalents	(10,301) 17,207	9,013 8,194
Closing cash and cash equivalents Closing debt	6,906 (304,955)	17,207 (312,198)
Closing net debt	(298,049)	(294,991)

Net debt is defined as gross bank borrowings less cash and cash equivalents.

In the year capital expenditure outflowswere £20.6million, down from £44.6 million in the prior year.The capital expenditure during the year principally relates to the acquisition of Nine Elms and Twickenham 2 from Lock and Leave. We have commenced construction in our Guildford Central store and the extension to our existing Wandsworth store and also continued to invest in fitting out further Phase 2 space at our existing stores.

The cash flowafterinvesting activitieswas a netinflowof £37.8million in the year, compared to an inflow of £18.2 million in 2016.

Balance sheet

Property

The Group's 73 stores and 5 stores under development at 31 March 2017,which are classified as investment properties, have been valued individually by Cushman&Wakefield ("C&W") and this has resulted in an investment property asset value of £1,190.5 million, comprising £1,110.9 million (93%) for the 66 freehold (including two long leaseholds) open stores, £43.5 million (4%) for the seven short leasehold open stores and £36.1 million (3%) for the five freehold investment properties under construction.

Analysis of property portfolio	Value at 31 March 2017	Revaluation movement in year
Investment property Investment property	£1,154.4m	£44.4m
under construction	£36.1m	(£0.7m)
Total	£1,190.5m	£43.7m

Investment property

The valuations in the current year have grown from the prior year,with a revaluation surplus of £44.4 million arising on the open Big Yellow stores. Of this increase £19.5 million is due to an improvement in the cap rate used in the valuations. £24.9 million of the increase in value is due to the growth in cash flow from the assets and the operating assumptions adopted in the valuations. The growth in cash flow has been partly offset by the increase in property rates mentioned above.

The valuation is based on an average occupancy overthe 10 year cash flow period of 82.1% across the whole portfolio.

The valuation is based on an average occupancy over the 10 year cash flow period of 82.1% across the whole portfolio.The table below provides further analysis of the valuations:

	Mature Leasehold	Mature Freehold	Established Freehold	Developing Freehold	Total
Number of stores	7	57	6	3	73
MLA capacity (sq ft)	420,000	3,535,000	406,000	190,000	4,551,000
Valuation at 31 March 2017	£43.5m	£957.6m	£108.1m	£45.2m	£1,154.4m
Value per sq ft	£104	£271	£266	£238	£254
Occupancy at 31 March 2017	81.6%	78.3%	77.6%	65.8%	78.0%
Stabilised occupancy assumed	84.4%	82.2%	85.6%	85.0%	82.8%
Net initial yield pre-admin expenses	12.2%	6.3%	6.1%	4.8%	6.5%
Stabilised yield assuming no rental growth	12.9%	7.0%	7.0%	7.4%	7.2%

The initial yield pre-administration expenses assuming no rental growth 6.5% (2016: 6.5%) rising to a stabilised yield of 7.2% (2016: 7.2%). The stores are assumed to grow to stabilised occupancy in 22 months on average.Note14containsmore detail on the assumptions underpinning the valuations.

There is little transaction activity in the prime self storage market, although there has been some activity for secondary assets. As referenced in note 14, C&W's valuation report further confirms that the properties have been valued individually but that if the portfolio was tobesoldas a singlelotorinselectedgroupsofproperties,thetotal value could differ significantly. C&W state that in current market conditions they are ofthe viewthatthere could be amaterial portfolio premium.

Investment property under construction

The investment property under construction valuation has increased by £2.1million in the year. Capital expenditure accounts for £2.8million ofthis increase, notably on Guildford Central.This has been partly offset by a revaluation deficit of £0.7 million across a couple of the development sites, where our projected construction costs have increased due to a change in the planned schemes.

Purchaser's cost adjustment

As in prior years, we have instructed an alternative valuation on our assets using a purchaser's cost assumption of 2.75% (see note 14 for further details)to be used in the calculation of our adjusted diluted net asset value.This Red Book valuation on the basis of 2.75% purchaser's costs, results in a higher property valuation at 31 March 2017 of £1,258.5 million (£68.0 million higher than the value recorded in the financial statements).With the share of uplift on the revaluation ofthe Armadillo stores (£0.5million),this translates to 43.2 pence per share.

The revised valuation translates into an adjusted net asset value per share of 607.6 pence (2016: 569.1 pence) after the dilutive effect of outstanding share options.

Surplus land

During the year, the Group sold its remaining piece of land for £0.3 million, which represented its book value. In the prior year, the Group sold its surplus site in Central Manchester for £8 million. This represented a profit over book value, after selling costs, of £4.8million, which included the release of a provision previously made against the land of £2.3 million.

Receivables

At 31 March 2017 we have a receivable of £6.8 million in respect of payments due back to the Group under the Capital Goods Scheme as a consequenceoftheintroductionofVATonselfstoragefrom1October2012.

The debtor has been discounted in accordance with International Accounting Standards to the net present value using the Group's average cost of debt, with £0.3 million of the discount being unwound through interestreceivable in the period.The gross value ofthe debtor before discounting is £7.2 million.

The Group received £2.9 million under the Scheme in the year.

Movement in adjusted NAV

The year on year movement in adjusted net asset value (see note 12) is illustrated in the table below:

Movement in adjusted NAV	Equity shareholders funds £m	EPRA adjusted NAV per share (pence)
1 April 2016	899.0	569.1
Adjusted profit	54.6	34.6
Equity dividends paid	(41.1)	(26.1)
Revaluation movements
(including share of associate)	44.5	28.2
Movement in purchaser's cost adjustment	4.0	2.5
Other movements (e.g. share schemes)	2.4	(0.7)
31 March 2017	963.4	607.6

Financial Review (continued)

Borrowings

We focus onimproving our cashflows allied to a relativelyconservative debt structure secured principallyagainstthe freehold estate. Fortheyearwe had healthy Group interest cover of 6.2 times (2016: 6.0 times) based on free cash flowpreworking capitalmovements againstinterest paid.

Our financing policy is to fund our current needs through a mix of debt, equity and cash flowto allowus to selectively build out our development pipeline and achieve our strategic growth objectives, which we believe improves returns for shareholders. We aim to ensure that there are sufficient medium-term facilities in place to finance our committed development programme, secured against the freehold portfolio, with debt serviced by our strong operational cash flows.Treasury continues to be closely monitored and its policy approved by the Board. We maintain a keen watch on medium and long-term rates and the Group's policy in respect of interest rates is to maintain a balance between flexibility and hedging of interest rate risk.The table below summarises the Group's debt facilities at 31 March 2017.

Debt	Expiry	Facility	Drawn	Average cost
Aviva Loan	April 2027	£90 million	£90 million	4.9%
M&G loan	June 2022	£70 million	£70 million	3.7%
Bank loan (Lloyds & HSBC)	October 2021	£190 million	£145 million	1.8%
Total	Average term 5.9 years	£350 million	£305 million	3.2%

TheGroup's loanwith Aviva is at a fixed rate and amortises to£60million fromthe original loan of£100million overthe course ofits15yearterm. The M&G loan is 50% fixed and 50% floating and is for a bullet seven year term.

During the year the Group extended the term of its bank loan from October 2020 to October 2021.The revolving element of the bank loan pays a margin of 125 bps and the term debt 150 bps.The Group has an option to increase the amount ofthe revolving loan facility by a further £60 million during the course of the loan's term.

Duringtheyear,theGrouptookoutaninterestratederivativeof£30million expiringinOctober2021atapre-margincostof0.4%,replacinganexpiring swapwhichwas at a pre-margin cost of 2.8%.The bank loan requires 45% of all drawn debtto be hedged orfixed.

TheGroupwas incompliancewithitsbanking covenants at31March2017. The Group currently has a net debt to gross property assets ratio of 25%, and a net debtto adjusted net assets ratio of31%.

At 31March 2017,the fair value on the Group's interestrate derivatives was a liability of £3.0 million. The Group does not hedge account its interest rate derivatives. As recommended by EPRA (European Public Real Estate Association),the fair valuemovements are eliminated from adjusted profit before tax, diluted EPRA earnings per share, and adjusted net assets per share.

Cash deposits are only placed with approved financial institutions in accordance with the Group's Treasury policy.

Share capital

The share capital of the Company totalled £15.8 million at 31 March 2017 (2016: £15.7million), consisting of 157,882,867 ordinary shares of 10p each (2016: 157,369,287 shares).

Shares issued for the exercise of options during the year amounted to 0.5 million at an average exercise price of 738p (2016: 0.7 million shares at an average price of 704p).

The Group holds 1.1 million shares within an Employee Benefit Trust ("EBT"). These shares are shown as a debit in reserves and are not included in calculating net asset value per share.

	2017 No.	2016 No.
Opening shares	157,369,287 158,055,735
Cancellation of treasury shares	–	(1,418,750)
Shares issued for the exercise
of options	513,580	732,302
Closing shares in issue	157,882,867 157,369,287
Shares held in EBT	(1,122,907)	(1,122,907)
Closing shares for NAV purposes	156,759,960 156,246,380

74.9 million shares were traded in the market during the year ended 31 March 2017 (2016: 56.9 million).The average mid-market price of shares traded during the year was 735.8p with a high of 886.5p and a low of 635.0p.

Investment in Armadillo

The Group has a 20% investmentin Armadillo Storage Holding Company Limited and a 20% investment in Armadillo Storage Holding Company 2 Limited. In the consolidated accounts of Big Yellow Group PLC, our investments in the vehicles are treated as associates using the equity accounting method.

The occupancy of the Armadillo stores at 31March 2017 was 551,000 sq ft, against a total capacity of 738,000 sq ft, with growth of 74,000 sq ft over the year, including 50,000 sq ft acquired with Canterbury and West Molesey in April 2016. The stores' occupancy at 31 March 2017 was 74.7% (31 March 2016: 70.9%). The net rent achieved at 31March 2017 by the Armadillo stores is £16.51 per sq ft, an increase of 6% from the same time last year. The 6% increase is in part due to the acquisition of Canterbury and West Molesey which increased the average net rent of the portfolio. Revenue increased by 17% to £10.5 million for the year to 31 March 2017 (2016: £9.0 million); the like-for-like increase in revenue was 4%.

The Armadillo Partnerships made a combined operating profit of £5.2million in the year, ofwhich Big Yellow's share is £1.0million. After net interest costs, the revaluation of investment properties (valued by Jones Lang Lasalle), deferred tax on the revaluation surplus and interest rate derivatives, the profit for the year was £7.2 million, of which the Group's share was £1.4 million.

Big Yellowhas a five year management contractin place in each Partnership. Forthe yearto 31March 2017,the Group earned managementfees of £0.8 million. The Group's share of the declared dividend for the year is £0.4 million, representing an 11% yield on our investment for the year.

Principal risks and uncertainties

The Directors have carried out a robust assessment ofthe principalrisks facing the Company, including those thatwould threaten its business model, future performance, solvency orliquidity.

The section belowdetails the principalrisks and uncertainties that are considered to have themostmaterial impact on the Group's strategy and objectives.These key risks aremonitored on an ongoing basis by the Executive Directors, and considered fully by the Board in its annualrisk review.

Risk and impact	Mitigation	Change during the year and outlook
Self storage market risk There is a risk to the business thatthe self storagemarket does not growin linewith our projections, and that economic growth in the UK is belowexpectations, which could resultin falling demand and a loss ofincome.	SelfstorageisarelativelyimmaturemarketintheUKcomparedtootherselfstoragemarkets suchastheUnitedStatesandAustralia,andwebelievehasfurtheropportunityforgrowth. The sector have slowed significantly overthe pastfewyears. Our performance during the downturnwas relatively resilient, although notimmune.	The UK economy is projected to growat approximately1.6% in2017, and is ahead ofthe level of output last achieved in 2007 before the
	Webelievethattheresilienceofourperformanceisduetoacombinationoffactorsincluding: > aprimeportfoliooffreeholdproperties; > afocusonLondonandtheSouthEastandotherlargemetropolitancities,whichhave provedmoreresilientduringthedownturnandwherethedriversintheselfstorage marketareattheirstrongestandthebarrierstocompetitionareattheirhighest; > thestrengthofoperationalandsalesmanagement; > continuinginnovationtodeliverthehighestlevelsofcustomerservice; > theUK'sleadingselfstoragebrand,withhighpublicawarenessandonlinestrength;and > strongcashflowgenerationandhighoperatingmargins,fromasecure capitalstructure. We have a large current storage customer base of approximately 52,500 spread across the portfolio of stores and many thousands more who have used Big Yellow over the years. In any month, customers move in and out atthe margin resulting in changes in occupancy.This is a seasonal business and typically we see growth overthe spring and the summer months, with the seasonally weaker periods being the winter months.	global financial crisis. Self storage proved relatively resilientthrough the crisis, with our revenue and earnings increasing overthe last seven years. As the economy has recovered in the pastfew years, the market risk has fallen in line with increasing occupancy. There is increasedmacroeconomic uncertainty associated with the UK's future exitfrom the EU, and this has resulted in a broad range of opinions on the UK's future economic performance. The Group's like-for-like occupancy has increased by 2.8 percentage points in the year from 75.3 % to 78.1%.
Property risk Thereis a risk thatwewill beunabletoacquirenew development siteswhich meetmanagement's criteria. Thiswouldimpactonour abilitytogrowtheoverall storeplatform.	Ourmanagement has significant experience in the property industry generated overmany years and in particularin acquiring property onmain roads in high profile locations and obtaining planning consents.We do take planning riskwhere necessary, although the availability ofland, and competition foritmakes acquiring newsites challenging. Ourin-house developmentteamand our professional advisers have significant experience in obtaining planning consents for self storage centres. Wemanage the construction of our properties very tightly.The building of each site is handled through a design and build contract,with the fit out projectmanaged in-house using an established professionalteamof external advisers and sub-contractorswho have workedwith us formany years to ourBig Yellowspecification.We carried out an external benchmarking of our construction costs and tendering programme in the prior year,which had satisfactory results.	The planning process remains difficult and to achieve a planning consent can take anything from eighteen months to three years. Local planning policy is increasingly favouring residential development over other uses, and we don't expect this to change given the shortage of housing in the UK.
Valuation risk The valuations ofthe Group's investment properties may fall due to external	The valuations are carried out by independent, qualified external valuerswho value a significant proportion oftheUKself storage industry. The portfolio is diversewith approximately52,500customers currently using our stores for awide variety ofreasons.	The revaluation surplus on the Group's open stores investment propertieswas£44.4million in the year(an uplift of4%).
pressures or the impact of performance. Lack oftransactional evidence in the self storage sectorleads tomore subjective valuations.	There is significant headroomon ourloan to value banking covenants.	There has been an increase in transactional evidence in the year, with the Group's acquisition of Lock and Leave, and the acquisition of the Big Box portfolio by StorageMart.

Strategic Report (continued)

Financial Review (continued)

Risk and impact	Mitigation	Change during the year and outlook
Treasury risk The Groupmay face increased costs from adverse interestrate movements.	Ourfinancing policy is to fund our current needs through amix of debt, equity and cash flowto allowus to selectively build outthe remaining development pipeline and achieve our strategic growth objectives,whichwe believe improve returns for shareholders. We havemade it clearthatwe believe optimal leverage for a business such as ours should be LTV in the range20% to30% and this informs ourmanagement oftreasury risk.	Interestrates are forecast to remain low forthe foreseeable future, although following the reduction in the sterling exchange rates following the
	We aimto ensure thatthere are sufficientmedium-termfacilities in place to finance our committed development programme, secured againstthe freehold portfolio,with debt	Brexit referendum, UK inflation is forecast to increase in 2017. Debt providers currently remain
	serviced by our strong operational cash flows. We have a fixed rate loan in place from Aviva Commercial Finance Limited, with 10 years remaining. In the prior year, the Group drew down on a seven year £70 million loan from M&G Investments, which is 50% fixed and 50% floating. For our bank debt, we borrow at floating rates of interest and use swaps to hedge our interest rate exposure. Our policy is to have atleast 45% of ourtotal borrowings fixed, with the balance floating. At 31March 2017 51% of the Group's total borrowings were fixed or subject to interest rate derivatives.The Group reviews its current and forecast projections of cash flow, borrowing and interest cover as part of its monthly management accounts. In addition, an analysis of the impact of significanttransactions is carried out regularly, as well as a sensitivity analysis assuming movements in interest rates and store occupancy on gearing and interest cover.This sensitivity testing underpins the viability statement below.
	TheGroup regularlymonitors its counterparty risk.TheGroupmonitors compliancewith its banking covenants closely.During the yearit compliedwith all its covenants, and is forecastto do so forthe foreseeable future.
Tax and regulatory risk The Group is exposed to changes in the tax regime affecting the cost of corporation tax, VAT and Stamp Duty Land Tax ("SDLT"), for example the imposition of VAT on self storage from 1 October 2012.	We regularlymonitor proposed and actual changes in legislationwith the help of our professional advisers,through directliaisonwithHMRC, and through trade bodies to understand and, if possible,mitigate or benefitfromtheirimpact. HMRC have designated theGroup as having a low-risk tax status, andwe hold regular meetingswith them.We carry out detailed planning ahead of any future regulatory and tax changes using our expert advisors. TheGroup has internalmonitoring procedures in place to ensure thatthe appropriate REITrules and legislation are compliedwith.To date allREITregulations have been compliedwith, including projected tests.	In addition to the regulatory and tax uncertainty linked to the UK's future exitfromthe EU,the Group has experienced an increase in cost of £0.9million forthe year endingMarch 2018 following the Government's reviewof business rates.
TheUK's future exitfrom the EUcreates uncertainty overthe futureUKtax and regulatory environment.
The Group is exposed to potentialtax penalties or loss ofits REIT status by failing to complywith the REITlegislation.
Human resources risk Our people are key to our success and as suchwe are exposed to a risk of high	We have developed a professional, lively and enjoyable working environment and believe our success stems from attracting and retaining the right people.We encourage all our staff to build on their skills through appropriate training and regular performance reviews.We believe in an accessible and open culture and everyone at all levels is encouraged to review and challenge accepted norms, so as to contribute to the	During the year, an employee consultancy conducted an engagement survey of our employees.The survey results showed very high levels of

staffturnover, and a risk of performance of the Group.

in February 2016.

showed very high levels of employee engagement(90%), which was an increase from 86% from our previous survey in 2014.

With unemployment falling, and a risk of higher staff turnover, difficulty in finding the right employees increases.

the loss of key personnel.

We were ranked 80th in the Sunday Times Best 100 Companies to Work For survey

Risk and impact	Mitigation	Change during the year and outlook
Security risk The Group is exposed to the risk ofthe damage or loss of store due to vandalism,fire, or natural incidents such as flooding. Thismay also cause reputational damage.	The safety and security of our customers,their belongings, and stores remains a key priority. To achieve thiswe investin state ofthe art access control systems, individualroomalarms, digital CCTV systems, intruder and fire alarmsystems and the remotemonitoring of all our stores outside of ourtrading hours.We are the onlymajor operatorin theUKself storage industry that has every roomin every store individually alarmed. We have implemented customer security procedures in linewith advice fromthe Police and continue toworkwith the regulatory authorities on issues of security,reviewing our operational procedures regularly.The importance of security and the need for vigilance is communicated to all store staff and reinforced through training and routine operational procedures.	Wehavecontinuedtoruncourses for allour stafftoenhancethe awareness andeffectivenessofour procedures inrelationtosecurity. Weregularlyreviewandimplement improvements toour security processes andprocedures.
Cyber risk High profile cyber-attacks and data breaches are a regular staple in today's news.The results of any breachmay resultin	The Group receives specialist advice and consultancy in respect of cyber security and we have dedicated in-house monitoring and regular review of our security systems, we also limitthe retention of customer data to the minimum requirement. Policies and procedures are under regular review and benchmarked against industry best practice by our consultants.These also include defend, detect and response policies.	We don't considerthe risk to have increased any fasterforthe Group than anyone else; however we considerthatthe threats in the entire digital landscape do continue to increase.
reputational damage, or customer compensation, causing a loss ofmarket share and income.	We have also instigated a new working group for compliance with the new EU General Data Protection Regulation ("GDPR") which comes into effect on 25May 2018.	During the yearwe have continued to investin digital security. Some ofthe changes includemore frequent penetration testing of internetfacing systems, adding components such as anti-ransomware aswell as the maintenance replacement of components such as firewalls to the latesttechnology and specification.

Internal audit

The Group does not have a formal internal audit function because the Boardhas concludedthatthe internal controls systems are sufficientfor the Group at this time. However, the Group employs a Store Compliance Manager responsible for reviewing store operational and financial controls.He reports to theChief FinancialOfficer, andalsomeetswiththe Audit Committee at least once a year. This role is supported by an Assistant Store Compliance Manager, enabling additional work and support to be carried out across the Group's store portfolio. The Store Complianceteamvisiteachoperational storeatleastonceayeartocarry out a detailed store audit.These audits are unannounced and the Store Compliance team carry out detailed tests on financial management, administrative standards, and operational standards within the stores. Part of the store staff's bonus is based on the scores they achieve in theseaudits.Theresultsofeachaudit arereviewedbytheChief Financial Officer,the Financial Controller and the Head of Store Operations.

GOING CONCERN

A reviewoftheGroup'sbusiness activities,togetherwiththefactors likely to affectits future development, performance and positionare set outin the Strategic Report.The financial position of the Group, its cash flows, liquiditypositionandborrowing facilities are showninthebalance sheet, cash flow statement and accompanying notes in the financial statements. Further information concerning the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details ofits financial instruments and hedging activities; and its exposures to creditrisk and liquidity risk can be found in this Report and in the notes to the financial statements.

After reviewing Group and Company cash balances, borrowing facilities, forecast valuation movements and projected cash flows, the Directors believethattheGroupandCompanyhaveadequateresourcestocontinue operations for the foreseeable future. In reaching this conclusion the Directors have had regard to the Group's operating plan and budget for the year ending 31March 2018 and projections contained in the longertermbusinessplanwhichcovers theperiodtoMarch2021.TheDirectors have carefully considered the Group's trading performance and cash flows as a result of the uncertain global economic environment and the other principal risks to the Group's performance and are satisfied with theGroup's positioning. Forthis reason,they continue to adoptthe going concern basis in preparing the financial statements.

VIABILITY STATEMENT

TheDirectorshave assessedtheGroup's viabilityover a fouryearperiodto March2021.ThisperiodisselectedbasedontheGroup'slongtermstrategic plan to give greater certainty overthe forecasting assumptions used.

In making their assessment,the Directors took account ofthe Group's current financial position, including committed capital expenditure. The Directors also assessed the potential financial impact of the various risks and uncertainties set out in the report above on the Group's cash flows, REIT compliance and financial covenants and the likely effectiveness of the mitigating options detailed. The Directors have assumed thatfunding forthe business in the formof equity, bank and insurance debtwill be available in all plausiblemarket conditions.

Based on this assessmentthe Directors have a reasonable expectation thatthe Company and the Groupwill be able to continue operating and meeting all their liabilities as they fall due to March 2021.

Corporate Social Responsibility Report

BIG YELLOW RECOGNISES THAT A HIGH LEVEL OF CORPORATE SOCIAL RESPONSIBILITY ("CSR"), LINKED TO CLEAR COMMERCIAL OBJECTIVES, WILL CREATE A MORE SUSTAINABLE BUSINESS AND INCREASE SHAREHOLDER AND CUSTOMER VALUE.

1.0 INTRODUCTION

Big Yellow recognises that a high level of Corporate Social Responsibility ("CSR"), linked to clear commercial objectives, will create a more sustainable business and increase shareholder and customer value. Our CSR Policy covers all of our operations, as a self storage provider, a property developer, an employer and a participant in our local communities. Big Yellow seeks to meet the demand for self storage from businesses and private individuals by providing the storage space for their commercial and/or domestic needs, whilst aiding local employment creation and contributing to local community regeneration.

2.0 CSR EXECUTIVE SUMMARY

Big Yellowis pleased to deliver another year of steady Corporate Responsibility progress across the Group, full details ofwhich can be found in this CSR Report. Our focus over the last year has delivered the following benefits:

Employee Engagement

We completed an externally managed survey in May 2016 investigating (amongst other factors) our working life, personal development, teamwork, communication andmanagement style in detail.We received a 90% response rate to the survey – and overall a 90% 'Engagement Indicator' from our employees.

Support for Local Charities

We have continued to recognise and support 14 different charities selected by both our stores and head office teams. Our people undertook a variety of activities for these (and other) charities and raised £74,000 of funds during the year (up 66% on 2016). At the same time Big Yellow and Armadillo donated the equivalent of over £940,000 of free storage in the last year(up 25% on 2016).

The Big Yellow Foundation

We registered a new charitable Foundation in January 2017. We are currently piloting the use of the Foundation to raise money from both Big Yellow and its customers. Following the conclusion of this pilot, we will launch it to the whole business in autumn 2017.The aim of the Foundation will be to use the funds to support charities working to bring people back into society from disadvantaged backgrounds.We will also aim to provide them with employment opportunities at Big Yellow and Armadillo.

Health & Safety Record

This has continued at a high standard at both our stores and on our construction projects. Measured by both the number of recorded Minor Injuries and by RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulation), our high standards of Health&Safety have protected our customers, staff, contractors and other visitors.

LED Lighting Investment

We have continued to invest in providing LED lighting both inside our stores, and more recently for all of our external lighting. During the next 12monthswewill continue to deliverthe benefit of LED lighting to all of our external lighting sources – and to both Big Yellow&Armadillo stores that still require internal lighting improvement after recent acquisition.

Greenhouse Gas ('GHG') Emission

Our store electricity use in absolute terms is now 31.3% lower than our peak use year of 2011. Our ability to continue to reduce our absolute electrical use will diminish, as we complete our LED investment program and as we open and acquire new stores. However, our relative GHG Emission (per sq metre occupied)is down 63.8% from our peak year of 2011 and we aim to continue with this relative reduction.

CSR Performance Benchmarking

42% of our stores have EPCs (Energy Performance Certificates) the majority of which are rated A or B. We will also continue to participate in our sustainable benchmarking initiatives with EPRA, FTSE4Good, the Carbon Disclosure Project ("CDP") and the Global Real Estate Sustainability Benchmark ("GRESB").

WE RECOGNISE THE IMPORTANCE OF SUPPORTING LOCAL COMMUNITY PROJECTS AND CHARITIES THROUGH FUNDRAISING AND DONATING FREE STORAGE SPACE. DURING THE YEAR WE DONATED SPACE IN OUR STORES WORTH APPROXIMATELY £940,000 TO CHARITIES.

2.1 OUR PEOPLE

Our people are atthe heart of Big Yellow's business, bringing our values to life through the service thatthey provide and through the energy and passion that drives us to become an ever more responsible and sustainable business.

We recognise that recruiting, retaining and motivating individuals with talent and integrity, and ensuring that we listen to our people and maximise their skills and performance, is key to the continued success of our Company.

We encourage a culture of partnership within the business and believe in staff participating in corporate performance through benefits such as customer feedback rewards, bonus schemes and share incentives. We recognise and reward the exceptional performance, achievements and ideas of our people through a Points Recognition Scheme, and allocated £53,000 of points for the year ended 31March 2017.

Wellbeing and Support

We aim to promote employeewellbeing through a range of flexibleworking options,which include flexitime, staggeredworking hours, home working and sabbaticals. We provide Childcare Vouchers along with a comprehensive range of medical support and advice through our private healthcare scheme and occupational health providers.We have arranged corporate gym membership on a national basis, as well as a "Cycle to Work" scheme and Employee Assistance Programmes.

Communication and Engagement

We continue to recognise the importance of communication and consultationwith an annual Spring Conference,regularformal and informal meetings, quarterly newsletters and weekly operational updates. In addition, the Directors and Senior Management spend a significant amount of time in the stores and are always accessible to employees, at all levels.

In May 2016, we ran our second externally managed Employee Engagement Survey which was structured to look at key areas including our day to day working life, learning and development,team work, communication, management style and leadership.The survey achieved a response rate of 90% (also 90% in 2014) and an Engagement Indicator of 90% (86% in 2014). Management are now using the feedback from the Engagement Survey as the focus of their attention to further improve the working environment.

Training and Development

We continue to promote the development of our staff through ongoing training and regular performance appraisals. For the year ended 31 March 2017 a total of 1,267 days training were provided across the Company, comprising of both sales and operational training, and personal and management development.

We have continued to develop our internal training resources to include e-learning on security, a Health&Safety library, 17 operational and sales based workshops and 10 centrally run courses covering induction, management training and personal development.

During the year, six team members completed our personal development programme designed specifically for Assistant Store Managers, with three of those people having subsequently been promoted to the position of StoreManager. 13 Assistant StoreManagers are currently participating in the new programme, to prepare them for their future progression within the Company as opportunities arise.

During the year a newdevelopment programme for our Sales Advisorswas also introduced,the aimofwhich is to prepare themfor promotion to the position of Assistant Manager.The programme will run on an annual basis with 14 Sales Advisors currently participating.

As a result of our other internal training and development programmes, 53% of our store based staff have been promoted to their current position from a more junior position.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

2.1 OUR PEOPLE (continued)

Community

We continue to recognise the importance of contributing to the local community and we encourage our people to develop close links with charities, schools and other institutions, both locally and nationally, to help to build more economically sustainable environments.

For the year ended 31 March 2017, we recognised and supported 14 different charities which were selected by our store and head office teams. Our people undertook a variety of activities for both these – and other charities – with donations also being made by the Company.

Throughout the year a total of £74,000 was raised for our recognised charities and examples of our fundraising activities and charitable giving have included:

The Phyllis Tuckwell Hospice, Surrey

Teammembers have participated in various charity runs and other events to raise a total of£4,000across the yearforthis Surrey-based hospice.

"Phyllis Tuckwell Hospice Care is delighted to have worked with Big Yellow Self Storage over the last year and would like to thank the Directors and staff for their fundraising. Their events have been creative and good fun, from sweepstakes, raffles and walks to a Halloween chilli lunch.They have also supported us through sponsorship, taking the yellow colour stand at our annual Dash of Colour Run. Without the help of corporate partners like Big Yellow we simply couldn't provide the compassionate end of life care that we do."

Vanessa Beech, Corporate Partnerships Fundraiser, Phyllis Tuckwell Hospice Care

British Heart Foundation

Nine of our stores have acted as "Donation Stations" for the British Heart Foundation, raising a total of just under £20,000 for the year from collecting bags of unwanted clothes and household goods.The funds raised will support the charity's pioneering heart research, as well as the care of people living with heart disease.

Dorothy Stringer School, Brighton

Big Yellowhas donated £8,500 as lead sponsor ofthis Brighton-based school's planned footballtour of South Africa during 2017. 20 students will be given the opportunity to participate in the tour, duringwhich theywilltake partin scheduled games, aswell as visiting various schools and township charities to enable them to fully appreciate the culture of the country.

"Two years ago we set out to create a once-in-a-lifetime experience for the current Year 10 football team; a tour to South Africa. It soon became clear that the trip was going to cost around £50,000 and it was great to receive a donation of £8,500 towards the cost from Big Yellow. This will enable us to offer the students an eye opening experience, as well as kitting them out in tour attire. We are very grateful to Big Yellow Self Storage for their support in helping to make this life changing event happen."

Charlotte Young,Teacher of Physical Education, Dorothy Stringer School

Go Dad Run

Big Yellow has provided sponsorship of £20,000 for the Go Dad Run in June 2016, the aim of which is to raise awareness of, and funds for, Prostate Cancer UK through a series of 5k and 10k runs in different cities around the UK.

"For a small but growing project like Go Dad Run, the relationship with our sponsors is absolutely crucial and in 2016 we were, once again, enormously grateful for the wonderful support from Big Yellow Storage. It was the third year of our partnership and we staged 5K and 10K runs in Sunderland, London, Worcester, Cardiff, Bristol and the Isle of Man, where many hundreds of men and boys pulled their giant Go Dad Run Y-fronts on over their shorts, to take part and raise funds for Prostate Cancer UK - and to raise awareness of important men's health issues. Ourfriends and colleagues at Big YellowSelf Storagewere essentialto helping us to make that happen".

Colin Jackson, CBE, Founder of Go Dad Run

Southwark Tigers Rugby Club, London

During the last year, Big Yellowhas provided sponsorship of £2,500 to this inner city juniorrugby club,whose aim is to benefit young people through the skills learnt in the game of rugby and to make it affordable and attractive to them all.

Caius House, Battersea, London

Caius House is a charity and a youth club based in Battersea, which aims to provide young people within the local community with a safe place to go to where their skills and talents can be progressed to fulfil their potential. During the last year, Big Yellow has provided the Caius House football team with sponsorship of £10,000.

Free Storage Space

In addition to our fundraising activities, we have also provided charities with free storage space. For the year ended 31 March 2017, the space occupied by charities in Big Yellowand Armadillo storeswas 45,500 sq ft,worth approximately £940,000 per annumat currentrents. Some ofthemany charities that have benefited fromthis storage include Cancer Research,Macmillan Cancer Support,the National Childbirth Trust, the British Heart Foundation and a number of food bank and children's charities local to our stores.

The Big Yellow Foundation

Big Yellow registered "The Big Yellow Foundation" in January 2017.This Foundation will help highly innovative charities transform the lives of vulnerable people across the UK. Big Yellowwill donate £1 every time a customermoves into one of our stores.Wewill also ask customers if they would like to join us in supporting our mission at either the point of move in or move out.

The Foundation,whichwill be launched formally in autumn 2017,will focus its support on charities that have developed effective approaches to help the reintegration, training and employment of ex-offenders and of those fleeing persecution, who have been granted asylum by the UK Government.Together we believe we can help vulnerable people across the UK to build brighter lives.Three initial charities that we are working with currently, as part of a soft launch, are Bounce Back, Breaking Barriers and the St Giles Trust.

2.2 OUR HEALTH & SAFETY

Big Yellowrecognises the importance of maintaining high standards of Health&Safety for our customers, staff, contractors and any visitors to our stores.The Group's Health & Safety Committee reviews its Policy, Risk Assessments, performance and records on a quarterly basis. The Policy covers two distinct areas – our construction activities and our routine store operations.

The Health&Safety Committee discuss and reviewany issues reported from our regular meetings held at our head office,Maidenhead (our distribution warehouse), the stores and our construction sites. Our Health & Safety Policy states that all employees have a responsibility for Health & Safety, but that managers have special responsibilities.The responsibilities of Adrian Lee, Operations Director, are to keep the Board advised on Health&Safety issues and to ensure compliancewith the Policy in respect of Construction (via the Construction Director) and store operations (via the Facilities Manager and Head of Store Operations).

The Health & Safety Committee minutes are copied to the CEO, the CSR Manager, the Head of Human Resources, the Facilities Manager and our external Health & Safety consultant. Externally, other interested stakeholders include the Health & Safety Executive (HSE) and Local Government Authorities.

Our external Health & Safety consultant reviews our Policy and performs audits of our stores on a rolling programme, to ensure the implementation of the Group's Health & Safety policies and to ensure compliance with the latest Health & Safety standards. Actions recommended by our consultant are reviewed by the Health & Safety Committee, and if required are then implemented into the operations or construction systems. External Health & Safety audits are carried out by our consultants on a regular basis on each construction site during the construction process.

Our Health&Safety reporting covers all of our stores, our head office,Maidenhead (our distributionwarehouse) and our construction sites. Incidents are recorded for staff, customers, contractors and visitors.The Board receives reports that monitor Health & Safety performance in all these areas. Annual Store Health & Safety Meetings take place for all stores and Maidenhead. Meeting agendas are provided for all meetings by the Facilities Team and the minutes are reviewed by AreaManagers to raise any issueswith our Facilities or Human Resources Teams, where necessary.

Health & Safety performance and incidents are reported and are displayed in the tables below:

2.2.1 Big Yellow Store Customer, Contractor and Visitor Health and Safety

Store Customer, Contractor and Visitor Health & Safety
Year ended 31 March	2013	2014	2015	2016	2017
Number of customer move-ins	65,807	72,772	75,097	75,438	71,715
Number of minor injuries	34	31	50	58	41+
Number of reportable injuries (RIDDOR)*	3	3	4	4	1+
RIDDOR* per 100,000 staff	4.6	4.1	5.3	5.3	0

⁺ Indicates data reviewed by Deloitte LLP as part of their assurance work. See page 58 for the independent assurance report.

* RIDDOR – Reporting of Injuries, Diseases and Dangerous Occurrences.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

2.2.1 Big Yellow Store Customer, Contractor and Visitor Health and Safety (continued)

The number of customer 'move-ins' during the last year reduced from 75,438 to 71,715 (a 5.0% reduction) and this has in part contributed to the reporting of fewerminorinjuries from58 to 41 (down 29%)in 2017. One 'reportable injury'to a customer at Finchley Northwas recorded during the year. Customer minor injuries were mainly cuts, grazes and strains relating to the handling of their goods.Most of these injuries and those of 'visitors' could have been avoided by personal protective gloves and foot-wear. Visitor injuries were due to cuts from their containers, vehicles or business equipment.

2.2.2 Big Yellow Staff Health & Safety (Stores & Head Office)

Year ended 31 March	2013	2014	2015	2016	2017
Average number of staff	286	289	300	318	329+
Number of Minor Injuries	15	13	15	10	9+
Number of Reportable Injuries ("RIDDOR")	3	1	1	1	0+
AIIR* per 100,000 staff	1,049	346	333	314	0+

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

* Annual Injury Incident Rate is the number of staff reportable injuries / average number of staff (x100,000).

Nine staff injuries reported as minor injuries were related to hand or arm injuries. There were no "Fatal Injuries, Notices or Prosecutions" during the year ended 31March 2017.This year our staff training schedules enabled us to provide customers with Fire Health & Safety Risk Assessments, where necessary, which raised their awareness of the potential for personal injuries while they used self storage.

Two new stores, at Nine Elms and Twickenham 2, were acquired in the year and our Cambridge store was open for the full financial year. These changes have increased our average number of staff employed to 329 forthe year. Againstthis increasewe have achieved a reduction inMinor Injuries from 2016.Minor Injuries were mainly cuts, grazes and bruises relating to safety when using stairwells, doors and pallets. There were no "reportable injuries" for staff in the year, so the Annual Injury Incidence Rate (AIIR) decreased to zero against an average store staff increase of 3.5%.There were no "Fatal Injuries, Notices or Prosecutions" during the year ended 31 March 2017.

Total minor injuries for staff, customers, contractors and visitors was 50 and were recorded as follows: 34 to customers, nine to staff, six to visitors and one to a contractor.

2.2.3 Big Yellow Construction 'Fit Out' Health & Safety

Construction Fit-out Contractors and Visitor Health & Safety Year ended 31 March	2013	2014	2015	2016	2017
Number of Total Man Days	610	3,315	3,005	6,560	1,111
Number of Minor Injuries	0	2	1	3	0
Number of Reportable Injuries (RIDDOR)	0	0	0	0	0

There were no 'Man Days' worked on construction 'Fit Out' projects for new stores in 2017. However, our storage partitioning contractors recorded 1,111 man days of work for fitting out storage partitioning in our existing stores. No Minor Injuries or Reportable Injuries were recorded during these works.

Our ground works contractor at the new Guildford Central store was in the 'early piling phase' and was assessed by the independent Considerate Constructors Scheme ("CCS") in February 2017. This scheme monitors and reports on the Health & Safety management and environmental aspects of our construction projects. High scores of 7/10 were achieved for 'Securing everyone's Safety' and 'Care about Appearance'. Good scores of 6/10 were achieved for 'Respecting the Community', 'Valuing theWorkforce' and 'Protecting the Environment'. There were no 'Fatal Injuries, Notices, or Prosecutions' during the year ended 31 March 2017.

3.0 ENVIRONMENTAL RESPONSIBILITY

Our CSR Policy sets out how we manage the impact of our business on society and the local environment, to control our risks and manage our opportunities in a sustainable manner. We participated in the FTSE4Good Annual Index Series survey and achieved a "low environmental impact".We also use the detail in this CSR Report to participate in other benchmarks, such as the annual Carbon Disclosure Project("CDP") and Global Real Estate Sustainability Benchmark ("GRESB")to engagewith our other Ethical Investors. Notwithstanding this and in order to maintain an efficient and sustainable business for our stakeholders, we have continued to commit significant resources to the environmental and social aspects of our storage operations, property portfolio, new store developments and site acquisitions.

In this report we state our energy use and carbon emissions in compliance with the Companies Act and the Climate Change Regulation on Reporting Greenhouse Gas ("GHG") Emissions for listed companies. For more details on our applications for the above benchmarks please go to the 'Basis of Reporting' section of the CSR section of our Investor Relations website.

In this report we have provided a summary of our Scope 1 'onsite' gas use, solar electricity generation and refrigerant use, and Scope 2 'off site' supplied electricity for our carbon dioxide equivalent(CO2e) emissions.We have used theDEFRADepartment Environmental Reporting Guidelines 2013 Version 1.0 (Standard Set 2016; expiring 30 June 2017) conversion factors for our annual GHG Emission calculations and reporting. Also we are reporting using the UK Government GHG conversion factors for company reporting (expiring 30 June 2017).

Finally, we also report on our environmental key performance indicators and identify them using the codes from the Global Reporting Initiative ("GRI"), as applied by the European Public Real Estate Association ("EPRA") at the request of some of our stakeholders. Annual 'same store' portfolio electricity use and carbon emission comparisons are shown. Our materiality threshold for energy use is 5% and for carbon emissions is >1%. A limited level of assurance for our Scope 1 and 2 energy use and GHG emissions is independently applied.This assurance is undertaken by Deloitte LLP in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised).

Long Term Electricity Use – 2008 to 2017

Between 2008 and 2010 we installed motion sensor lighting in many of our stores and renewable energy initiatives were included in our new store openings, such as solar panels (on 10 stores); wind turbines (on two stores); and ground source heat pumps (in five stores) and these achieved both electricity use reduction and sustainable electricity generation across our store portfolio.

From 2010 to 2013 there was an increase in our total electricity use as a result of our new store openings and increases in our customer occupancy. Customers increase electricity use by more regular activation of our motion sensor lighting and the increased use of electrical socket supply in our stores. 2011 was our peak year(benchmarking year)for electricity use.

From 2013, our investment in energy efficiency programmes such as internal and external LED re-lamping across the store portfolio and the installation of larger capacity (50kWp) solar panels (at seven of our stores)reduced our electricity use and increased our own electricity generation to 2016.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

3.0 ENVIRONMENTAL RESPONSIBILITY (continued)

In the last 12 months our customer occupancy has continued to grow and some stores have required further internal partitioning works (the fit out of second phases of storage space) which has increased our electricity use. In addition store acquisitions at Nine Elms and Twickenham 2 have further added to our total electricity use. Electricity use has therefore increased our linear trend and total use in 2017 was 9,568,862 kWh / year.The acquired stores will be re-lamped with energy efficient LED lamps in the future years.

Electricity Use from Peak Energy Year 2011 (GRI Elec-Abs / G4-ENS3) Year ended 31 March	2013	2014	2015	2016	2017
+ Electricity Use (kWh)	13,153,960	11,688,629	9,643,341	9,376,085	9,568,862
Reductions from 2011 Peak (%)	(5.5%)	(16.1%)	(30.7%)	(32.7%)	(31.3%)

Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

Note: 2011 was our peak electricity use (13,925,217 kWh).

From2017,we no longerincluding Bagshot andMaidenhead in the Group energy totals, and the consumption atthese stores is nowreported in a separate table.This approach is explained in the Basis of Reporting.

New Store Acquisitions and 'Same Store Portfolio' Electricity Use (2016 v 2017)

Two newly acquired stores in 2017 increased ourtotal electricity use by 99,673 kWh. On an annual 'same store' basis,the 2017 total electricity use would have been 9,469,189+ kWh, without the acquisitions, 32.0% below our peak.

Store Portfolio Electricity Use and Climate Change Levy ("CCL")

Scope 2 Electricity Use and Climate Change Levy Year ended 31 March	2013	2014	2015	2016	2017	% change from peak
+ Electricity Use (kWh)	13,153,960	11,688,629	9,643,341	9,376,085	9,568,862	(31.3%)
CCL (£/kWh)	0.00509	0.00524	0.00541	0.00554	0.00559	30.0 %
CCL (£)	£66,954	£61,248	£52,171	£51,944	£53,490	(10.7%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for independent assurance report.

Note: 2011 is our peak electricity use (13,925,217 kWh). 2011 Grid electricity cost(excluding VAT) but including CCL (at 0.0043 £ / kWh) was £59,878.

Our UK network electricity supply provides 94% of our total energy use. We continue to seek reductions in our kWh use, costs and taxes through investmentin our energy efficienttechnology and fromour solar electricity 'self supply'. Our electricity use has reduced 31.3% since our peak use year in 2011, notwithstanding which the Climate Change Levy has increased by 30%. The CCL for 2017 (£53,490) has been reduced by 20.1% from its peak in 2013, due to our investment in our energy efficient internal and external LED re-lamping programmes. In 2017 there has been an increase of 3% in the CCL due to an increase in the CCL rate and more electricity use, as a result of growing customer numbers and the acquisition of the two additional stores.

Store Portfolio Long Term Solar Electricity Generation (2009 to 2017) (MWh)

Our portfolio of storeswith roof-mounted solar PV installations generate lowcarbon electricity thatismonitored for performance and receives financial payments from the energy companies thatwe exportto.There are 17 storeswith PV installations and the 'Feed-in Tariff' payments for generation and 'Deemed Export' of electricity apply to all these installations.

Solar generation performance in the first quarter of 2017 reduced due to our PV systems at FulhamandMerton requiring inverterreplacement and maintenance,respectively. In June 2016, solar generation also under-performed due to unseasonal cloud cover. In the second and third quarters of 2017 our Sheen and Bromley solar installations lost generation data communication; these were repaired during annual maintenance visits and payments then continued to be received.

Renewable Energy Generation, Savings and Materiality

Onsite Solar 'Self Supply' Generation
Year ended 31 March	2013	2014	2015	2016	2017
Solar Generation (kWh)	208,807	285,832	314,068	358,279	342,670+
Total Grid Use (kWh)	13,153,960	11,688,629	9,643,341	9,376,085	9,568,862
Total Grid Savings (£)*	74,724	100,468	106,607	115,216	113,652
Solar % of Grid Use (kWh)	1.6%	2.4%	3.3%	3.8%	3.6%

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

* Solar Payments from Energy Companies are Feed in Tariff plus Deemed Export kWh payments amounting to £82,812;

Supplied UK Network displaced electricity savings; 342,670 solar kWh x 9p Grid kWh displaced amounting to £30,840.

Note: 2011 is our first significant(107,074 kWh/y) solar electricity 'Self Supply' generation.

In total our solar portfolio generated 342,670 kWh in 2017, a reduction of 4.4% compared to the previous year. This was mainly due to maintenance issues and less sunshine hours in June 2016. Solar electricity generation represents a saving of approximately 9 pence per kWh for displaced UK network supplied electricity, a saving of £30,840 over the year. The total payments from EDF and Good Energy for solar generation 'Feed in Tariff' and 'Deemed Export' payments was £82,812, providing us with a total saving of £113,652 for 2017.

Solar electricity contributed 3.6% of our total supplied store electricity use or 14.2% of the electricity use in the 17 stores with solar PV systems. Our larger capacity 50 kWh installations (such as the system at Gypsy Corner) generate approximately 40,000 kWh/year. This can equate to nearly 30% of the stores annual kWh demand. During the first three years of a stores trading (from new build) we can export more electricity (up to 60% of the electricity generated) back to the Grid. In later years, when customer occupancy rises to store 'maturity' (85% occupancy) more solar electricity is used by the store and export to the national network diminishes.

Customer Gas Use in Stores for Flexi Office Heating

GRI Absolute Gas Use Reductions ('Fuels-Abs' F4-EN3) Year ended 31 March	2013	2014	2015	2016	2017
Gas Use (kWh)	716,508	652,181	602,563	592,257	630,463+
Gas Use Reductions from 2012 Peak Use (%)	(3.4%)	(12.1%)	(18.8%)	(20.2%)	(15.0%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

Note: 2012 is our peak gas use benchmark (742,086 kWh).

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

3.0 ENVIRONMENTAL RESPONSIBILITY (continued)

Gas use for the heating of our flexi offices at eight stores reached a peak benchmark in December 2012, due to the coldest winter since our records began.The increase in gas use in 2017was 6.5% and is predominantly due to higherflexi office occupancy compared to the previous two years.

Total Energy Use (Electricity and Gas) and Materiality

Total Electricity and Gas (kWh) Use and Gas Use Materiality (%)

Year ended 31 March	2013	2014	2015	2016	2017
Total Energy Use (kWh)	13,870,468	12,340,810	10,245,904	9,968,342	10,199,325
Total Reductions from 2011 Peak (%)	(4.9%)	(15.4%)	(29.7%)	(31.6%)	(30.1%)
Gas Materiality %	5.2%	5.3%	5.8%	5.9%	6.2%

Note: 2011 was our peak energy use year(14,581,234 kWh)

In 2017, our combined UK network supplied energy (electricity and gas)reduced by 30.0% from our peak energy use in 2011, mainly due to electricity efficiency reductions after our LED re-lamping programmes and reduced gas use due to new boiler efficiency and less demand in thewarmerwinters since 2012. In 2017 therewas a 2.3% increase in energy use due to higherlevels of customer occupancy in our stores and the acquisition of two new stores.

Our gas use 'materiality' compared to total gas and electricity use increased to 6.2% in 2017, 1.2% above the materiality threshold level of 5% for reporting gas data.

UK Network Supplied Energy Intensity (Electricity and Gas)

Energy Intensity per Annual Average Occupancy and per Gross Internal Floor Area (Energy-INT/CRE1)						% change
Year ended 31 March	2013	2014	2015	2016	2017	from 2011 peak
Total Energy Use (kWh)	13,870,468	12,340,810	10,245,904	9,968,342	10,199,325	(30.1%)
Annual Average Occupancy (m2)	244,521	263,101	283,732	304,964	325,537	64.5%
kWh/Annual Average Occupancy	56.7	46.9	36.1	32.7	31.3	(57.5%)
Gross Internal Floor Area (m2)	582,872	582,872	605,419	621,050	629,686	15.4%
KWh / GIFA (m2)	23.8	21.2	16.9	16.1	16.2	(39.3%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

Note: 2011 is our Peak Energy Use of 14,581,234 kWh; Annual Average Occupancy was 197,884 m2;

Intensity was 73.7 kWh / occupancy m2; Intensity was 26.7 kWh / m² of GIFA .

Since 2011 customer occupancy has increased by 64.5% and energy use intensity (per annual average occupancy) has reduced by 57.5%. Our total store portfolio gross internal floor area ('GIFA')increased between 2011 and 2017 by 15.4% through new store openings and store acquisitions.This has helped us to achieve a 39.3% reduction in kWh use per GIFA from 2011.

Energy (Electricity and Gas) Use / Revenue Intensity (Energy-INT/CRE1) Year ended 31 March	2013	2014	2015	2016	2017	% change from 2011 peak
Total Energy Use (kWh)	13,870,468	12,340,810	10,245,904	9,968,342	10,199,325	(30.1%)
Revenue (£000)	69,671	72,196	84,276	101,382	109,070	76.3%
kWh / £ Revenue	0.20	0.17	0.12	0.10	0.09	(62.5%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

Note: 2011 is our Peak Energy Use 14,581,234 kWh; Revenue was £61,885,000; kWh / £ Revenue was 0.24;

Group revenue has increased by 76.3% since 2012. Our energy use intensity (kWh per revenue) has reduced by 62.5% in the same time period. Revenue intensity reduction represents all of the self storage activities and services from our 73 store portfolio. A reduction of 10% in our energy use by revenue intensity was achieved in 2017, maintaining our annual reductions in intensity since 2011.

'Non-Store' Portfolio (Head Office and Maidenhead) Energy Use (Electricity) kWh

Head Office and Maidenhead Electricity Use
Year ended 31 March	2012	2013	2014	2015	2016	2017
Head Office (kWh)	115,515	110,829	104,366	98,585	89,078	89,448
Maidenhead (kWh)	15,934	16,133	17,813	16,927	19,182	18,747
Total (kWh)	131,449	126,962	122,179	115,511	108,260	108,195
Reductions*	(11.2%)	(14.2%)	(17.4%)	(22.0%)	(26.9%)	(14.2%)
Annual Reductions	(11.2%)	(3.4%)	(3.8%)	(5.5%)	(6.3%)	(0.1%)

* Reductions from Peak year 2011: Head Office GIFA was 524 m2; Energy use was 126,050 kWh;

Note: Maidenhead GIFA was 889 m2; Energy use was 21,942 kWh; 2011 Total Portfolio GIFA 1,413 m2;Total energy use was 147,992 kWh.

Our non-store portfolio consists of two business administration centres; our head office at Bagshot, Surrey and our warehouse depot for the storage and distribution of our packing materials atMaidenhead, Berkshire.They both provide services to the store portfolio.The head office electricity use ismore intense due to higher staff occupancy. Electricity ismainly used forlighting, heating or cooling and computer equipment in the office areas. The total electricity reductions for both the head office and Maidenhead from the benchmark year 2011 was 14.2%. The reductionsweremainly due to energy efficient LED re-lamping andmore efficient air conditioning and IT equipmentinvestment programmes.

Mandatory Greenhouse Gas (GHG) Emissions Statement

The ISAE 3000 Standard provides an evaluation methodology for both the quantitative and qualitative aspects of our carbon management and our energy use. We report our 'self storage' portfolio emissions and the 'absolute' emissions that include our 'non store portfolio'. Our key carbon emission performance indicators use the GRI and the EPRA codes, at the request of our investors and other stakeholders, for real estate investment trust(REIT) benchmarking purposes.

We report energy use and carbon emissions in compliance with the Companies Act and Climate Change Regulation on Reporting Greenhouse Gas ("GHG") Emissions forlisted companies. Formore details on our applications forthe above benchmarks see the 'Basis of Reporting' section ofthe CSR section of our Investor Relations website.

In this Report we have provided a summary of our Scope 1 'onsite' heating gas use, solar electricity generation and refrigerant use, and Scope 2 'off site' UK supplied electricity, for GHG equivalent(CO2e) emissions.We have used the DEFRA DECC Version 1.0 (Standard Set 2016; expiry on 30 June 2017) conversion factors for our annual emission calculations and reporting.

UK Government GHG Emission Conversion Factors For Company Reporting Standard Set From 30/06/2016 To 30/06/2017

Scope	Fuels	Unit	Conversion Factors
1	Natural Gas (Gross CV)	kWh	0.18400
1	R410A Refrigerant*	KgCO2e	2,088
2	Electricity Grid Supply	kWh	0.41205
3	Electricity Transmission & Distribution	kWh losses	0.03727
3	Commercial Refuse / Waste Disposal	kgCO2e	199.0

* Kyoto Protocol air conditioning Refrigerant 'top up' / 'global warming fugitive emissions'.

Annual 'same store' portfolio electricity use and carbon emission comparisons are used. Our materiality threshold for energy use is 5% and for carbon emissions is > 1 %. A limited level of assurance for our Scope 1 and 2 energy use and GHG emissions is independently applied. This assurance is undertaken by Deloitte LLP in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised).

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

3.0 ENVIRONMENTAL RESPONSIBILITY (continued)

Scope 1 Real Estate Portfolio – Direct GHG Emissions

Eight of our stores provide flexi office services with gas heating for customers.

Scope 1 Flexi Office Stores Gas Heating Emissions (GHG-Dir-Abs) Year ended 31 March	2013	2014	2015	2016	2017	% change from 2012 peak
Gas Use (kWh)	716,508	652,181	602,563	592,257	630,463	(15.0%)
GHG Emission (tCO2e)	133.0	120.0	111.5	109.2	116.0+	(15.8%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

Note: 2012 is our peak benchmark year for gas use (742,086 kWh) and emissions (137.8 tCO2e).

The financial year 2017 heating gas conversion factor was kWh x 0.18400 (kgCO2e).

From 2012 milder winters have reduced gas use and GHG emissions by 15.8%. In 2017 our GHG emissions have increased by 6.2% due to increased customer occupancy of our flexi-offices with gas heating.

Scope 1 Refrigerant (R410A) Replacement and GHG Emissions
Year ended 31 March	2013	2014	2015	2016	2017	from 2014 peak
Refrigerant Use (Kg)	66.5	112.4	11.9	11.3	32.5*	(71.1%)
Emissions (tCO2e)	286.3	354.8	20.6	21.9	67.9+	(80.9%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

* The Scope 1 Refrigerant R410A, 2017 Kg:tCO2e conversion factor was 2,088;

Note: 2014 was our peak year for refrigerant replacement and related GHG emissions.

This year seven stores had refrigerant 'top up' totalling 32.5 kg. Refrigerant use has reduced from our peak use in 2014 by 71.1% and tCO2e emissions have reduced by 80.9%. Scope 1 Refrigerant emissions from our store portfolio air conditioners occur when small quantities of Refrigerant require 'topping up'.The Refrigerant we use (R410A) is a 'Kyoto Protocol Blend' that maintains an efficient working environment. Refrigerant use has a direct global warming impact and is required to be recorded for local and national reporting purposes over a 100 year period, by the Intergovernmental Panel on Climate Change.

Scope 1 Total Direct Gas and Refrigerant GHG Emissions Year ended 31 March	2013	2014	2015	2016	2017	% change from 2014 peak
Scope 1 Gas (tCO2e)	133.0	120.0	111.5	109.2	116.0+	(3.3%)
Scope 1 Refrigerant (tCO2e)	286.3	354.8	20.6	13.5	67.9+	(81.0%)
Total Scope 1 (tCO2e)	419.3	474.8	132.1	122.7	183.9+	(61.3%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

Note: 2014 was the peak year forTotal Scope 1 'Direct' GHG emissions.

The 2017 total Scope 1 'Direct' GHG emissions from gas and coolant emissions is 183.9 tCO2e.This represents a significant 61.3% reduction in GHG emissions from our peak emissions year in 2014 and was partly due to our choice of Refrigerant, which is now an efficient Kyoto Protocol Blend.

Scope 2 National Network Supplied Electricity and GHG Emission

Scope 2 Electricity GHG Emission Year ended 31 March	2013	2014	2015	2016	2017	% change from 2011 peak
Electricity (kWh)	13,153,960	11,688,629	9,643,341	9,376,085	9,568,862+	(31.3%)
Scope 2 (tCO2e)	6,470	5,682	5,908	4,456	3,943	(41.7%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

Note: 2011 was the peak electricity use (13,925,217 kWh and 6,758 tCO2e).

Our Scope 2 UK Network Supplied Electricity use has reduced by 31.3% from our peak in 2011 due to our energy efficiency programmes; these have reduced GHG emissions by 41.7% overthe same time period. Our Scope 2 supplied electricity has had a variable fuel mix overthe last decade. In recent years we have estimated that low carbon renewables and nuclear generated supplied electricity have contributed to reducing our GHG emissions by around 1% per year over the last 5 years, based on DEFRA DECC UK Scope 2 electricity conversion factors.

GHG Emission Reductions

Since 2011 our carbon reduction programme has focused on themost significant Scope 2 Grid supplied electricity use andwe have achieved reductions based on investment in efficient lighting and maintaining our renewable electricity generation. We continue to monitor future improvements in replacement LED lamp efficiency to meet the long-term 'climate change science-based targets'.

Our electricity supply from power stations provided 95% of our total annual energy in the year ended 31 March 2017.

Our annual average carbon emission reductions from 2011 is approximately 7% per annum; more than double the target set for the commercial property sector to meet the UK Government's GHG emission target of a 34% reduction by 2020 (or a 3.5% reduction per annum to 2050). Apart from these savings, our electricity efficiency investment programmes have achieved proportional cost savings on our CCL bills and our annual CRC Taxes.

Store Portfolio 'Like-for-Like' Electricity and tCO2e Reductions

GRI and EPRA 'Like-for-Like' Standards (G4-EN3 / Elec-LFL)
Year ended 31 March	Portfolio 2016	Portfolio 2017	% change
Total Electricity Use (kWh)	9,376,085+	9,568,862	2.1%
2016 Acquired Store Use (kWh)	(108,260)	(99,673)**	–
LFL Electric Use (kWh)	9,267,825	9,469,189	2.2%
LFL tCO2e	4,581	3,903+	(14.8%)

* Excluding non-store portfolio electricity use (Head Office and Maidenhead) 2016.

** Excluding our acquisitions at Nine Elms and Twickenham 2 kWh use in financial year 2017.

kWh conversion factor in 2016 is 0.49426; and conversion factor in 2017 is 0.41205

The 'Like-for-Like' store portfolio overthe lasttwo financial years, excluding ourtwo administrative buildings and the two store acquisitions, indicate that electricity use in 2017 increased by 2.2% compared to the previous year. However,the 'Like-for-Like' stores have delivered GHG emission reductions of 14.8% in 2017.

Climate Change Act 2008 - 'Carbon Reduction Commitment' ("CRC") Tax

The Department of Energy and Climate Change ("DECC") and the Environment Agency ("EA") are stakeholders in the policy for reducing carbon dioxide emissions from large private sector organisations.

CRC Carbon and Tax Reductions (2013 to 2017)
Year ended 31 March	2013	2014	2015	2016	2017*
Total tCO2 Emissions*	7,598	6,415	5,408	4,926	–
Reduction in tCO2 (%) from 2011 Peak	(0.1%)	(15.7%)	(28.9%)	(35.3%)	–
Tax Rates (£/tCO2)	£12.00	£12.00	£16.40	£16.90	£17.20
Tax Payments (£)	£91,176	£76,980	£88,691	£83,249	–
Tax Reductions from 2011 Peak (%)*	(0.1%)	(15.7%)	(2.9%)	(8.8%)	–

* Annual CRC Tax reporting occurs after the CSR Report publication and we provide the numbers later in 2017.

Note: 2011 was the peak CRC Tax Payment of £91,296 (7,608 tCO2) at £12.00/tCO2.

tCO2 emissions from Grid supplied electricity, gas and self-supplied solar panel electricity.

The CRC Tax Rate on carbon emissions from our use of network electricity and gas and from self supplied solar electricity rose from £16.90 pertonne in 2016,to £17.20 pertonne in 2017. Underthe CRC Tax scheme ourtotaltCO2 emissions reduced by 35.3% in 2016 (from our peak emissions in 2011). Our CRC Tax reduction from 2011 to 2016 was 8.8%.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

3.0 ENVIRONMENTAL RESPONSIBILITY (continued)

Total Scope 1 and 2 GHG Emissions

In 2017 total Scope 1 and Scope 2 GHG Emissions achieved a reduction of 40.0% from our peak in 2011.This reduction is partly due to decreases in Scope 1 refrigerant efficiency. Reductions in Scope 2 were achieved due to contributions from our solar PV investments.

Total GHG Emission Reductions (tCO2e) (GHG-Dir-Abs and GHG-Indirect-Abs)
Year ended 31 March	2013	2014*	2015	2016	2017	% change from peak
Scope 1 Emissions	419.0	474.8	132.1	122.7	183.9+	(61.3%)
Scope 2 Emissions	6,051.0	5,207.0	4,776.0	4,333.5	3,943+	(42.7%)
Total (tCO2e)	6,470.0	5,681.8	4,908.0	4,456.2+	4,126.9+	n/a

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report

* 2014 was the peak Scope 1 emissions (474.8 tCO2e) benchmark.

Note: 2011 was the peak Scope 2 emissions (6,879.5 tCO2e) benchmark .

Scope1emissions fromour stores represent only4.5% of our combined Scope1and2emissions in2017. Last yearless refrigerantreplacement was required for the third year from our peak use in 2014.

Scope 1 and 2 GHG Emission Intensity

Our GHG Emissions 'intensity' indicators are based on average customer occupancy (m2), total Group revenue (£) and gross internal floor area ("GIFA" per m2).

Scope 1 and 2 GHG Emission Intensity / Occupancy, Revenue & GIFA (GHG-Int.) % change
Year ended 31 March	2013	2014	2015	2016	2017	from 2011 peak
Total (tCO2e)	6,470.0	5,681.8	4,908.0	4,456.2	4,126.9+	(40.0%)
Average Occupancy (m2)	244,521	263,101	283,732	304,964	325,537	64.5%
kgCO2e /Occupancy	26.5	21.6	17.3	14.6	12.7+	(63.5%)
Revenue (£000)	69,671	72,196	84,276	101,382	109,070	76.3%
kgCO2e / Revenue (£)	0.09	0.08	0.06	0.04	0.04+	(63.6%)
GIFA (m2)	582,872	582,872	605,419	621,050	629,686	15.4%
kgCO2e / GIFA (m2)	11.1	9.7	8.1	7.2	6.6+	(47.6%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

Note: Peak GHG emissions benchmarkwas 6,879.5 tCO2e in 2011; Occupancywas 197,884 m2; kgCO2e / Occupancywas 34.8. Revenuewas £61,885,000; kgCO2e / £ Revenue was 0.11. GIFA was 545,490; kgCO2e / GIFA m2 was 12.6.

GHG Emission per average occupied space have reduced by 63.5% and GHG emissions per revenue have reduced by 63.6%. GHG emission intensity per GIFA has reduced by 47.6% from our peak. Our future GHG Emission reduction programme is to continue to invest in energy efficiencies and renewable energy, where viable, on new build and acquired stores.

Long Term Energy Scope 1 and Scope 2 GHG Emission Target Review (2008 – 2020)

The Kyoto Protocol Reduction Target (2008 to 2012)

From2008 to 2010we achieved store electricity use reductions by investmentin ourmotion sensorlighting and lowcarbon renewable energy 'self- supply'. From2010to2013we had an increase in electricity use as a result of our newstore openings and increased customer occupancy. This increase in our emissions delayed the achievement of our 2008 to 2012 Kyoto Protocol Reduction Target of 12.5% until 2014.

The UK Climate Change Act (2008)

The Climate Change Act was made legally binding in the 2009 Budget. It has an interim target of GHG Emission reduction of 34% by 2020. The longer-term target is to reduce GHG Emission by 80% by 2050 (or by approximately 3.5% per year).

Our Target is to Reduce Scope 1 & Scope 2 GHG Emissions by 34% by 2020

Our annual GHG Emission since peak energy use in 2011 has reduced by 35.2% or approximately 5% per year on average.

In order to commit to long-term climate change 'science-based' targets we will commit to investing in improved LED technology as they become more efficient, and renewable solar energy on new build stores.This year we acquired two stores at Nine Elms and Twickenham 2, and these stores will be part of our internal and external LED re-lamping programmes in the future.These technologies will achieve levels of decarbonisation required to keep global temperatures on a pathway to 2oC above global pre-industrial levels, by 2100.

		Scope 1 and 2 GHG Emission Intensity / Occupancy, Revenue & GIFA (GHG-Int.)

Year ended 31 March	2011	2012	2013	2014	2015	2016	2017	2020 Target
tCO2e	6,880	6,284	6,470	5,682	4,908	4,456	4,127	4,281*
% Reduction	6.1%	3.1%	0.3%	12.4%	24.3%	31.3%	36.4%	34.0%

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

* 2008 (Scope 1 and 2) GHG emission (6,487 tCO2e) to reduce by 34% (4,281 tCO2e target).

In 2017, we have achieved a 36.4% reduction in Scope 1 and Scope 2 GHG Emission from 2008, which is an annual average reduction of approximately 4% per year. In 2017 we also reviewed the longer term UK 'Real Estate Environmental' target of a 3.5% reduction in GHG Emission, which is now aligned to the Government's 2050 goal.

Managing the Non-Physical, Physical and Financial Risks of GHG Emission and Climate Change for our Customers, Investors and Other Stakeholders.

Managing the Non-Physical Risks and Opportunities

Overthe long term, Big Yellow's 'non-physicalrisks and opportunities' have been governed by EU and UK regulation and 'best practice'within the real estate investment sector. The significance of GHG emission and 'climate change' have been reviewed since 2008 within Board Reports and CSR Meetings. Building certifications such as Energy Performance Certificates ("EPCs"), the Building Research Establishment AssessmentMethodology ("BREEAM") and the Considerate Constructors Scheme ("CCS") are all used in annual investor benchmarks, such as the FTSE4Good; the Carbon Disclosure Project("CDP"); the Global Real Estate Sustainability Benchmark ("GRESB").

Financial Risks and Opportunities of Climate Change

The financial risks and opportunities of Climate Change are within the cost of sustainable planning, designing and constructing of our new store developments, which can be more sustainable and resilient in the longer term.The financial risks involve reviewing the existing and acquired stores against extreme weather events such as seasonal storms and flooding. Our investors also appreciate disclosures and performance benchmarks of our portfolio set against sustainable development and energy efficiency benchmarks to assess our annual reduction in carbon emissions and taxes. Internalregulatory briefs on compliance and high standardswithin real estate benchmarks,makes Big Yellow an efficient and low risk investment.

Physical Risks and Opportunities

The physical risks from increased GHG emission is climate change, global warming, and the consequences of higher risk weather systems that can increase temperatures, storm frequency, flooding and/or droughts.

Big Yellow has physically invested in energy efficiency in order to reduce electricity use and GHG emission. Our solar stores have customer facing electronic screens displaying realtime 'solar generation'(kWh) and 'carbon emissions (tCO2) saved' in customer reception areas.

Big Yellowhas also trialled and invested in 'green roofs' and 'greenwalls' on several of our stores (Barking, Chiswick, Fulham, HighWycombe and Sutton) in the urban areas of our towns and cities.These investments provide shade to our stores in the summer that are susceptible to the 'urban heat island effect'. Green roofs can store moisture after rainfall that evaporates in the spring and summer seasons and cools the upperfloorlevels. 'Rainwater Harvesting Systems' are also installed (Barking, Chiswick, Liverpool,Merton, Sheffield and Sutton)in order to provide landscape irrigation in the summer months. Several stores have 'sustainable urban drainage systems' that provide permeable car park surfaces or peripheral soft landscaping that can regulate surface water to ground waters and local rivers.

Corporate Social Responsibility Report (continued)

3.0 ENVIRONMENTAL RESPONSIBILITY (continued)

Big Yellow Store Portfolio Asset Certifications

This year we are reporting some of our CSR KPIs and identifying them using the codes from the GRI and EPRA.This is at the request of some of our stakeholders, to assess sustainable development performance.

No.	Store	EPCs	"BREEAM" Certification	Other Environmental Investments	Solar (kWh) Capacity	Gross Internal Floor Area m2
1	Balham	B	GSHP 4kWp		10 kWp	8,361
2	Barking	A	Green Roof	RWH	50 kWp	8,360
3	Birmingham	C	-		-	8,361
4	Bromley	B	GSHP 15kWp		7 kWp	9,867
5	Camberley	A	-	SUDS	10 kWp	8,849
6	Cambridge	B	-		-	7,264
7	Chiswick	B	Green Roof		50 kWp	10,678
8	Chester	E	-		-	8,179
9	Ealing	B	-		-	7,887
10	Edinburgh	D+	-		26 kWp	8,779
11	Eltham	C	-		-	9,793
12	Enfield	B	'Excellent'		50 kWp	8,367
13	Fulham	B	Green Roof; GSHP		28 kWp	19,370
14	Gypsy Corner	B	-		50 kWp	9,707
15	High Wycombe	B	Green Roof		-	8,431
16	Kennington	B	GSHP		4 kWp	9,339
17	Liverpool	C	-	RWH	-	8,361
18	Merton	B	GSHP	RWH	9 kWp	9,755
19	New Cross	B	-		50 kWp	8,623
20	Nottingham	C	-		50 kWp	9,058
21	Oxford 2	D	-		-	4,266
22	Poole	C	-		-	7,386
23	Reading	A	'Excellent'	SUDS	9 kWp	8,640
24	Richmond	B	-		18 kWp	4,855
25	Sheen	B	'Excellent'; GSHP		7 kWp	8,919
26	Sheffield Bramall Lane	B	-	RWH	-	8,361
27	Sheffield Hillsborough	B	-		-	8,361
28	Stockport	B	-		-	8,288
29	Sutton	B	Green Roof	RWH	-	9,755
30	Twickenham	A+	-	SUDS	16 kWp	10,591
	"Green" stores	30	25,926 m2			258,924 m2
73	Total Stores	41%	4.1%			629,686 m2

Certified Assets (EPRA 'Cert-Tot' and GRI 'CRE8')

All stores have energy efficient LED lighting; motion sensor lighting; and automatic electricity meter readers. GSHP: Ground Source Heat Pump, SUDS: Sustainable Urban Drainage System, RWH: Rainwater Harvesting

Energy Performance Certification ("EPC") Legislation

As owners of property who lease space to members of the public, we are required to display EPCs to our customers from 1 October 2008. Certification is required at new store openings, store acquisitions and when solar panels are retrofitted onto older stores. We have provided 30 EPCs to date in our stores, representing 41% of the portfolio. Of the stores certified 73% have high 'A' or 'B' ratings, mainly due to energy efficient internalLEDre-lampingandinvestmentinlowcarbonelectricity'self-supply', suchas solarandgroundsourceheatpumpinstallations.Considering that the whole portfolio has internal energy efficient LED lighting, apart from the two most recent acquisitions, we are comfortable that the pre-October 2008 storeswill atleast achieve the EPC 'B'rating in the future,when the opportunity to rate themarises.

Building Research Establishment Environmental Assessment Methodology ("BREEAM")

BREEAM certification is a local planning requirement for our stores, especially for new developments in high-density urban environments. Themethodologyassesses impactsandopportunities forenhancingthedesignandconstructionenvironmentalaspects.Thecertificationincludes areviewofnewstoreenergy, sustainablebuildingmaterials,waterefficiency,wasterecyclingandecology.Thereviewalsoincludes socialaspects of the building life including its resource management, health, well-being, modes of transport and pollution reduction. Our BREEAM ratings are mainly'Excellent' scoringinthe75–76%rangeandhighestintheareasoflanduseandecology;transport;waste;pollution;andenergyefficiency.

4.0 SCOPE 3 – VOLUNTARY SUPPLY CHAIN GHG EMISSION

Scope 3 supply chain emissions are 'Greenhouse gases' from electricity supplier losses during transmission and distribution of electricity to our stores.

Scope 3 – Electricity Supply and Distribution GHG Emission Losses Year ended 31 March	2013	2014	2015	2016	2017	% change from 2011 peak
Total Electricity Use (kWh)	13,153,960	11,688,629	9,643,341	9,376,085	9,568,862+	(31.3%)
Scope 2 (tCO2e)	6,051	5,207	4,776	4,333	3,943+	(41.7%)
Scope 3 (tCO2e)	501	445	417	355	357	(34.4%)
Total (tCO2e)	6,552	5,652	5,193	4,688	4,300	(41.1%)

⁺ Indicates data reviewed by Deloitte LLP. See page 58 for their independent assurance report.

Note: Peak energy usewas 2011 (13,925,217 kWh);total CO2e Scope 2 tonnagewas 6,758 tCO2e; Scope 3was 544 tCO2e; and totaltonnage was 7,302 tCO2e).

The Transmission and Distribution Conversion Factor for 2017 was 0.03727.

The energy efficiency investment programmes within our stores have reduced electricity demand from our supplier's power stations.Total transmission and distribution losses (Scope 3 losses) have therefore reduced by 34.4% since 2011.

Scope 3 Store Waste Supply Chain (Recycling & Emissions)

Waste Sources and Segregation

Our main source of waste is from the operational activities of our stores, mainly retail and office activities that have a relatively low environmental impact. Our store staff apply best practice waste segregation for general and mixed dry recyclable materials.

Waste Recycling Contractor

Our recycling contractor provides further segregation and recycling of our waste. Since our 'total waste' benchmark of 2011 (244 t) our store portfolio has increased from 62 to 73 stores, and total waste has increased to 325.1 t in 2017, an increase of 33% from 2011. The percentage ofwaste recycled has reduced from73% in 2013 to 59% in 2017.This reduction in our contractors recycling is an increasing trend due to a reduction in the supply price of some mixed dry recycled materials, such as paper and cardboard.

Waste to Landfill and Landfill Tax

An increasing amount of 'General waste', 130 tonnes (41% of general waste) went to landfill in 2017, as compared to 69 tonnes (28% of general waste) in 2011, an increase of 53% over six years. Landfill Tax is an environmental tax paid in addition to normal landfill costs. Reducing,re-using and recyclingwaste can reduce the LandfillTax rate to £2.65 perton (formore inertwaste). If no segregation orrecycling occurs, an increase in the tax to £84.40 per ton can apply to more active waste. These changes have increased our landfill tax by 32%, mainly due to the reduction in the market value of our recyclate that is now sent to landfill due to its low price.

Scope 3 – Store Waste Supply Chain Recycling and Landfill Emissions (Waste-Abs)
Year ended 31 March	2013	2014	2015	2016	2017
Total Waste (tonnage)	258.5	264.5	272.7	296.2	325.1
Mixed Dry Recycled (t)	189 (73%)	187 (72%)	170 (63%)	176 (60%)	193 (59%)
General Waste (t)	69 (27%)	74 (28%)	101 (37%)	118 (40%)	130 (41%)
Recycled Mixed Glass (t)	–	1.1	1.4	1.4	1.4
Recycled Board/Paper (t)	–	2.0	–	1.4	0.7
Waste to Landfill (t)	34.6	37.0	38.2	58.9	130.0
Landfill Tax (£)	6,684	7,054	7,054	9,822	12,913
Landfill GHG (tCO2e)*	10.0	10.7	11.0	17.0	37.5

* The landfill gas conversion factor is 0.289.

Note: 2011 Waste was 244 t; mixed dry recycling was 172 t(70.5%); Landfill was 69 t; GHG emission was 10.8 tCO2e

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

4.0 SCOPE 3 – VOLUNTARY SUPPLY CHAIN GHG EMISSION (continued)

Landfill Gas Emissions

Our scope 3, 'supply chain' landfill-gas emissions have increased by 35% since 2011 (10.8 tCO2e benchmark), to our highest landfill emissions of 37.5 tCO2e in 2017.This year ourlandfill Greenhouse gas emissions have increased from17.0 tCO2e (2016)to 37.5 tCO2e (2017). Although these emission levels represent a negligible percentage of our total internal combined Scope 1 and 2 emissions (4,126.9 tCO2e), they will be monitored for future efficiencies.

Scope 3 – Store Waste Supply Chain Costs

Year ended 31 March	2013	2014	2015	2016	2017
Mixed Recycling (£)	27,817	28,195	29,897	29,305	43,925
General Waste (£)	20,051	21,163	29,829	30,537	38,740
Total Waste Cost (£)	47,868	49,358	60,040	60,351	83,227

Store generatedwaste is sorted into four categories of: 'mixed dry recyclablematerials'; 'generalwaste'; 'mixed glass'; 'paper and cardboard'. The cardboard sector includes our contractor DS Smith with mills in Kent, Birmingham and Manchester.

New Store Construction 'Fit-Out' Waste Management Performance (Waste-Abs)

Year ended 31 March	2011	2012	2013	2014	2015	2016	2017
Tonnage	147.5	152.3	12.9	78.9	14.5	13.6	0
Waste Recycled (%)	93.2	96.0	100	95	100	92.8	–
Plasterboard Recycled (%)	100	34.0	–	100	100	100	–

In 2017,therewere no newstore construction 'Fit Out' phases that generated sitewaste. All of our newstores sign up to the CCS and achieve an EPC 'B' rating with LED lighting as standard and roof top solar installations installed where viable.

5.0 STAKEHOLDERS

Big Yellow engages with all of its main stakeholders to provide information and to gain useful feedback from a variety of groups, as described below.

Government Legislation and Standards

EU Energy Efficiency Directive; 'The UK Energy Savings Opportunities Scheme' ("ESOS")

We appointed an accredited ESOS Assessor, who measured all of our energy consumption and determined significant areas of use. ESOS was enforced by the Environment Agency and involved the audit of fourrepresentative stores fromour portfolio.We assessed future potential energy savings from the report, other than the technologies that we had already programmed and invested in. We completed the audits in November 2015, before the December 2015 deadline, and have considered changes to ourfuture budgetforinvesting in viable energy saving technologies as a result.

Investor Communications

The Carbon Disclosure Project ("CDP") 2016

The CDP is a global initiative by investors designed to encourage companies (and their suppliers) to publish information on their carbon emissions and climate change strategies, as a measure of their energy use efficiency.The annual disclosures are in June each year and so we report our 2016 performance in this 2017 CSR Report. The CDP changed its scoring system in 2016 to combine its 'Disclosure' score within the 'Performance' score as recorded in the table below.

The CDP Performance and Number of Investors
Year	2013	2014	2015	2016	2017
Disclosure Score	65/100	67/100	85/100	93/100	–
Performance Score	B	C	B	C	B
Number of Investors	534	655	799	884	884
Annual increase in investors	–	–	10.7%	10.6%	–

We commit annually to respond to the CDP 'Investor' Programme as a benchmark for the 'Financials' and 'Real Estate' sectors. We have a combined 'B' rated score for Disclosure and Performance in 2016, for 'taking coordinated action on climate change issues' and 'implementing current best practice'. Our best performance areas, in descending order, are 'Management', 'Leadership', 'Awareness' and 'Disclosure'.The 'C' Band performance is an average for 'Financials' energy efficiency, reductions and targets. Big Yellow's 'number of investors' increased year on year by approximately 10% in 2014 and 2015, but have remained constantin 2016.

The Global Real Estate Sustainability Benchmark ("GRESB") 'Green Star Status'

GRESB collects information regarding the sustainability performance of property owning companies and funds.This includes information on performance indicators, such as energy efficiency, GHG emission, water and waste reductions. The Survey also covers broader issues such as sustainability risk assessments, performance improvement, and engagement with employees, customers, suppliers and local communities. GRESB rated Big Yellow with a two 'Green Star Status' in 2016. In Europe (and globally) we were scored 79% for 'management and policy' and 48% for 'implementation and measurement'. Our Environmental and Social Governance ("ESG") was ranked 84% against a peer group average of 54%.The benchmark results ranked Big Yellow as in 1st position out of 8 storage companies and 20th out of 25 UK Listed Real Estate Companies,which allows us to identify the areaswherewe can improve, both in absolute terms and relative to our peers. We are able to provide our existing and potential investorswith information regarding our environmental and social governance performance, in the current real estate investment market.

6.0 CSR PROGRAMME FOR THE YEAR ENDING 31 MARCH 2018

Big Yellow will continue to focus on its most significant environmental and financial aspects of its business impact, energy use and carbon emissions. Energy efficiency and lowcarbon supply programmes have been trialled and have been implemented since 2008.Wewillreview and consider further energy reduction strategies within our store operations for carbon and financial savings. For the year ahead our programmes, objectives and targets are highlighted in the table below.

CSR Strategy	Programme	Objectives From 2011 Benchmark
GHG Emission Reduction	Assess new and acquired stores within the portfolio for efficient LED re-lamping internally and externally.	External store lighting programmed for LED re-lamping in the year ending 31 March 2018.
CRC	Review potential tax reduction as tCO2 tax rate increases.	Implement more specific ESOS advice from our surveys.
Increase Solar Energy Generation	Solar installations to increase with new build portfolio growth, acquisitions and existing retro-fit stores.	Solar installation on new build Guildford store and two retro-fit installations on Colchester and Eltham stores.
FTSE4 Good Investor Governance	Provided data on the Big Yellow web site to update research requests on our supply chain, labour standards and the 'Modern Slavery Act'.	Maintain membership within the FTSE4 Good Index series ratings and engaging with researchers.
CDP Communications	Use our annual carbon performance data in the CDP survey 2017 to improve our ratings.	To increase and maintain our high performance and interest from a wider range of investors.
GRESB	Maintain our ranking scores in 'management and policy' and 'implementation and measurement'.	Strengthen and maintain the leading 'Green Star' position in the GRESB upper quadrant.
Health and Safety	Continually maintain and improve high standards of recording and reporting customer, staff, visitor, and contractor incidents.	Invest in continued training and awareness of staff in routine health and safety policy, procedures, management and reporting.
Staff CSR Awareness	Continue raising CSR awareness through area staff presentations and internal communications.	Regular staff meetings and information bulletins on CSR progress and 'Climate Change'.

More details of CSR policies, previous reports and awards can be found on ourinvestorrelationsweb site.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

What we did: our key assurance procedures

Considering the risk of material error, our multi-disciplinary team of CSR assurance specialists planned and performed our work to obtain all the information and explanations we considered necessary to provide sufficient evidence to support our assurance conclusion. Our work was planned to mirror Big Yellow's own group level compilation processes, tracing how data for each indicator within our assurance scope was collected, collated and validated by corporate head office and included in the Report.

Key procedures we carried out included:

> Making inquiries of management to obtain an understanding of the overall governance and internal control environment relevant to management and reporting of the subject matter;
> Understanding, analysing, and testing on a sample basis the key structures, systems, processes, procedures, and controls relating to the aggregation, validation and reporting of the subject matter set out above; and
> Reviewing the content of the 2017 CSR Report against the findings of our work and making recommendations for improvement where necessary.

Big Yellow's responsibilities

The Directors are responsible for the preparation of the Report and for the information and statements contained within it. They are responsible for determining the CSR goals, performance and for establishing and maintaining appropriate performance management and internal control systems from which the reported information is derived.

Deloitte's responsibilities, independence and team competencies

Our responsibility is to independently express a conclusion on the performance data for the year ended 31 March 2017. We performed the engagement in accordance with Deloitte's independence policies, which cover all of the requirements of the International Federation of Accountants Code of Ethics and in some cases are more restrictive.The firm applies the International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We confirm to Big Yellow that we have maintained our independence and objectivity throughout the year, including the fact that there were no events or prohibited services provided which could impair that independence and objectivity in the provision of this engagement.

This report is made solely to Big Yellow in accordance with our engagement letter. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an assurance report and for no other purpose.To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Big Yellow for our work, for this report, or for the conclusions we have formed.

Deloitte LLP London, United Kingdom 22 May 2017

Governance

Directors, Officers and Advisers

Executive Directors

Nicholas Vetch, Executive Chairman, is a co-founder of Big Yellow in September 1998. Prior to that, he was joint Chief Executive of Edge Properties plc, which he co-founded in 1989 which was subsequently listed on the Official List of the London Stock Exchange in 1996 and then sold to Grantchester Properties plc in 1998. He is also a Non-Executive Director of Local Shopping REIT plc, a Trustee of Bedales School and a Trustee of Global Human Rights and Global Human Rights UK.

James Gibson, Chief Executive Officer and co-founder of Big YellowGroup PLC in September 1998. He is a Chartered Accountant by background having trained with Arthur Andersen & Co. where he specialised in the property and construction sectors, before leaving in 1989. He was Finance Director of Heron Property Corporation Limited and then Edge Properties plcwhich he joined in 1994. Edge Propertieswas listed on the Official List ofthe London Stock Exchange in 1996 and then sold to Grantchester Properties plc in 1998. He is also a Non-Executive Director and shareholder of AnyJunk Limited, a Non-Executive Director and shareholder of CityStasher Limited, a Non-Executive Director and investor in Moby Self Storage, a Brazilian Self Storage start-up, and a Trustee of the London Children's Ballet.

Adrian Lee, Operations Director, was previously a Senior Executive at Edge Properties plc, which he joined in 1996. Prior to that he was a corporate financier at Lazard for five years, having previously qualified as a surveyor at Knight Frank. He was appointed to the Board in May 2000.

John Trotman, Chief Financial Officer, is a Chartered Accountant having trainedwith Deloitte LLP,where he specialised in the real estate sector and self storage. On leaving Deloitte in 2005, John worked for a subsidiary of the Kajima Corporation. He joined Big Yellow in June 2007, and was appointed to the Board in September 2007. He is Chairman of the UK Self Storage Association.

Non-Executive Directors

Tim Clark, Non-Executive Director. He was a partner in Slaughter andMay, one of the leading international law firms in the world, for 25 years; initially working as a corporate and M&A adviser to a range of companies and institutions and then for the last seven years as senior partner (before retiring in April 2008). He is the Chair ofWater Aid UK, and a Senior Adviserto G3, and to ChathamHouse. He is also amember ofthe International Chamber of Commerce UK Governing Body, the Advisory Board of Uria Menendez, and the Board of the HighTide Theatre and the Development Committee of the National Gallery. He is Chairman of the trustees of the EconomistTrust and a member of the Audit Committee of theWellcome Trust. He was appointed to the Board in August 2008, is the Senior Independent Director and is Chairman of the Remuneration and Nomination Committees.

Richard Cotton, Non-Executive Director, headed the real estate corporate finance team at JP Morgan Cazenove until April 2009, and subsequent to that was a Managing Director of Forum Partners. Richard is currently the Chairman of Centurion Properties and a Non-Executive Director of Helical Bar plc as well as a Member of the Commercial Development Advisory Group ofTransport for London. Richard joined the Board in July 2012.

Georgina Harvey, Non-Executive Director, started her media career at Express Newspapers plc where she was appointed Advertising Director in 1994. She joined IPCMedia Ltd in 1995 andwent on to form IPC Advertising in 1998,where shewasManaging Director. Shewas a member ofthe Board of IPCMedia from 2000 and was Managing Director of the Regionals division ofTrinity Mirror from 2005 to 2012, overseeing its transition to a digital platform. She is currently a Non-Executive Director of William Hill plc and the Senior Independent Non-Executive Director and Chair of the Remuneration Committee of McColl's Retail Group plc. She joined the Board in July 2013.

Steve Johnson, Non-Executive Director, started his career at Bain in the 1980s before joining Asda in 1993,where he carried out a number ofroles, culminating in Marketing Director. He left Asda in 2000, to join GUS as a Sales & Marketing Director, departing in 2002 to take up his first CEO role at Focus DIY, where he remained until 2007. He joined Woolworths as part of the final turnaround team in late 2008. He has most recently been working as an operating executive for TPG, and was also the Executive Chairman of Dreams plc between July 2011 and October 2012. He is currently Executive Chairman of Poundworld. He joined the Board in September 2010.

Mark Richardson, Non-Executive Director, retired from Deloitte in 2008 after a career there of 29 years, the last 19 as an audit partner specialising in clients in the real estate and construction sectors. Mark is Chairman and trustee of the Natural History Museum Development Trust and a trustee and Chairman of the Audit Committee of WWF-UK. He was appointed to the Board in July 2008 and is chairman of the Audit Committee.

Company Secretary and Registered office

Shauna Beavis 2 The Deans Bridge Road Bagshot Surrey GU19 5AT

Company Registration No. 03625199

Bankers

Lloyds Bank plc HSBC Bank plc Aviva Commercial Finance Limited M&G Investments Limited

Solicitors

CMS Cameron McKenna Nabarro Olswang LLP Lester Aldridge LLP Slaughter and May

Financial advisers and stockbrokers J P Morgan Cazenove

Independent Auditor

Deloitte LLP Chartered Accountant and Statutory Auditors

Valuers

Cushman & Wakefield LLP Jones Lang LaSalle

Directors' Report

The Directors present their annual report on the affairs of the Group, together with the audited financial statements and auditor's report for the year ended 31 March 2017.The Report on Corporate Governance on pages 64 to 67 forms part of this report.

Details of significant events since the balance sheet date are included in note 25 to the financial statements. An indication of likely future developments in the business of the Company is included in the strategic report.

Information about the use of financial instruments by the Company and its subsidiaries is given in note 18 to the financial statements.

Dividends

The Directors are recommending the payment of a final dividend of 14.1 pence per share forthe year(2016: 12.8 pence per ordinary share). An interimdividend of 13.5 pence per share was paid in the year(2016: 12.1 pence per share).

A property income dividend of 24.0 pence is payable for the year, of which 13.5 pence per share was paid with the interim dividend, and 10.5 pence per share was proposed for the final dividend.

Subject to approval by shareholders at the Annual General Meeting to be held on 20 July 2017, the final dividend will be paid on 27 July 2017.The Ex-div date is 22 June 2017 and the Record date is 23 June 2017.

From April 2016 dividend tax credits will be replaced by an annual £5,000 tax-free allowance on dividend income across an individual's entire share portfolio. Above this amount, individualswill pay tax on their dividend income at a rate dependent on theirincome tax bracket and personal circumstances.The Company will continue to provide registered shareholders with a confirmation of the dividends paid by Big Yellow Group PLC and this should be included with any other dividend income received when calculating and reporting total dividend income received. It is the shareholder's responsibility to include all dividend income when calculating any tax liability.This change was announced by the Chancellor, as part of the UK government Budget, in July 2015.

Disclosure of Greenhouse Gas ("GHG") Emissions

Companies Act 2006; Climate Change, the GHG Emissions Director's Reports Regulations 2013

FromOctober 2013, all listed companies are required to report annual quantities of GHG emissions (measured as Carbon Dioxide Equivalent(CO2e)) as follows:

> Scope 1 significant direct emission sources, such as our flexi-office gas heating and air conditioner coolant replacement currently fit out 'gas oil' use emissions and one Company van diesel fuel use emissions are assessed as 'not material';
> Scope 2 significant indirect or offsite power station electricity supply emissions to our stores; and
> Scope 3 Electricity supplier 'transmission and distribution' emissions currently, voluntary GHG emissions, from our waste and water supply chains are assessed as 'not material'.

Summary of Scope 1 and 2 Total Carbon Footprint (GHG carbon equivalent emissions (tCO2e))

Including store electricity, gas, coolant, generator gas oil and van diesel

Year	2012	2013	2014	2015	2016	2017
Total Scope 1 and 2 GHG Emissions (tCO2e)	6,283.6	6,470.0	5,681.8	4,908.0	4,456.2	4,126.9
Scope 3 Electricity Transmission Losses	525	501	445	417	355	147
Kg CO2e / Annual Revenue (£)	0.10	0.09	0.08	0.06	0.04	0.04
Kg CO2e / Customer Occupancy (m2)	26.0	26.5	22.6	17.3	14.6	12.7
Kg CO2e / GIFA m2	11.0	11.1	9.8	7.7	7.2	6.6

Note: Our materiality threshold for carbon emissions is > 1%

Further information on GHG emissions and on other sustainability initiatives at Big Yellow is provided in our Corporate Social Responsibility Report.

Capital structure

Details of the authorised and issued share capital, together with details of the movements in the Company's issued share capital during the year are shown in note 22.The Company has one class of ordinary shares which carry no right to fixed income. Each share carries the right to one vote at general meetings of the Company.

There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Association and prevailing legislation.The Directors are not aware of any agreements between holders ofthe Company's shares that may resultin restrictions on the transfer of securities or on voting rights.

Details of employee share schemes are set out in note 23, and details of shares held by the Company's Employee BenefitTrust are set out in note 22.

No person has any special rights of control over the Company's share capital and all issued shares are fully paid.

With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the Corporate Governance Code, the Companies Acts and related legislation. The Articles themselves may be amended by special resolution of the shareholders. The powers of Directors are described in the Report on Corporate Governance from page 64.

There are a number of agreements that take effect, alter or terminate upon a change of control of the Company such as commercial contracts, bank loan agreements, property lease arrangements and employee share plans. Furthermore, the Directors are not aware of any agreements between the Company and its Directors or employees that provide for compensation for loss of office or employment that occurs because of a takeover bid.

During the year the Company issued 513,580 shares to satisfy the exercise of share options (2016: 732,302).

Directors' Report (continued)

Directors

The Directors of the Company who served throughout the year and to the date of approval of the financial statements were as follows:

Tim Clark	Senior Independent Director
Richard Cotton	Non-Executive Director
James Gibson	Chief Executive Officer
Georgina Harvey	Non-Executive Director
Steve Johnson	Non-Executive Director
Adrian Lee	Operations Director
Mark Richardson	Non-Executive Director
John Trotman	Chief Financial Officer
Nicholas Vetch	Executive Chairman

Biographical details of the Executive and Non-Executive Directors standing for re-election are set out on page 60.

Directors' indemnities

The Company purchases liability insurance covering the Directors and officers of the Company and its subsidiaries.

Political contributions

No political donations were made by the Company in either the current or preceding financial year.

Substantial shareholdings

The Company had been notified, in accordance with Chapter 5 of the Disclosure and Transparency rules, of the following voting rights as a shareholder of the Company at 31 March 2017 and 22 May 2017.

	No. of ordinary shares 31 March 2017	Percentage of voting rights and issued share capital 31 March 2017	No. of ordinary shares 22 May 2017	Percentage of voting rights and issued share capital 22 May 2017
Cohen & Steers Inc	13,659,535	8.7%	12,651,583	8.0%
Blackrock Inc	11,271,724	7.1%	12,785,828	8.1%
Old Mutual Plc	8,983,009	5.7%	8,921,666	5.7%
Ameriprise Financial Inc	6,169,744	3.9%	6,667,121	4.2%
PGGM Investments	5,380,776	3.4%	5,435,069	3.4%
LaSalle Investment Management	5,055,933	3.2%	4,890,538	3.1%
State Street Global Advisors Limited	4,811,518	3.0%	n/a	n/a

State Street Global Advisors Limited holding at 22May 2017was below3%,The interest ofthe Directors in the share capital ofthe Company is shown on page 82 of the Remuneration Report.

Purchase of own shares

The Company was granted authority at the AGM in 2016 to purchase its own shares up to a total aggregate value of 10% of the issued nominal capital. That authority expires at this year's AGM and a resolution will be proposed for its renewal. During the year the Company made no purchases of its own shares.

Employee consultation

The Group seeks to ensure employee commitment to its objectives in a number of ways. Strategic changes are communicated directly to all staff who are encouraged to address queries to the Executive Directors.The Directors' executive meetings are frequently held in stores and in addition Directors and senior management visit the stores on a regular basis. Furthermore, there are regular team briefings at store level to provide employees with information about the performance of and initiatives in their store. A wide range of information is also communicated across the Group's Intranet, including the e-publication of the Group's financial results and all press releases, the publication of a quarterly newsletter, and the publication of a weekly operations bulletin.

Employees are encouraged to participate in the Group's performance through Employee Share Schemes and performance related bonuses. 46% of eligible employees participate in the Group's Sharesave Scheme.

The Group's recruitment policy is committed to promote equality, judging neither by race, nationality, religion, age, gender, disability, sexual orientation, nor political opinion and to treat all stakeholders fairly.

Disabled employees

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled every effortis made to ensure thattheir employmentwith the Group continues and that appropriate training is arranged. Itis the policy oftheGroup thatthe training, career development and promotionof disabled persons should, as far as possible, be identicalto that of other employees.

Human Rights

Big Yellow respects Human Rights and aims to provide assurance to internal and external stakeholders that we are committed to human rights and the principles of the Universal Declaration of Human Rights.

We are committed to creating and maintaining a positive and professional work environment that reflects and respects the basic rights of freedom to lead a dignified life, free from fear or want, and where stakeholders are free to express their independent beliefs. Our employment policies and practices reflect a culture where decisions are made solely on the basis of individual capability and potential in relation to the needs of the business.

Modern Slavery Act

The Group is committed to ensuring that there is no modern slavery or human trafficking in our supply chains or in any part of our business. Our Anti-slavery Policy reflects our commitment to acting ethically and with integrity in all our business relationships and to implementing and enforcing effective systems and controls to ensure slavery and human trafficking is not taking place anywhere in our supply chains. Our policy is published in full on our website.

Auditor

In respect of each Director of the Company, at the date when this report was approved, to the best of their knowledge and belief:

> so far as each Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
> each Director has taken all the steps that he/she might have reasonably been expected to take as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with s418 of the Companies Act 2006.

Approved by the Board of Directors and signed on behalf of the Board

Shauna Beavis

Company Secretary 22 May 2017

Corporate Governance Report

INTRODUCTION

The Company is committed to the principles of corporate governance contained in the UK Corporate Governance Code thatwas issued in 2014 by the Financial Reporting Council ("the Code") for which the Board is accountable to shareholders. The Board also takes account of the corporate governance guidelines of institutional shareholders and their representative bodies.

At Big Yellow, we aim to create a culture in which integrity, openness and fairness are rewarded.

We continue to review the composition of the Board to ensure that it has the appropriate skills, knowledge and balance for the effective stewardship of the Company.There have been no changes to the composition of the Board in the year.

The Board has overall responsibility for the manner in which the Company runs its affairs.

Statement of compliance with the Code

Throughout the year ended 31 March 2017, the Company has been in compliance with the Code provisions set out in section 1 of the 2014 UK Corporate Governance Code.

Statement about applying the principles of the Code

The Company has applied the principles set out in the Code, including both the main principles and the supporting principles, by complying with the Code as reported above. Further explanation of how the principles and supporting principles have been applied is set out below and in the Nominations Committee Report, the Remuneration Report and the Audit Committee Report.

LEADERSHIP

The Board's role is to provide entrepreneurial leadership ofthe Companywithin a framework of prudent and effective controlswhich enables risk to be assessed and managed.

Chairman and Chief Executive

The division of responsibilities between the Chairman and the Chief Executive has been agreed by the Board and encompasses the following parameters:

> the Chairman's role is to provide continuity, experience, governance and strategic advice,while the Chief Executive provides leadership, drives the day-to-day operations of the business and works with the Chairman on overall strategy;
> the Chairman,workingwith the SeniorIndependent Non-Executive Director, is viewed by investors as the ultimate steward ofthe business and the guardian of the interests of all the shareholders;
> the Board believes that the Chairman and the Chief Executive work together to provide effective and complementary stewardship;
> the Chairman:
> takes overall responsibility for the composition and capability of the Board;
> takes overall responsibility for the property development team; and
> consults regularly with the Chief Executive and is available on a flexible basis for providing advice, counsel and support to the Chief Executive.
> the Chief Executive:
> manages the Executive Directors and the Group's day-to-day activities;
> prepares and presents to the Board strategic options for growth in shareholder value;
> sets the operating plans and budgets required to deliver agreed strategy; and
> ensures that the Group has in place appropriate risk management and control mechanisms.

The Directors believe it is essential for the Group to be led and controlled by an effective Board that provides entrepreneurial leadership within a framework of sound controls which enables risk to be assessed and managed.The Board is responsible for setting the Group's strategic aims, its values and standards and ensuring the necessary financial and human resources are in place to achieve its goals. The Board ensures that its obligations to shareholders and other stakeholders are understood and met.The Board also regularly reviews the performance of management.

EFFECTIVENESS

Composition of the Board

The Nominations Committee is responsible for reviewing the Board Composition, and makes recommendations to the Board on the appointment of Directors. There are five independent Non-Executive Directors on the Board, with Tim Clark being the Senior Independent Director. The Company complies with the Combined Code in that at least half ofThe Board is comprised of independent Non-Executive Directors.

All ofthe Non-Executive Directors bring considerable knowledge, judgement and experience to Board deliberations. Non-Executive Directors do not participate in any of the Company's share option or bonus schemes and their service is non-pensionable.The Non-Executive Directors are encouraged to communicate directly with Executive Directors between formal Board meetings. The Non-Executive Directors meet at least once a year without the Executive Directors being present.

The Non-Executive Directors scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. They are required to satisfy themselves on the integrity of the financial information and that financial controls and systems of risk management are robust and defensible.They are responsible for determining appropriate levels ofremuneration for Executive Directors and have a prime role in appointing and,where necessary, removing Executive Directors, and in succession planning.

EFFECTIVENESS (continued)

Composition of the Board (continued)

The tenure of the independent Non-Executive Directors at 31 March 2017 is set out below:

Changes to the Board and its Committees

Mark Richardson has informed the Board of his intention to retire from the Board at the forthcoming Annual GeneralMeeting.The Board is currently recruiting for his replacement as a Non-Executive Director and Audit Committee Chair. It is anticipated that the replacement will be announced before the Company's Annual General Meeting.

Tim Clark is to stand down as the Senior Independent Director with effect from the Annual General Meeting. He will remain as a Non-Executive Director for a further year,to provide continuity in light ofMark Richardson's retirement, afterwhich he has indicated hewill retire from the Board.The Boardwill commence recruitment for Tim's replacement during the forthcoming financial year, with a view to a new independent Non-Executive Director being in place by March 2018. Notwithstanding this, the Board believes thatTim Clark should be considered an independent Non-Executive, even though he has served on the Board for nine years exceeding the Combined Code recommended limit. This was concluded after considering his integrity and the effectiveness with which he carries out his responsibilities to the Company.

Richard Cotton will replace Tim Clark as the Senior Independent Director and also as Chair of the Nominations Committee with effect from the forthcoming Annual GeneralMeeting. GeorginaHarveywillreplace TimClark as Chair ofthe Remuneration Committeewith effectfromthe forthcoming Annual GeneralMeeting.

THE BOARD AND ITS COMMITTEES

Standing committees of the Board

The Board has Audit, Remuneration and Nominations Committees, each of which has written terms of reference.They deal clearly with the authorities and duties of each Committee and are formally reviewed annually. Copies of these terms of reference are available on the Company's website. Each of these Committees is comprised of Independent Non-Executive Directors of the Company who are appointed by the Board on the recommendation of the Nominations Committee.

All ofthe Committees are authorised to obtain legal or other professional advice as necessary;to secure,where appropriate,the attendance of external advisers at its meetings and to seek information required from any employee of the Company in order to perform its duties.

The Chairman of each Committee reports the outcome of the meetings to the Board.The Company Secretary is secretary to each Committee.

Attendance at meetings of the individual Directors at the Board Meetings that they were eligible to attend is shown in the table below:

Director	Position	Number of meetings attended
Tim Clark	Non-Executive Director
Richard Cotton	Non-Executive Director
James Gibson	Chief Executive Officer
Georgina Harvey	Non-Executive Director
Steve Johnson	Non-Executive Director
Adrian Lee	Operations Director
Mark Richardson	Non-Executive Director
John Trotman	Chief Financial Officer
Nicholas Vetch	Executive Chairman

attended

absent

Adrian Lee, Mark Richardson and Steve Johnson each missed one meeting due to unavoidable business commitments.

THE BOARD AND ITS COMMITTEES (continued)

Standing committees of the Board (continued)

The Board meets approximately once every two months to discuss awhole range of significant matters including strategic decisions, major asset acquisitions and performance. A procedure to enable Directors to take independent professional advice if required has been agreed by the Board and formally confirmed by all Directors.

There is a formal schedule ofmatters reserved forthe Board's attention including the approval of Group strategy and policies;major acquisitions and disposals, major capital projects and financing, Group budgets and material contracts entered into otherthan in the normal course of business.The Board also considers matters of non-financial risk as part of its review of the Group's risk register.

At each Board meeting,the latest available financial information is producedwhich consists of detailed management accountswith the relevant comparisons to budget. A current trading appraisal is given by the Executive Directors.

Information and professional development

All Directors are provided with detailed financial information throughout the year. On a weekly basis they receive a detailed occupancy report showing the performance of each of the Group's open stores. Management accounts are circulated to the Executive monthly and a detailed Board pack is distributed a week prior to each Board meeting.

All Directors are kept informed of changes in relevant legislation and changing commercial risks with the assistance of the Company's legal advisers and auditorwhere appropriate.The professional developmentrequirements of Executive Directors are identified and progressed as part of each individual's annual appraisal. All new Directors are provided with a full induction programme on joining the Board.

Non-Executive Directors are encouraged to attend seminars and undertake externaltraining atthe Company's expense in areas they considerto be appropriate fortheir own professional development. Each year,the programme of senior management meetings is tailored to enable meetings to be held atthe Company's properties. During the year, the Executive Directors made visits to all of the Group's stores.

ACCOUNTABILITY

Risk management and internal control

The Group operates a rigorous system of risk management and internal control, which is designed to ensure that the possibility of misstatement or loss is keptto a minimum.There is a comprehensive system in place forfinancialreporting and the Board receives a number ofreports to enable itto carry outthese functions in the most efficient manner. These procedures include the preparation of management accounts, forecast variance analysis and other ad hoc reports.There are clearly defined authority limits throughout the Group, including those matters which are reserved specifically for the Board.

The Board has applied principle C.2 of the UK Corporate Governance Code by establishing a continuous process for identifying, evaluating and managing the significant risks the Group faces and for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives.The Board regularly reviews the process, which has been in place from the start of the year to the date of approval of this report and which is in accordance with revised guidance on internal control published in October 2005 (the Turnbull Guidance).The Board is also responsible forthe Group's systemof internal control and forreviewing its effectiveness. Such a system is designed to manage ratherthan eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.

In compliance with provision C.2.1 of the Code, the Board regularly reviews the effectiveness of the Group's risk management and internal control systems. The Board's monitoring covers all controls, including financial, operational and compliance controls and risk management. Itis based principally on reviewing reports from management to consider whether significant risks are identified, evaluated, managed and controlled and whether any significant weaknesses are promptly remedied and indicate a need for more extensive monitoring.The Board has also performed a specific assessmentforthe purpose ofthis annual report.This assessment considers all significant aspects of risk management and internal control arising during the period covered by the report, including the work carried out by the Group's Store Compliance team.The Audit Committee assists the Board in discharging its review responsibilities.

A formalrisk identification and assessment exercise has been carried outresulting in a risk framework document summarising the key risks, potential impact and the mitigating factors or controls in place.The Board have a stated policy of reviewing this risk framework at least once a year or in the event of a material change.The risk identification process also considered significant non-financial risks.

During the reviews, the Directors:

> challenged the framework to ensure that the list of significant risks to business objectives is still valid and complete;
> considered new and emerging risks to business objectives and included them in the framework if significant;
> ensured that any changes in the impact or likelihood of the risks are reflected in the risk framework; and
> ensured that there are appropriate action plans in place to address unacceptable risks.

The results of the exercise have been communicated to the Board and the Audit Committee.This was in the form of a summary report which included:

> a prioritised summary of the key risks and their significance;
> any changes in the list of significant risks or their impact and likelihood since the last assessment;
> new or emerging risks that may become significant to business objectives in the future;
> progress on action plans to address significant risks; and
> any actual or potential control failures or weaknesses during the period (including "near misses").

ACCOUNTABILITY (continued)

Risk management and internal control (continued)

During the course of its review of the risk management and internal control systems, the Board has not identified, nor been advised of any failings or weaknesses which it has determined to be significant, consistent with the prior year.Therefore, a confirmation in respect of necessary actions has not been considered appropriate.

GOING CONCERN

The Group's activities, and a fair review of the business, are included in the Strategic Report on pages 16 to 30.The financial position of the Group, including its cash flow, liquidity, and committed debt facilities are discussed in the Financial Review on pages 31 to 39.

The Directors have a reasonable expectation that the Group and Company have adequate resources to continue operations for the foreseeable future. They have therefore continued to adopt the going concern basis in preparing the financial statements.

SHAREHOLDER RELATIONS

The Board aims to achieve clearreporting of financial performance to all shareholders and acknowledges the importance of an open dialogue by both Executive and Non-Executive Directors with its institutional shareholders.The Board believes that the Annual Report and Accounts play an important part in presenting all shareholders with an assessment of the Group's position and prospects.

The Company has an active dialogue with its shareholders through a programme of investor meetings which include formal presentation of the full and half year results.The Executive Directors have participated in investor conferences and meetings during the year throughout the United Kingdom, and also in the United States, South Africa and the Netherlands. During the year ended 31 March 2017, the Chief Executive and other Executive Directors carried out 237 meetings with UK and overseas institutional shareholders and potential investors.These meetings comprised group and individual presentations and tours of our stores.

The Board also welcomes the interest of private investors and believes that, in addition to the Annual Report and the Company's website, the Annual General Meeting is an ideal forum at which to communicate with investors and the Board encourages their participation. At each Board Meeting, the Board is updated on any shareholding meetings that have taken place, and any views expressed or issues raised by the shareholders in these meetings.

Any queries raised by a shareholder, either verbally or in writing, are answered immediately by whoever is best placed on the Board to do so. Directors are introduced to shareholders at the AGM, including the identification of Non-Executive Directors and Committee Chairmen. The number of proxy votes cast in the resolution is announced at the AGM.

Report of the Nominations Committee

Introduction

The Committee is responsible for reviewing the Composition of the Board. It also makes recommendations for membership of the Board and considers succession planning for Directors.The Committee is also responsible for evaluating Board and Committee performance.

Committee members and attendance

Member	Position	Number of meetings attended
Tim Clark	Chairman and Senior Independent Director
Richard Cotton	Member
Georgina Harvey	Member
Steve Johnson	Member
Mark Richardson	Member

attended

absent

Steve Johnson missed one meeting due to an unavoidable business commitment.

Richard Cotton will replace Tim Clark as the Senior Independent Director and the Chairman of the Nominations Committee with effect from the Company's 2017 AGM.

The Nominations Committee is responsible for reviewing the structure, size and composition ofthe Board and giving consideration to succession planning for Directors and other senior Executives.Where changes are required, itis also responsible forthe identification, selection and proposalto the Board for approval of persons suitable for appointment orreappointmentto the Board,whether as Executive orNon-Executive Directors and to seek approvalfromthe Remuneration Committee to the remuneration and terms and conditions of service of any proposed Executive Director appointment.The Chairman ofthe Committee reports to the Board as appropriate to enable the Board as awhole to agree the appointments of newDirectors.The Committeemeets atleast once a year and otherwise as required and as determined by its members.

The terms and conditions of appointmentforthe Non-Executive Directors is available forinspection atthe Company's Head Office during normalworking hours. They are also available for inspection at the Company's AGM.

Board performance evaluation

During the year the Board engaged Lomond Consulting to undertake an evaluation of the performance of the Board and its Committees.The aim was to seek to identify areas where the performance and the procedures of the Board may be improved.The scope of the review was agreed between the Chairman of the Committee and the Chief Executive.

Each Director completed a questionnaire on the performance of the Board, its Committees and the Chairman. Each Director was then interviewed in person by Lomond Consulting.The responses were anonymous to enable an open and honest sharing of views. Lomond Consulting then produced a report showing the results of the review.

The key topic discussed as part of the review was succession planning, which is further discussed in the section below, albeit the Committee considered no further action was necessary.

During the current year, the Executive Chairman evaluated the performance of the other Executive Directors, and the performance of the Chairman was evaluated by the Senior Independent Non-Executive Director. It was considered that the individuals, the Committees and the Board as a whole were operating effectively, with appropriate procedures put in place for minor areas identified for improvement.

Succession planning

The Board comprises a team of four Executive Directors,two ofwhom were co-founders ofthe Company, complemented by Non-Executive Directorswho have wide business experience and skills as well as a detailed understanding of the Group's philosophy and strategy. Continuity of experience and knowledge, particularly of self storage, within the executive team is particularly important in a focussed long-term business such as Big Yellow.

It is a key responsibility of the Committee to advise the Board on succession planning. The Committee ensures that any future changes in the Board's composition are foreseen and effectivelymanaged. In the event of unforeseen changes,the Committee ensures thatmanagement and oversight ofthe Group's business and long-term strategy will not be affected.

The Committee also addresses the development and continuity of the Senior Management team below Board level.

Policy on diversity

All aspects of diversity, including gender are considered at every level of recruitment. All appointments to the Board are made on merit. The Board's policy states thatthe Board seeks a compositionwith the right balance of skills and diversity tomeetthe demands ofthe business.The Board considers itis important to increase the representation of women on the Board, and intends to increase the proportion of women on the Board in the medium term, but does not consider that quotas are appropriate and has therefore chosen not to set targets.That said, the Board will look to recruit a female Non-Executive Director to replace Tim Clark when he retires from the Board next year.

Gender diversity of the Board and Company is set out below (senior management are defined to be Heads of Department):

	Male	Female	Total
Board	8	1	9
Senior Management	6	5	11
All employees	211	150	361

Directors standing for re-election

All of the Directors will retire in accordance with the UK Corporate Governance Code and, with the exception of Mark Richardson, will offer themselves for re-election at the Annual General Meeting.

Following a performance appraisal process, the Board has concluded that the Directors retiring by rotation are effective, committed to their roles and operate as effective members of the Board.

The Board, on the advice of the Committee, therefore recommends the re-election of each Director standing for re-election. Full biographical details of each Director are available on page 60.

Tim Clark

Nominations Committee Chairman

Remuneration Report

Year ended 31 March 2017

INTRODUCTION

This report describes the activities of the Remuneration Committee for the period from 1 April 2016 to 31 March 2017. It sets out a summary of the Directors' Remuneration Policy ("the Remuneration Policy"), which was approved by shareholders in July 2015, and remuneration details for the Executive and Non-Executive Directors ofthe Company. It has been prepared in accordancewith Schedule 8 ofthe Large andMedium-size Companies and Groups (Accounts and Report) Regulations 2013 (the "Regulations").

The report is divided into three main areas:

> the annual statement by the Remuneration Committee Chairman;
> the summary of the approved Remuneration Policy; and
> the annual report on Directors' remuneration.

The Companies Act 2006 requires the auditor to report to the shareholders on certain parts of the Remuneration Report and to state whether, in their opinion, those parts of the report have been properly prepared in accordance with the Regulations. The parts of the annual report on Directors' remuneration which are subjectto audit are indicated in the report.The annual statement by the Remuneration Committee Chairman and the summary ofthe approved Remuneration Policy are not subject to audit.

ANNUAL STATEMENT BY THE REMUNERATION COMMITTEE CHAIRMAN

Dear Shareholder,

I amvery pleased to presentthe Directors' Remuneration Reportforthe year ended 31March 2017.This report has been prepared by the Remuneration Committee and approved by the Board.

Business conditions and Group performance in the year ended 31 March 2017

The business conditions and performance of the Group in the year ended 31 March 2017 are described more fully in the Chairman's Statement and the Operating and Financial Review of this Annual Report. In summary:

> the business of the Group performed strongly;
> in an improving economic environment, Big Yellow remained the clear UK brand leader in self storage and delivered occupancy, cash flow and earnings growth for the eighth year in a row;
> revenue, cash flow and adjusted profit before tax increased by 8%, 10% and 11% respectively;
> like-for-like occupancy was increased by 2.8 ppts;
> the capital structure remains robust with interest cover of 6.2 times; and
> dividends are being increased by 11%.

Policy on executive remuneration

The Committee is keenly aware of the sensitivity of the public, shareholders and the government regarding executive remuneration currently. The Committee is alsomindful ofthe concerns beings raised by these parties around the effectiveness ofremuneration structures and the alignment of remuneration with shareholder interests and business outcomes. The Committee continues to closely monitor the latest developments in the executive remuneration space to ensure that our remuneration policy and its operation continues to remain fit-for-purpose for the Company.

The policy ofthe Company is to ensure thatthe executive remuneration packages are designed to attract,motivate and retain Directors of high calibre and reward the Executive Directors for protecting and enhancing value for shareholders.The Policy aims to provide:

> remuneration to the Directors which is fair to the Directors both generally and in the context of the remuneration of other staff of the Company and the returns to shareholders; and
> a balance of short and long termincentiveswhich provide a strong link between reward of individual and Group performance to align the interests of the Executive Directors with the interests of shareholders.

The Committee believes that the success of the remuneration policy is reflected in the length of service, stability and strong performance of the Executive Directorteam.Two ofthe Executive Directorswere founders ofthe Companywhile the othertwo have been Executive Directors for 18 years and ten years respectively.The Executive Directors have significantinterests in the shares ofthe Company, each in excess oftwo times base salary, which is the Company's shareholding guideline for Executive Directors. The Executive Directors are interested in shares comprising approximately 9% of the share capital of the Company (including unvested share incentives held).

The Committee does not intend to make any revisions at the 2017 AGM to the Policy approved in 2015.The Committee will be putting a new policy to a shareholder vote at the AGM in 2018 (as the current policy expires at that time).

A summary of the approved Policy is provided in the Directors' Remuneration Policy section of the Directors' Remuneration Report and the full Policy is available online (http://corporate.bigyellow.co.uk/investors).

Remuneration changes during the year

All of the changes in remuneration in the year ended 31 March 2017 were within the Policy. In summary, the changes related to an increase in base salary of 2%, in line with the Group's staff.

Within the aggregate figure for Executive Director remuneration, the changes during the year were:

> Base salary: increased by £20,000 (2%) in line with increases provided to staff
> Taxable benefits: increased by £4,000 (25%)
> Annual bonus: was 10% of salary for the year in line with the average for all staff of the Company (compared to 12% in the prior year) a reduction of £18,000 (15%).
> Pension contributions: remained at 15% of base salary, and therefore increased in line with the increase in base salaries by 2% (£3,000).
> Sharesave Scheme: there were no gains from Sharesave schemes in the year (2016: one Director's Sharesave Scheme vested producing a gain of £14,000 in total)
> Long term incentives:
> the 2013 award of shares granted under the LTIP vested at 100% (representing a total gain for all of the Executive Directors of £1,566,000). As in the previous year, each ofthe Executive Directorswas granted an award equalto 100% of base salary subjectto performance conditions. The value of these awards was £1,004,000 – an increase of £20,000 (2% in line with the increase in base salary); and
> no awards were made under the Long Term Bonus Performance Plan ("LTBPP") in the year (2016: total awards of £4.43 million were made to the four Executive Directors).The Remuneration Committee reviewed the performance targets for the year and concluded that, based on the relative achievement ofthose targets,the awards underthe Plan have provisionally vested at 90% in respect ofthe year ended 31March 2017.The provisional vesting forthe year ended 31March 2016was 90%.There is a further year's performance onwhich the LTBPP is assessed and a final assessment of the whole three year period toMarch 2017 is then made.This final assessment will determine the extent to which the awards vest.
> Salaries for the Executive Directors for the year ending 31 March 2018 have been increased by 2%, in line with the increase applied to all Group staff.There are no other changes to the remuneration structure for the year ending 31 March 2018.

In considering the relative importance of the spend on pay (see page 84):

> Total employee pay: increased by 3%,(and amounted to £15.6 million)
> Profit distributed by way of dividend: increased by 13% (and amounted to £41.2 million)
> Retained profit for the year: reduced by 23% (and amounted to £58.4 million)

As part of the remuneration package for our employees, we operate an Employee Share Save Scheme ("SAYE") which allows any employee who has more than sixmonths' service to save annually up to £6,000, over a three year savings contractwith the ability underthe scheme to purchase shares at a 20% discountto the average quotedmarket price ofthe Group shares atthe date of grant ofthe SAYE option. In addition, our annual bonus scheme provides an opportunity for all our employees to earn a bonus based on the performance of the store they are based in against their store KPIs and targets for the year.

More details of the remuneration of the Directors in the year ended 31 March 2017 are set out in the Annual Report on Remuneration section of the Remuneration Report.

AGM

I hope that, atthe Annual GeneralMeeting in July, youwill supportthe advisory resolution on the remuneration paid to the Directors in the lastfinancial year set out in the Annual Remuneration Report section of this Remuneration Report.

Tim Clark

Chairman of the Remuneration Committee

Remuneration Report (continued)

Year ended 31 March 2017

REPORT ON DIRECTORS' REMUNERATION POLICY

This section of the Remuneration Report contains a summary of the Company's Directors' Remuneration Policy ("the Policy") which governs the Company's approach to remuneration.The Policy was approved by shareholders at the Company's AGM in July 2015 and is applicable for a period of three years, unless shareholder approval is sought within that period to amend the Policy.

Itis the policy ofthe Company to ensure thatthe executive remuneration packages are designed to attract, motivate and retain Directors of a high calibre and reward the executives for enhancing value to shareholders.

The Committee deals with all aspects of remuneration of the Executive Directors, including:

> setting salaries;
> agreeing conditions and coverage of annual incentive schemes and long term incentives;
> policy for and scope of pension arrangements;
> determining targets for performance-related schemes;
> scope and content of service contracts; and
> deciding the extent of compensation (if any) on termination of service contracts.

The Committee's members are currently Tim Clark (Committee Chairman), Richard Cotton, Georgina Harvey, Steve Johnson and Mark Richardson. Georgina Harvey will replace Tim Clark as Chairman of the Committee at the 2017 AGM.

The Remuneration Committee's Terms of Reference are available on the Company website.The Committee met three times during the year.

Summary of the Directors' Remuneration Policy ("the Policy")

The main components of the Policy and how they are linked to, and support, the Company's business strategy are summarised below.

The full policywhichwas approved by shareholders in July 2015 is available on the Company'swebsite atwww.corporate.bigyellow.co.uk/investors.aspx.This includes details of the policy regarding target-setting; remuneration arrangements for new appointments; payments for loss of office and other matters.

Element	Operation of element
Salary, Benefits and Pension	Salaries are reviewed annually and typically set on 1 April after considering the salary levels in companies of a similar size and complexity in the FTSE 250.
To provide a level of fixed compensation	When considering any increases to base salaries in the normal course (as opposed to a change in role or responsibility), the Committee will take into consideration:
that can attract and retain talent required to successfully deliver on our business strategy.	> level of skill, experience, scope of responsibilities and performance; > business performance, economic climate and market conditions; > increases provided to Executive Directors in comparable companies; > pay and employment conditions of employees throughout the Group, including increases provided to staff; and > inflation.
	Our overall policy is normally to target salaries at close to (but generally below) median levels.
	Base salaries are intended to increase in line with inflation and general employee increases in salary; higher increases may be applicable if there is a change in role, level of responsibility or experience or if the individual is new to the role.
	The level of benefits provided is reviewed annually to ensure they remain market competitive. Benefits currently include: private fuel, private medical insurance, permanent health insurance and life assurance.
	The maximum contribution to an Executive Director's pension or salary supplement is 20% of gross basic salary. Executive Directors currently receive a contribution of 15% of salary.
Annual bonus	Maximum opportunity of 25% of salary with 10% of salary payable at target and 0% payable at threshold.
To provide cash awards which aligns reward to key Group strategic objectives and drives short term performance.	Awards are directly aligned to the level of staff bonus and therefore linked to store performance, which is measured based on occupancy growth and net contribution, customer satisfaction and store standards.
Long Term Incentive Plan ("LTIP")	LTIP maximum grant is 100% of salary per annum with grants normally made at the maximum. Awards (granted from 2015 onwards) will vest at the end of a three year performance period subject to:
To align Executive Directors' interests	> EPS (70% of award) which provides a link to earnings growth and value creation in the Company; and > Relative TSR (30% of award) which provides a link to delivering returns in excess of companies in the FTSE Real Estate Index.
with those of shareholders and rewards value creation.	The LTIP contains clawback and malus provisions.

Summary of the Directors' Remuneration Policy ("the Policy")(continued)

Element	Operation of element
Long Term Bonus Performance Plan	The total maximum incentive value awarded across all four Executive Directors will not exceed 4 x 450% of base salary (over a three year performance period); however each individual will have the potential to be awarded a maximum of 675% of base salary (so long as the total maximum is not exceeded).
To ensure that the total remuneration package is more	Vesting depends on an assessment of performance (over three years but reviewed annually) against a series of financial and non-financial targets aligned with the annual business plan.
competitive, supports the Company's strategy	The value accrued to participants may be subject to clawback if subsequent performance reflects adversely on achievement of the targets.The LTBPP also contains malus provisions.
and its ability to react to changing	A further holding period will apply to 50% of the award, such that 25% will be released one year after vesting and the remaining 25% will be released two years after vesting, so that the full release of vested entitlements takes place over five years.
economic and business circumstances.	Within the constraints of business confidentiality, performance measures for each year are disclosed in the corresponding Annual Report on Remuneration – the information for this year can be found on pages 78 and 79.
Sharesave Scheme	This HMRC approved scheme allows employees to align their interests with those of investors and also to share in the long-term
To encourage share ownership by all employees.	success of the Company.The annual allowance for investing in the Sharesave scheme is £6,000.
Shareholding	Each Executive Director is required to build and maintain a holding of at least two times base salary in shares of the Company,
Ensures that Executive Directors' interests are aligned with shareholders' over a longer time period.	through retaining at least 50% of shares vesting in share plans if this guideline has not been met.
Non-Executive Director Fees	Fee levels are normally reviewed annually in March and are set at broadly median levels for comparable roles at companies of a similar size and complexity within the FTSE250.
Provides a level	Fees are intended to rise in line with inflation.
of fees to support recruitment and retention of Non Executive Directors with the necessary experience to advise and assist with establishing and monitoring the Group's strategic objectives.	The fees may be paid in the form of shares.

Remuneration Report (continued)

Year ended 31 March 2017

Illustrations of application of the Policy

The graph below seeks to demonstrate how pay varies with performance for the Executive Directors based on the Policy approved by shareholders. This is based on pay for the year ending 31 March 2018.

Element	Description
Fixed	Total amount of salary, pension and benefits.
Annual variable	Money or other assets received or receivable for the reporting period as a result of the achievement of performance conditions that relate to that period (i.e. annual bonus payments).
Multiple period variable	Money or other assets received or receivable for multiple reporting periods as a result of the achievement of performance conditions over a given period under the LTIP and LTBPP. For the purposes of these charts, the LTBPP is represented by one-third of the potential vesting as it is granted once every three years.This provides a better comparison from year to year and against other companies.

Assumptions used in determining the level of pay out under given scenarios are as follows:

Element	Description
Minimum	Fixed pay only (no variable payments under annual bonus and Company's LTIP or LTBPP).
On-target	40% of annual bonus award being paid (i.e. 10% of basic salary), 50% vesting of the LTIP and 50% vesting of the annualised value of the three year LTBPP.
Maximum	100% of annual bonus award being paid (i.e. 25% of basic salary) and 100% vesting of the LTIP, one-third of 100% vesting of the three year LTBPP.

Executive Chairman	CEO

























	CFO


Operations Director

ANNUAL REPORT ON REMUNERATION

This section of the Remuneration Report contains details of how the Directors' Remuneration Policy ("the Remuneration Policy") was implemented during the year ended 31 March 2017.The individual sections of this report which are required by the Regulators to be subject to audit are:

> Single figure table and notes;
> Scheme interests awarded during the financial year;
> Payments to past Directors;
> Payments for loss of office; and
> Statement of Directors' shareholding and share interests.

Single total figure of remuneration

The table below sets out the single total figure of remuneration and breakdown for each Executive Director paid in the year ended 31 March 2017.The figures have been calculated in accordance with the remuneration disclosure regulations.

		Salary		Taxable benefits1		Annual bonus		Long term incentives		Pensions2		Sharesave Scheme		Total
		£		£		£		£		£		£		£
Year ended
31 March 2017	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016
Nicholas Vetch	269,800	264,500	5,313	4,081	26,980	31,740	433,011	548,680	40,470	39,675	–	–	775,574	888,676
James Gibson	296,000	290,100	5,713	4,681	29,600	34,812	474,914	601,738	44,400	43,515	–	13,965	850,627	988,811
Adrian Lee	219,300	215,000	4,806	4,041	21,930	25,800	329,102	404,353	32,895	32,250	–	–	608,033	681,444
John Trotman	219,300	215,000	2,061	2,227	21,930	25,800	329,102	404,353	32,895	32,250	–	–	605,288	679,630
Total	1,004,400	984,600	17,893	15,030	100,440			118,152 1,566,129 1,959,124	150,660	147,690	–		13,965 2,839,522 3,238,561

(1) Taxable benefits comprise medical cover, permanent health insurance, life insurance and private fuel usage.

(2) Nicholas Vetch and James Gibson receive a cash supplement in lieu of their full pension contributions. Adrian Lee and John Trotman receive cash supplements in lieu of pension contributions above £10,000.

The value shown in long term incentives in the current year is the LTIP award granted in 2013 which vested on 22 July 2016 to 100% of its maximum value and is valued using the share price on that date of 718.5p.The award granted for 2017 is 100% of salary for each Executive Director.

The average salary increase across the Group in the year was 2%; this increase was also applied to the Executive Directors for the year.

The value shown forthe Sharesave Scheme in the prior yearis the value ofthe shares under option at vesting less each Director's contributions to the scheme.

Annual Bonus Plan awards

The policy of the Company is that the bonus paid to the Executive Directors is the same as the average of the bonus awards (as a % of salary) paid to all the Group's stores on achieving theirtargets during the course ofthe year. Itis an important part ofthe Group's culture thatthe Executive team are rewarded with the same level of annual bonus as the average for all staff.

In respect ofthe year underreview,the Executive Directors' performancewas carefully reviewed by the Committee, in consultationwith the Executive Chairman in respect of the other Executive Directors, and it was determined that the performance in the year by the Executive Directors results in a bonus of 10% of salary in line with the average bonus as a percentage of salary paid across the stores.

Overview of the staff bonus scheme

The staff bonus scheme is designed, on a quarterly basis, to reward each store with a bonus of up to 25% of their quarterly salary, made up of the following four key elements set out below:

Occupancy performance against target

Each store is set a quarterly target for occupancy growth.The weighting of the contribution of these metrics to the bonus varies based on store occupancy, with higher occupied stores having a lower weighting towards their performance against their occupancy target.

The bonus awarded to each store increases as the store moves further ahead of target. No bonus is awarded if the store fails to meet its target.The individual store targets have not been disclosed as itwould be impractical and commercially sensitive to disclose the targets for every one of our 73 stores in this report.

However following feedback received from our shareholders on last year's report to increase the disclosure around the annual bonus, we have shown the average annual distribution of performance against target for each of the bonus measures across our stores and the corresponding average pay-out as a percentage of salary which directly corresponds to the bonus percentage pay-out for the Executive Directors.

Remuneration Report (continued)

Year ended 31 March 2017

Annual Bonus Plan awards (continued)

The average performance against the four key targets and the associated reward for the stores were as follows:

1. Occupancy

Performance against target	Below target	0 to 10% ahead of target	10 to 20% ahead of target	20 to 30% ahead of target	30 to 40% ahead of target	> 40% ahead of target	Total
No of stores	39	2	3	3	3	23	73
Average bonus paid	0%	0.7%	2.0%	4.5%	5.9%	8.7%	3.1%

Additionally, eight storeswere awarded bonuses for averaging 85% occupancy and above earning a totalweighted average bonus of 0.2%.Theweighted average bonus paid to stores for performance against occupancy targets is therefore 3.3% of salary for the year.

2. Profitability

Each store is set a quarterly target for profitability. The weighting of the contribution of these metrics to the bonus varies based on store occupancy, with higher occupied stores having a higher weighting towards their performance against their profitability target.

The bonus awarded to each store increases as the storemoves further ahead oftarget. No bonus is awarded ifthe store fails tomeetits target.The performance distribution of the store's performance against their individual targets are provided below.

Performance against target	Below target	0 to 1% ahead of target	1 to 2% ahead of target	2 to 3% ahead of target	>3% ahead of target	Total
No of stores	37	14	11	7	4	73
Average bonus paid	0%	3.3%	4.2%	9.2%	9.7%	2.7%

The weighted average bonus paid to stores for performance against profitability targets is therefore 2.7% of salary for the year.

3. Store audits

Stores receive a bonus if they receive an audit score of in excess of 85% based on visits carried out by the Group's store compliance team. There were 31 instances of stores receiving an audit score of 85% and above across the year, leading to a weighted average bonus paid to the stores of 0.7% of salary.

4. Customer satisfaction

Stores are rewarded based on two elements of customer satisfaction, net promoter scores and individual customer service awards.The awards based on net promoter scores are summarised in the table below.

NPS score	<65	65 to 75	75 to 80	>80	Total
No of stores	9	20	15	29	73
Average bonus paid	0%	1.3%	2.3%	2.9%	1.9%

The weighted average bonus paid to stores for performance against net promoter scores is therefore 1.9% of salary for the year.

The bonus paid to stores forindividual customer service awards amounted to a further 1.4% of salary,which, combinedwith the net promoter score, amounted to a weighted average bonus paid to the stores for Customer satisfaction of 3.3% of salary.

Summary

The bonus received by the stores against their targets in the year is summarised as follows.

Category	Actual % weighting for category	Average % of salary bonus paid across stores
1. Occupancy	33%	3.3%
2. Profitability	27%	2.7%
3. Store audits	7%	0.7%
4. Customer satisfaction	33%	3.3%
Total	100%	10%

Annual Bonus Plan awards (continued)

In line with the Remuneration Policy an award at this level has therefore also been paid to the Executive Directors for the year.

The performance in the year resulted in a bonus of 10% of salary, which equated to the following payments for the Executive Directors:

> Nicholas Vetch £26,980
> James Gibson £29,600
> Adrian Lee £21,930
> John Trotman £21,930

Long Term Incentive Plan ("LTIP") awards

The awards granted under the LTIP are subject to performance conditions to be met over a performance period of three years. There is no retesting of performance conditions and, if they are not satisfied, the awards will lapse.

The performance conditions applicable to the LTIP which vested in the year, which relate to EPS and TSR, are set out below.

Vesting is conditional on the achievement of EPS growth of an average of 3% above RPI per annum. This hurdle was met for the 2013 awards, with average annual growth in EPS of 20%, compared to RPI plus 3% of 6% per annum.

The Committee assessed the extent to which the TSR performance condition has been satisfied for the 2013 award which vested in 2016, with the following results:

Condition	Weighting	Threshold performance required	Maximum performance required	LTIP value for meeting threshold and maximum performance (% salary)	Performance achieved	Vesting %
Relative TSR	100%	Median of comparator group of real estate companies	Upper quartile of the comparator group	25% – 100%	4 out of 34 in comparator group of companies in the FTSE Real Estate Index	100%
Total	100%					100%

The full vesting of the 2013 LTIP award in 2016, equated to the following value for the Executive Directors based on the share price at the date of vesting:

> Nicholas Vetch £433,011 (60,266 shares)
> James Gibson £474,914 (66,098 shares)
> Adrian Lee £329,102 (45,804 shares)
> John Trotman £329,102 (45,804 shares)

LTIP awards granted in year ended 31 March 2017

The table below sets out the details of the long term incentive awards granted in the year ended 31 March 2017 where vesting will be determined according to the achievement of performance conditions that will be tested in future reporting periods.

Director	Award type	Awards as a % of salary	Face value of award(1)	Percentage of award vesting at threshold performance	Maximum percentage of face value that could vest	Performance period end date	Performance conditions
Nicholas Vetch			£269,800
James Gibson	Annual cycle of awards over nil cost options		£296,000				Adjusted EPS
Adrian Lee		100% of salary	£219,300	25%	100%	22 July 2019	growth and relative TSR
John Trotman			£219,300

(1) The face value of the award is calculated using the average share price three days prior to the grant date of 22 July 2016 (average share price of 721 pence).

Remuneration Report (continued)

Year ended 31 March 2017

LTIP awards granted in year ended 31 March 2017 (continued)

The performance conditions applicable to the awards granted in the year ended 31 March 2017 are set out below:

Condition	Weighting	Threshold performance required	Maximum performance required	LTIP value for meeting threshold and maximum performance (% salary)	Basis for measurement
Relative TSR	30%	Median of comparator group of real estate companies	Upper quartile of the comparator group	25% to 100%	The average of the Group's closing mid market share price over the three months preceding the start of the performance period and preceding the end of the performance period will be used, including dividends re-invested.
Adjusted EPS	70%	Adjusted EPS growth of RPI+3% per annum	Adjusted EPS growth of RPI+8% per annum	25% to 100%	The adjusted EPS figure reported in the audited results ofthe Group forthe last complete financial year ending before the start ofthe performance period and the last complete financial year ending before the end ofthe performance periodwill be used.
Total	100%

Between threshold and maximum performance, vesting will take place on a straight-line basis.

Long Term Bonus Performance Plan

No awards were granted under the LTBPP during the year.

The following awards were made during the prior year(year ended 31 March 2016) under the LTBPP:

Director	Award type	Awards as a % of salary at the time of grant	Face value of award	Percentage of award vesting at threshold performance	Maximum percentage of face value that could vest	Performance period end date	Performance conditions
Nicholas Vetch	Granted every three years,	377%	£996,900				Assessed
James Gibson award converts to nil cost Adrian Lee		496%	£1,440,000		100%	31 March 2018	annually on
		464%	£996,900	0%			a basket of
John Trotman	options on vesting.	464%	£996,900				measures

The performance targets for the LTBPP are not disclosed for the year ahead, given the commercially sensitive nature of a number of the targets (which are derived from the Group's business plan). Shortly after the end of each year, the Committee assesses the key targets and the extent to which management has been able to meet these targets for that year and reports on this assessment (excluding any that are still commercially sensitive).The targets are only adjusted during the year if material events occur that necessitate a change to the business plan.The report on the targets for the year ended 31 March 2017 (other than those which remain commercially sensitive)is summarised in the table below:

Objective	Committee Comment
Grow the Group's annual free cash flow by £5 million (pre working capital movements)for the year to 31 March 2017 compared to the year to 31 March 2016.	The Group's free cash flow for the year to 31 March 2017 was £58.3 million, an increase of £5.0 million from the prior year.
Comply with all banking covenants and maintain a net worth in excess of £750 million.	All banking covenants were complied with during the year. Net worth has grown by £61 million to £890.4 million.
Grow the occupancy of the like-for-like stores open at 31 March 2016 from 75.3% to 77.8% by 30 September 2016, and following the seasonal occupancy loss in the third quarter, recover to this level by 31 March 2017.	The occupancy of these stores at 30 September 2016 was 78.5%. At the end of March 2017, the like-for-like occupancy was 78.1%.
Grow the average net rent per square foot across the stores from £25.90 per square foot by 2.5% to £26.55 by 31 March 2017.	The closing net rent per sq ft at 31 March 2017 was £26.03, an increase of 0.5%. Management's focus remains on driving occupancy performance across the stores.
Meet budgeted revenue (£109.3 million) and profit before tax (£54.5 million)targets.	Revenue for the full year was £109.1 million, and adjusted PBT was £54.6 million, slightly behind and slightly ahead of budget respectively.

Long Term Bonus Performance Plan (continued)

Objective	Committee Comment
Maintain the Group's online market share measured against the top 35 self storage operators by Connexity Hitwise, at 35% to 38%.	The Group's average market share ranged between 31% and 38% over the course of the financial year.The nearest competitor had a market share of 16% to 21% for the year.
Reviewpotential sites (in London and key targettowns outside of London) for store acquisitionwith a viewof acquiring atleast one newsite in the year.	The Group has continued to investigate opportunities for land acquisitions in London and a number of key towns outside.
	In May 2017 the Group exchanged contracts to acquire a site in Wapping, East London – a key target location.
	The Group continues to monitor other opportunities.
Complete the acquisition ofthe Lock and Leave portfolio into Big Yellowand Armadillo.	The Lock and Leave portfolio acquisition completed in April 2016, in line with the original timetable.
Submit a planning application for the development at Camberwell by the end of the financial year.	The planning application for Camberwell was submitted in November 2016. The applicationwas rejected in February 2017, and the Group has subsequently submitted an appeal.
Obtain planning consent for the extension of the Wandsworth store.	Planning consent was obtained for the Wandsworth extension in December 2016. Construction has commenced on the extension with the work due to complete in April 2018.
Obtain revised planning consent for Guildford Central, and commence construction of the store in the year.	The revised planning consent for Guildford Central was obtained in July 2016. Construction has commenced on the storewith a viewto aMarch 2018 opening.
Maintain the net promoter score for customer satisfaction from the Customer Experience programme in excess of 65 for move in and move out surveys.	The move in NPS score for the year was 83, a significant increase from 75 in the prior year.The move out NPS score for the year was 67, an increase from 66 in the prior year.
Maintain the Group's brand leadership of unprompted and prompted awareness throughout the UK, to be measured by third party survey in the year.	The You Gov survey commissioned in April 2017 has shown our prompted awareness to be at 74% in London,two and halftimes higherthan our nearest competitor and 41% for the rest of the UK, nearly three times higher than our nearest competitor.This compares to 74% and 38% respectively last year.
	For unprompted brand awareness, ourrecall in London is 47%, nearly six times higher than our nearest competitor and for the rest of the UK it is 21%, more than eight times higher than our nearest competitor.
Reduce the carbon intensity for the year to 31 March 2017 (KgCO2/m2 of occupied space) by 5% from the year to 31 March 2016.	Carbon intensity was reduced by 13% for the year to 31 March 2017.

The other targets, covering areas such as real estate, staffing and certain financial targets, were met in the majority of cases.

Following careful consideration of the performance targets and actual performance of the Group and the Executive Directors, the Committee has concluded that the award in respect of the financial year ended 31 March 2017 has provisionally vested at 90% of its potential amount for the year. For the year ended 31 March 2016, the Committee concluded that the award had provisionally vested as to 90% of its potential amount for the year. There is a further year's performance onwhich the LTBPP is assessed before any awards vest. Part ofthe awardwillthen be subjectto a holding period in linewith the Remuneration Policy.

Sharesave Scheme

The Group's Sharesave Scheme is open to all UK employees (including Executive Directors) with a minimum of six months' service and meets UK HMRC approval requirements, thus giving all eligible employees the opportunity to acquire shares in the Company in a tax efficient manner.Three of the Executive Directors participated in the scheme during the financial year.The details of the Sharesave scheme options are shown on page 82.

Pension entitlements

The Company pays pension contributions into the Executive Directors' personal pension plans or makes a cash contribution in lieu of pension contributions. They do not participate in any defined benefit scheme. Forthe year ended 31March 2017,the Company contributionwas 15% of salary forthe Executive Directors.

Remuneration Report (continued)

Year ended 31 March 2017

Payments to past Directors

No payments of money or any other assetswere made to any former Director ofthe Company in the financial year ended 31March 2017 (2016: no payments).

Payments on loss of office

No payments were made to any Directors in respect of loss of office during the financial year ended 31 March 2017 (2016: no payments).

Non-Executive Directors

The table below sets out the single total figure of remuneration and breakdown for each Non-Executive Director paid in the year ended 31 March 2017.

		Fees
		£
	2017	2016
Tim Clark	43,700	42,800
Richard Cotton	41,000	40,100
Georgina Harvey	38,400	37,600
Steve Johnson	38,400	37,600
Mark Richardson	41,000	40,100
Total	202,500	198,200

Non-Executive Director fees were increased by 2% for the year ended 31 March 2017. Non-Executive Directors received no taxable benefits for the year ended 31 March 2017.

Implementation of the Policy in coming year

The main elements of Executive Director remuneration for the year ended 31 March 2017 and the forthcoming financial year are summarised below:

Element	Implementation in 2016/17	Implementation in 2017/18
Base salary	Salary levels for Executive Directors:	Salary levels for Executive Directors:
	> Executive Chairman: £269,800 > Chief Executive: £296,000 > Operations Director: £219,300 > Chief Financial Officer: £219,300	> Executive Chairman: £275,200 > Chief Executive: £302,000 > Operations Director: £223,700 > Chief Financial Officer: £223,700
	Salaries were increased by 2% from the 2015/16 salaries. Increases for the wider employee population were 2%.	Salaries were increased by 2% from the 2016/17 salaries. Increases were made in accordance with the Policy. Increases for the wider employee population were 2%.
Benefits and Pension	Contribution of 15% of salary made into Executive Directors personal pension plan, or a cash supplement of equivalent value paid in lieu of pension contribution.	No change
Annual bonus	Maximum opportunity of 25% of salary.	No change
	Assessed on stores' performance against our Key Performance Indicators:
	> Occupancy and net contribution together represented 60% of the bonus > Customer satisfaction (33% of the bonus) > Store standards (7% of the bonus)

Implementation of the Policy (continued)

Element	Implementation in 2016/17	Implementation in 2017/18
Long Term Incentive Plan	Maximum opportunity of 100% of salary, with grants of 100% of salary for each of the Executive Directors.	No change
	These awards were granted with the following performance conditions:
	> 70% adjusted EPS – adjusted EPS growth of RPI+3% for 25% of this element of the award to vest with full vesting occurring for adjusted EPS growth of RPI+8% p.a.; > 30% – relative TSR performance vs. FTSE Real Estate Index with 25% of this element of the award vesting for median TSR comparative performance and full vesting at upper quartile.
Long Term Bonus Performance Plan	> No awards were made under the scheme this year as awards are granted every three years.	No awards will be made this year as awards are granted every three years.
	The assessment of targets for the year ended 31 March 2017 can be found on page 78 and 79.

Non-Executive Directors

During the year, fees for Non-Executive Directors have been reassessed for the year ending 31 March 2018.

The Company reviewed the Non-Executive Director base fee and decided to adjustitfrom £38,400 to £39,200 (2.1% increase) and to harmonise the additional fee provided for Committee Chairs and the Senior Independent Director to £5,000.

Non-Executive	2016/17 fee	2017/18 fee
Richard Cotton	£41,000	£44,200
Tim Clark	£43,700	£44,200
Georgina Harvey	£38,400	£44,200
Mark Richardson	£41,000	£44,200
Steve Johnson	£38,400	£39,200

Fees retained for external non-executive directorships

The Executive Directors' contracts do not allow them to engage in any other business outside the Group except where prior written consent from the Board is received. The Company recognises that Executive Directors may be invited to become Non-Executive Directors of other companies and that this can help broaden the skills and experience of a Director. Executive Directors are normally permitted to accept external appointments with the approval of the Board and may retain the fees for the appointment.

Nicholas Vetch is a Non-Executive Director ofThe Local Shopping REIT plc for which he receives a fee of £30,000 per annum. James Gibson is a Non-Executive Director of AnyJunk Limited and of Moby Self Storage in Brazil; he does not receive any fees for his services.

Statement of Directors' shareholding

The Executive Directors are required to build and maintain a holding of two times base salary.These requirements have been met by all Executive Directors throughout the year. Non-Executive Directors are not subject to a shareholding requirement. Details of the Directors' interests in shares are set out below (all interests are beneficial interests).

No changes took place in the interests of the Directors in the shares of the Company between 31 March 2017 and the date of this report.

Remuneration Report (continued)

Year ended 31 March 2017

Statement of Directors' shareholding (continued)

The table below shows, in relation to each Director, the total number of shares and share options in which they have an interest. LTBPP awards are not shown in the table below as the number of shares awarded is calculated by reference to the total vested award value divided by the Company's share price at the vesting date.

Director	Share ownership requirement (multiple of salary)	Share ownership requirements met	Holding as multiple of salary	Beneficially owned shares	LTIP awards subject to performance conditions	Unexercised Sharesave options	Options exercised in the financial year
Nicholas Vetch	2x	Yes	240.6x	9,062,663	125,999	–	60,266
James Gibson	2x	Yes	60.0x	2,479,700	138,207	1,480	66,098
Adrian Lee	2x	Yes	27.9x	854,643	102,385	2,960	45,804
John Trotman	2x	Yes	5.1x	154,658	100,322	3,639	45,804
Richard Cotton	N/a	N/a	N/a	73,485	–	–	–
Mark Richardson	N/a	N/a	N/a	27,225	–	–	–
Tim Clark	N/a	N/a	N/a	20,615	–	–	–
Steve Johnson	N/a	N/a	N/a	10,000	–	–	–
Georgina Harvey	N/a	N/a	N/a	13,013	–	–	–

Directors' share options

To provide further context on the shareholding of the Executive Directors, options in respect of ordinary shares for Directors who served in the year are as below:

Name	Date option granted	Scheme	No. of shares under option at 2016	Granted 31 March during the year	Exercised during the year	Lapsed during the year	No. of shares under option at 31 March 2017	Exercise price	Market price at date of exercise	Date from which first exercisable	Expiry Date
Nicholas Vetch	22 July 2013	LTIP	60,266	–	(60,266)	–	–	nil p	696.0 p	22 July 2016	21 July 2023
	29 July 2014	LTIP	50,467	–	–	–	50,467	nil p	–	29 July 2017	28 July 2024
	21 July 2015	LTIP	38,112	–	–	–	38,112	nil p	–	21 July 2018	20 July 2025
	22 July 2016	LTIP	–	37,420	–	–	37,420	nil p	–	22 July 2019	21 July 2026
James Gibson	22 July 2013	LTIP	66,098	–	(66,098)	–	–	nil p	766.7 p	22 July 2016	21 July 2023
	29 July 2014	LTIP	55,352	–	–	–	55,352	nil p	–	29 July 2017	28 July 2024
	21 July 2015	LTIP	41,801	–	–	–	41,801	nil p	–	21 July 2018	20 July 2025
	14 March 2016	SAYE	1,480	–	–	–	1,480	608.0p	–	31 March 2019	1 October 2019
	22 July 2016	LTIP	–	41,054	–	–	41,054	nil p	–	22 July 2019	21 July 2026
Adrian Lee	22 July 2013 29 July 2014	LTIP LTIP	45,804 40,989	– –	(45,804) –	– –	– 40,989	nil p nil p	766.7 p –	22 July 2016 29 July 2017	21 July 2023 28 July 2024
	21 July 2015	LTIP	30,980	–			30.980	nil p	–	21 July 2018	20 July 2025
	14 March 2016 22 July 2016	SAYE LTIP	2,960 –	– 30,416	– –	– –	2,960 30,416	608.0p nil p	– –	31 March 2019 22 July 2019	1 October 2019 21 July 2026

John Trotman	22 July 2013	LTIP	45,804	–	(45,804)	–	–	nil p	766.7 p	22 July 2016	21 July 2023
	29 July 2014	LTIP	38,926	–	–	–	38,926	nil p	–	29 July 2017	28 July 2024
	16 March 2015	SAYE	3,639	–	–	–	3,639	494.6p	–	31 March 2018	1 October 2018
	21 July 2015	LTIP	30,980	–	–	–	30,980	nil p	–	21 July 2018	20 July 2025
	22 July 2016	LTIP	–	30,416	–	–	30,416	nil p	–	22 July 2019	21 July 2026

Performance and pay

The graph below shows the Group's performance, measured by TSR, compared with the performance of the FTSE All Share Real Estate Index and the FTSE All Share Index since 2000.The FTSE All Share Real Estate Index is used for the assessment of the Company's LTIP.

CEO Remuneration

The table below sets out the details of remuneration of the CEO over the past eight financial years.

CEO single figure of total remuneration (£)	Annual bonus pay out % against maximum of 25% of salary	Long term incentive weighted average vesting rates against maximum opportunity %
850,619	40% (10% of salary)	100%
988,811	48% (12% of salary)	100%
1,756,290	50% (12.5% of salary)	98%
536,262	40% (10% of salary)	53%
335,891	40% (10% of salary)	0%
1,400,570	40% (10% of salary)	89%
325,968	40% (10% of salary)	0%
875,593	40% (10% of salary)	100%

The single figure of remuneration for 2015 and 2012 are higher than in other years due to the vesting of the three year Long Term Bonus Performance Plan in those years delivering a reward of £945,750 (97% vesting) and £900,000 (90% vesting)respectively for the three year period ended in that year.

Percentage increase in the CEO's remuneration

The table below compares the percentage increase in the CEO's remuneration (including salary, fees, benefits and annual bonus) with the remuneration of Big Yellow Group employees.

		% increase in remuneration in 2017 compared with 2016
	CEO	Employees
Salary and fees	2%	2%
All taxable benefits	22%	2%
Annual bonuses	(15%)	(15%)

Statement of consideration of employment conditions elsewhere in the Group

The Committee reviews the reward and retention of the whole employee population periodically throughout the year to ensure that it can attract and retain top talent. Particular consideration is given to the general basic salary increase, remuneration arrangements and employment conditions. Furthermore, the Annual Bonus Plan awarded to Executive Directors is directly linked to the bonuses awarded to all staff.

The Directors are invited to be present at this review of the proposals for salary increase for the employee population generally and on any other changes to remuneration policy within the Company. The information presented at this review is taken into consideration when setting the pay levels of the executive population. Additionally, the Committee has guidelines for the grant of all LTIP awards across the Company and responsibility for approving the total annual bonus cost of the Company.The Company does not invite employees to comment on the remuneration of Directors.

Remuneration Report (continued)

Year ended 31 March 2017

Relative importance of spend on pay

The graph sets out the relative importance of spend on pay in the year ended 31 March 2017 and 31 March 2016 compared with other disbursements from profit, being the distributions to shareholders and retained earnings (comprehensive gain for the year less dividends).

Advisers to the Remuneration Committee

The Committee consults with the Executive Chairman, Nicholas Vetch, about proposals on a range of matters relating to the remuneration of the Executive Directors including the levels of overall remuneration, salary and bonus and awards and distributions under the share incentive and bonus plans.

The Committee relies upon remuneration data provided by PwC. In addition, PwC has provided advice to the Committee on the preparation of this report as well as on market practice and trends. PwC is a member of the Remuneration Consultants Group and, as such, voluntarily operates under the Code of Conduct in relation to executive remuneration consulting in the UK.

The Committee is satisfied that advice received from PwC during the year was objective and independent.

Adviser	Appointed by	Services provided to the Committee in 2016/17	Fees in relation to remuneration advice
PwC	Remuneration Committee in 2008	Remuneration market practice, governance updates and support in the drafting of the Directors' Remuneration Report.	£6,000

Attendance at Remuneration Committee meetings

Attendance at meetings of the individual Directors at the Remuneration Committee Meetings that they were eligible to attend is shown in the table below:

Director	Number of meetings attended
Tim Clark
Richard Cotton
Georgina Harvey
Steve Johnson
Mark Richardson

attended absent

Steve Johnson missed one meeting due to an unavoidable business commitment.

Consideration of shareholders' views

The Group is committed to ongoing shareholder dialogue and monitors and reviews voting outcomes. Where there are substantial votes against resolutions in relation to Directors' remuneration, the reasons for that voting will be sought and any actions in response will be detailed here. Following feedback from shareholders, we have enhanced the disclosures surrounding the annual bonus paid to the Executive Directors in this report.

The table below shows the advisory vote on the 2016 Remuneration Report at the AGM held on 22 July 2016.

	Votes for	%	Votes Against	%	Votes withheld
2016 Remuneration Report	125,349,939	99.25	944,742	0.75	239,135

The views of our shareholders are very importantto us and the Remuneration Committee considers shareholder feedback received in relation to the AGMeach year atits first meeting following the AGM.This feedback, aswell as any additional feedback received during any other meetingswith shareholders throughout the year, is then considered as part of the Company's annual review of remuneration policy.

The Remuneration Committee notes that shareholders do not speakwith a single voice, butwe engagewith ourlargest shareholders to ensurewe understand the range of views which exist on remuneration issues. When any material changes are proposed to the Policy, the Remuneration Committee Chairman will inform major shareholders in advance, and will offer a meeting to discuss these.

Tim Clark

Chairman of the Remuneration Committee 22 May 2017

Audit Committee Report

INTRODUCTION

The Audit Committee is appointed by the Board from the Non-Executive Directors of the Group.The Audit Committee's terms of reference include all matters indicated by Disclosure and Transparency Rule 7.1 and the UK Corporate Governance Code. The terms of reference are considered annually by the Audit Committee and are then referred to the Board for approval.

The Audit Committee is responsible for:

> monitoring the integrity ofthe financial statements ofthe Group and any formal announcements relating to the Group's financial performance and reviewing significant financial reporting judgements contained therein;
> reviewing the Group's internal financial controls and the Group's internal control and risk management systems, including consideration of the need for an internal audit function;
> making recommendations to the Board for a resolution to be put to the shareholders for their approval in general meetings, on the appointment of the external auditor and the approval of the remuneration and terms of engagement of the external auditor;
> reviewing andmonitoring the external auditor's independence and objectivity and the effectiveness ofthe audit process,taking into consideration relevant UK professional and regulatory requirements; and
> developing and implementing a policy on the engagement of the external auditor to supply non-audit services, taking into account relevant guidance regarding the provision of non-audit services by the external audit firm.

The Audit Committee is required to report its findings to the Board, identifying any matters on which it considers that action or improvement is needed, and make recommendations on the steps to be taken.

This year, the Committee has tendered the Group's external audit and continued to focus on the narrative reporting and corporate governance disclosures in the Annual Report. The Committee was asked by the Board to review the statement by the Directors that the Annual report presents a fair, balanced and understandable view of the Group's performance, strategy and business model.

Mark Richardson

Audit Committee Chairman

Committee Members and Attendance

Member	Position	Number of meetings attended
Tim Clark	Member
Richard Cotton	Member
Georgina Harvey	Member
Steve Johnson	Member
Mark Richardson	Chairman

attended

absent

Richard Cotton and Steve Johnson both missed one Audit Committee meeting during the year due to unavoidable business commitments.

All Audit Committee members are expected to be financially literate. Furthermore, the Audit Committee structure requires the inclusion of one financially qualified member(as recognised by the Consultative Committee of Accountancy Bodies). CurrentlyMark Richardson, as a Fellow of the Institute of Chartered Accountants of England and Wales, fulfils this requirement.

Mark Richardson has announced his intention to retire from the Board at the 2017 Annual General Meeting. The Board has commenced recruitment for his successor as Audit Committee Chairman and anticipates announcing his successor before the AGM. It is the Board's intention that his successor will be a financially qualified member.

The Group provides an induction programme for new Audit Committee members and ongoing training to enable all of the Committee members to carry out their duties. The induction programme covers the role of the Audit Committee, its terms of reference and expected time commitment by members and an overview of the Group's business, including the main business and financial dynamics and risks. New Committee members also meet some of the Group's staff. Ongoing training includes attendance at formal conferences, internal company seminars and briefings by external advisers.

Meetings

The Audit Committee is required tomeetthree times per year and has an agenda linked to events in the Group's financial calendar.The agenda is predominantly cyclical and is therefore approved by the Audit Committee Chairman on behalf of his fellow members. Each Audit Committee member has the right to require reports on matters of interest in addition to the cyclical items.

The Audit Committee invites the Chief Executive, Chief Financial Officer, Financial Controller, and senior representatives of the external auditor to attend all of itsmeetings in full, although itreserves the rightto request any ofthese individuals towithdraw. Other seniormanagement are invited to present such reports as are required for the Committee to discharge its duties.

Overview of the actions taken by the Audit Committee to discharge its duties

Since the beginning of the financial year the Audit Committee has:

> reviewed published financial information including the year end results, Annual Report, half year results and the Interim Management Statements;
> considered whether the Annual Report provides a fair, balanced and understandable view of the Group's performance, strategy and business model;
> assessed and concluded on the Group's viability statement;
> considered the output from the Group-wide process used to identify, evaluate and mitigate risks;
> reviewed the effectiveness of the Group's internal controls and disclosures made in the annual report and financial statements on this matter;
> reviewed and agreed the scope of the audit work to be undertaken by the external auditor;
> agreed the fees to be paid to the external auditor for their audit of the March 2017 financial statements and September half-yearly report;
> considered and agreed the approach of performing Directors' valuations of investment properties for the half-year report;
> undertaken an assessment of the qualification, expertise and resources, and independence of the external auditor and the effectiveness of the audit process;
> considered the audit partner and audit firm rotation;
> having considered audit firm rotation, the Committee conducted a tender for the appointment of a new external auditor during the year;
> undertaken an evaluation of the performance of the external auditor;
> considered the need for an internal audit function;
> reviewed the arrangements for "whistleblowing" by employees to ensure that there is a consistent policy in the Group to enable employees to voice concerns particularly in respect of possible financial reporting improprieties. A whistleblowing policy is included in the employee handbook;
> met the Group's external valuers;
> met the Group's Store Compliance Manager;
> reviewed the Audit Committee's Report; and
> reviewed its own effectiveness.

Financial reporting and significant financial judgements

The Committee reviews all financial information published by the Group in year end and half-yearfinancial statements, including the presentation and disclosure of the financial information. It also considers the appropriateness of the accounting policies adopted by the Group and the accounting judgements made by management in the preparation of the financial information.

The Committee has considered whether the Annual Report for the year ended 31March 2017 provides a fair, balanced and understandable view of the Group's performance, strategy and businessmodel andwhetherit provides the necessary information to enable shareholders and prospective shareholders to assess the Group's performance, strategy and business model.The Committee is satisfied that the Annual Report for the year ended 31 March 2017 provides a fair, balanced and understandable viewand includes the necessary information as set out above.The Committee has confirmed this to the Board,whose statement is included in the Statement of Directors' Responsibilities on page 88.

The Committee focuses on matters it considers important in their impact on the reported results of the Group, and on matters where there is a high degree of complexity and/or judgement.

The key area of judgement that the Committee focuses on at the reporting date is the valuation of the investment property portfolio. This is carried out by independent external valuers, but by its nature it is subjective, with significant judgement applied to the valuation, particularly given the lack of transactional evidence for prime self storage assets.Members ofthe Committeemetthe external valuers to discuss the valuations,reviewthe key judgements and discussed whether there were any disagreements with management. This year the Committee reviewed and challenged the valuers on the cap rates, rental growth assumptions and stabilised occupancy levels, to agree on the appropriateness of the assumptions adopted.The Committee also challenged the valuers, and satisfied itself on,theirindependence,their quality control processes (including peer partnerreview) and qualifications to carry outthe valuations.Management also have processes in place to review the external valuations. In addition, the external auditors use specialists to review the valuations and report their findings and conclusions to the Audit Committee.

The Committee has also considered a number of other judgements made by managementin the preparation ofthe financial statements. It has concluded that there is not a significant level of judgements involved.

Management have reported to the Audit Committee that they are satisfied that they are not aware of any material misstatements in the financial statements. The auditors confirmed in their report to the Audit Committee that they had not found any material misstatements during their audit work.

Based on the above, the Committee concluded that the financial statements appropriately apply the key estimates and critical judgements, in respect of the disclosures and the amounts reported. The Committee also concluded that the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

External auditor

The Audit Committee is responsible for the development, implementation and monitoring of the Group's policy on external audit.The policy assigns oversight responsibility for monitoring the independence, objectivity and compliance with ethical and regulatory requirements to the Audit Committee, and day-to-day responsibility to the Chief Financial Officer.The policy states that the external auditor is jointly responsible to the Board and the Audit Committee and that the Audit Committee is the primary contact.

To fulfil its responsibility regarding the independence of the external auditor, the Audit Committee reviewed:

> the external auditor's plan for the current year, noting the role of the senior statutory audit partner, who signs the audit report and who, in accordance with professional rules, has not held office for more than five years, and any changes in the key audit staff;
> the arrangements for day-to-day management of the audit relationship;
> a report from the external auditor describing their arrangements to identify, report and manage any conflicts of interest;
> the overall extent of non-audit services provided by the external auditor, in addition to its case-by-case approval of the position of non-audit services by the external auditor; and
> the past service of the auditor who was first appointed in 2000.

Annual auditor assessment

The Audit Committee has adopted a formal framework in its review of the effectiveness of the external audit process and audit quality which include the following areas:

> the arrangements for ensuring the external auditor's independence and objectivity;
> the lead audit engagement partner and the audit team;
> the external auditor's fulfilment of the agreed audit plan and variations from the plan;
> the quality of the formal audit report to shareholders;
> the robustness and perceptiveness of the auditor in his handling of the key accounting and audit judgements; and
> the content of the external auditor's comments on control improvement recommendations.

Regard is paid to the nature of, and remuneration received, for other services provided by Deloitte LLP to the Group and, inter alia, confirmation is sought from them that the fee payable for the annual audit is adequate to enable them to perform their obligations in accordance with the scope of the audit. Where non-audit services are provided, the fees are based on the work undertaken and are not success related.

Non-audit work

The Group's policy on external audit sets outthe categories of non-audit serviceswhich the external auditorwill andwill not be allowed to provide to the Group, including those that are pre-approved by the Audit Committee and those which require specific approval before they are contracted for, subjectto de minimis levels.They may not provide a service which places them in a position where they may be required to audit their own work. Specifically, they are precluded fromproviding services relating to bookkeeping, financial information systemdesign and implementation, appraisal or evaluation services, actuarial services, any management functions, investment banking services, legal services unrelated to the audit or advocacy services.

In respect of the year ended 31 March 2017, the auditor's remuneration comprised £186,000 for audit work and £85,000 for other work, principally relating to the interim review, VAT work, and the assurance of the CSR report. In addition, over a three year rolling period, the level of non-audit fees is below the audit fee.

Audit rotation

The Group's current auditor, Deloitte LLP, has been in tenure since 2000 and the current audit partner has been in place since the audit of the 2013 financial statements. During the year the Committee tendered the external audit with a view to changing auditors given this year marked the end of the five year term of the current audit partner.

Following a robust tender process, the Committee appointed KPMG LLP as auditors. As part of the tender process, the Committee reviewed KPMG's proposals for the audit and determined that they had an appropriate plan in place to carry out an effective audit. KPMG confirmed to the Committee that it maintained appropriate internal safeguards to ensure its independence and objectivity.

The Company is in compliancewith the requirements ofthe Statutory Audit Services for Large CompaniesMarketInvestigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 and the Code.

Risk management and internal control

The Committee and the Board reviewed the internal control processes ofthe business and the Group's risk register during the year.The risks and uncertainties facing the Group, and its internal control processes are considered in the Strategic Report on pages 37 to 39.

Internal audit

The Committee has considered the Board's viewthat, given the relatively straightforward nature ofthe Group's business and the control environmentin place, no formal internal audit function is required.The Committee concurs with management's view.

Overview

As a result of its work during the year, the Audit Committee has concluded that it has acted in accordance with its terms of reference and has ensured the independence and objectivity of the external auditor.

The Chairman of the Audit Committee will be available at the Annual General Meeting to answer any questions about the work of the Committee.

Approved by the Audit Committee and signed on its behalf by:

Mark Richardson Audit Committee Chairman 22 May 2017

Statement of Directors' Responsibilities

Directors' responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws and regulations.

Company lawrequires the Directors to prepare such financial statements for each financial year. Underthatlawthe Directors are required to prepare the Group financial statements in accordancewith International Financial Reporting Standards (IFRSs) as adopted by the European Union and Article 4 ofthe IAS Regulation and have also chosen to prepare the parent Company financial statements under IFRSs as adopted by the European Union. Under Company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, International Accounting Standard 1 requires that the Directors:

> properly select and apply accounting policies;
> present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
> provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
> make an assessment of the Company's ability to continue as a going concern.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006.They are also responsible for safeguarding the assets ofthe Company and hence fortaking reasonable steps forthe prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' responsibility statement

We confirm that to the best of our knowledge:

1. the financial statements, prepared in accordancewith International Financial Reporting Standards give a true and fair viewofthe assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
1. the strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
1. the annualreport and financial statements,taken as awhole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

This responsibility statement was approved by the Board of Directors on 22 May 2017 and is signed on its behalf by:

James Gibson John Trotman

Chief Executive Officer Chief Financial Officer

Independent auditor's report to the members of Big Yellow Group PLC

Opinion on financial statements of Big Yellow Group PLC	In our opinion: > the financial statements give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 March 2017 and of the Group's profit for the year then ended; > the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union; > the parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and > the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. The financial statements that we have audited comprise: > the Consolidated Statement of Comprehensive Income; > the Consolidated and Parent Company Balance Sheets; > the Consolidated and Parent Company Cash Flow Statements; > the Consolidated and Parent Company Statements of Changes in Equity; and > the related notes 1 to 34. The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by
	the European Union and, as regards the parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
Summary of our audit approach	Key risks The key risk identified in the current year relates to the key assumptions implicit in the valuations of the investment property portfolio.
	Materiality The materiality that we used in the current year was £8.9m (2016: £7.9m) which was determined on the basis of 1% of net assets. Scoping We performed full scope audits on all components of the Group which account for 100% of the Group's revenue and net assets. We also performed specified procedures on the Group's associates.

	Going concern and the Directors' assessment of the principal risks that would threaten the	As required by the Listing Rules we have reviewed the Directors' statement regarding the appropriateness of the going concern basis of accounting and the Directors' statement on the longer-term viability of the Group on page 39.	We confirm that we have nothing material to add or draw attention to in respect
solvency or liquidity of the Group	We are required to state whether we have anything material to add or draw attention to in relation to:	of these matters. We agreed with the Directors'
	> the Directors' confirmation on page 37 that they have carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity; > the disclosures on pages 37 to 39 that describe those risks and explain how they are being managed or mitigated; > the Directors' statement in note 2 to the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them and their identification of any material uncertainties to the Group's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements; and > the Directors' explanation on page 39 as to how they have assessed the prospects of the Group, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.	adoption of the going concern basis of accounting and we did not identify any such material uncertainties. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group's ability to continue as a going concern.

Independent auditor's report to the members of Big Yellow Group PLC (continued)

Independence	We are required to comply with the Financial Reporting Council's Ethical Standards for Auditors and confirm that we are independent of the Group and we have fulfilled our other ethical responsibilities in accordance with those standards.	We confirm that we are independent of the Group and we have fulfilled our other ethical responsibilities in accordance with those standards. We also confirm we have not provided any of the prohibited non-audit services referred to in those standards.
Our assessment of risks of material misstatement	The assessed risk of material misstatement described below is the risk that had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team.
Investment property valuation
Risk description	As at 31 March 2017, the Group held wholly-owned investment properties and investment properties under construction valued at £1,190.5 million (2015: £1,126.2 million) all located within the United Kingdom.
	The Group also has minority investments in two associate entities (Armadillo Storage Holding Company Limited and Armadillo Storage Company 2 Limited"), together 'the Associates' for which equity accounting is applied.The Associates control a combined gross value of £69.3 million (2016: £57.7 million)in self storage assets, of which 20% is recognised by the Group.
	Investment properties are held at fair value on the Consolidated Balance Sheet.The net valuation gain in the year relating to Group held wholly-owned investment properties was £43.7 million (2016: £58.0 million), which was recognised through the Consolidated Income Statement.
	The net valuation gain, included within the share of profit of associates, relating to the properties held by the Associates was £4.0 million (2016: £3.5 million) on a gross basis and therefore £0.8 million (2016: £0.7 million) on a Group share basis.
	Fair values are calculated using actual and forecast inputs such as: occupancy, capitalisation rates, maximum lettable area, operating expenses and net rent per square foot by property as at 31 March 2017. In addition, external valuers apply professional judgement concerning market conditions and factors impacting individual properties.
	We consider investment property valuation to be a significant and key risk of material misstatement as the valuation process is subjective and inherently judgemental in nature.The investment market for prime self storage, in particular, is subject to market uncertainty due to the low volume of transactions.
	Refer to the accounting policies of the Group set out on page 101 and 103 for the Group's investment property valuation policy and the associated critical accounting judgement for determining fair value.
	See also note 14 to the financial statements, and the Audit Committee's Report on pages 85 to 87.
How the scope of our audit responded to the risk	> We assessed the design and implementation ofthe key internal controls around the property valuation process; > We tested the integrity ofthe information provided to the external valuers bymanagement by agreeing key inputs such as actual occupancy and netrent per square footto underlying records and source evidence; > Wemodelled ten years of valuations and key valuation inputs ofthe investment properties subjectto audit,to
	understand the historicaltrends of key inputs and compared these againstthe key forecast assumptions included in
	the property valuation; > Wemetwith the external valuers covering both the Group and Associate portfolios and assessed theirindependence, the scope ofthework theywere requested to performbymanagement, quality control procedures in place internally
	and the valuationmethodology applied; > We challenged the external valuers on the key assumptions applied and focussed on propertieswe identified as having significant or unusual valuationmovements (compared tomarket data or previous periods). Our challenge was informed by inputfromourinternal valuation specialists, utilising their knowledge and expertise in themarket at amacro level and the relevant geographies to challenge the key judgmental inputs.We also researched comparable transactions and understood trends in analogous industries and utilised this information in our audit challenge. We understood the rationale for outlying valuations ormovements and obtained corroborative evidence.We also assessed the valuations for a sample of other properties; and > We visited a sample of properties to assess the condition ofthe buildings and validate a sample of occupancy
	data inputs.

Investment property valuation
Key observations	>	We concluded that the underlying assumptions included in the valuation are reasonable;
	>	At a property level, no exceptions were identified that required reporting to the Audit Committee; and
	>	The valuation, as a whole, is a reasonable reflection of the fair value of the portfolio

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Group materiality

£8.9 million (2016: £7.9 million)

Basis for determining materiality

1% of Net Assets

Rationale for the benchmark applied

Net assets is the measure of principal interest of investors when measuring return on investment. Furthermore, the property valuation is the source of most subjectivity and judgment in the financial statements.

We applied a lower threshold of £2.7 million (2016: £2.3 million)for scoping the testing of all balances and classes of transactions impacting adjusted profit before tax. We consider adjusted profit before tax to be a critical financial performance measure for the Group on the basis that it is a key metric to analysts and investors and has substantial prominence in the Annual Report. Adjusted profit before tax is £54.6 million (2016: £49.0 million), which is reconciled to profit before tax of £99.8 million (2016: £112.3 million)in accordance with IFRS in note 10 of the financial statements.This lower threshold was based on 5% (2016: 5%) of adjusted profit before tax.

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £0.4 million (2016: £0.4 million), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

Independent auditor's report to the members of Big Yellow Group PLC (continued)

An overview of the scope of our audit	The Group is entirely UK based andwholly owned by Big YellowGroup PLC,with the exception ofthe 20% interests in the Associates. Our auditwas scoped by obtaining an understanding ofthe Group and its control environment, including Group-wide controls, and assessing the risks ofmaterialmisstatement.
	As in previous years,the auditteamperformed full scope audits at amateriality lowerthan Groupmateriality for all entitieswithin the Group.The scope of our audit covered 100% of both consolidated profit before tax and consolidated net assets. Componentmateriality adopted for subsidiaries companies ranged frombetween £0.1million and £8.4million.
	The Group continues to hold 20% ofthe equity ofthe Associates and continues tomanage these portfolios.The Group applies equity accounting forthese interests and the equity interestin Armadillo Holdings 1 Limited and Armadillo Holdings 2 Limited amounts to £5.0million and £2.4million respectively.We have performed specified audit procedures on all balances and transactionsmaterialto these entities forthe purposes of supporting the Group audit opinion.
	The Group auditteamcontinued to followa programme of planned site visits duringMarch 2017. At each site visitedwe undertook an inventory count, performed design and implementation testing of key controls, verified a sample of fixed assets and occupancy data, agreed cash balances to bank reconciliations and held discussionswith key store staff.
Opinion on other matters prescribed by the Companies Act 2006	In our opinion:
	> the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006;
	> the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and >
	the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
	In the light ofthe knowledge and understanding ofthe Company and its environment obtained in the course ofthe audit,we have notidentified anymaterialmisstatements in the Strategic Report and the Directors' Report.
Matters on which we are required to report by exception
Adequacy of explanations received	Under the Companies Act 2006 we are required to report to you if, in our opinion:	We have nothing
and accounting records	> we have not received all the information and explanations we require for our audit; or > adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or	to report in respect of these matters.
	> the parent Company financial statements are not in agreement with the accounting records and returns.
Directors' remuneration	Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors' remuneration have not been made or the part of the Directors' Remuneration Report to be audited is not in agreement with the accounting records and returns.	We have nothing to report arising from these matters.
Corporate Governance Statement	Under the Listing Rules we are also required to review part of the Corporate Governance Statement relating to the Company's compliance with certain provisions of the UK Corporate Governance Code.	We have nothing to report arising from our review.
Our duty to read other information in the Annual Report	Under International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is:	We confirm that we have
	> materially inconsistent with the information in the audited financial statements; or > apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired in the course of performing our audit; or > otherwise misleading.	not identified any such inconsistencies or misleading
	In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and the Directors' statement that they consider the annual report is fair, balanced and understandable and whether the annual report appropriately discloses those matters that we communicated to the audit committee which we consider should have been disclosed.	statements.

Respective responsibilities of Directors and auditor	As explained more fully in the Directors' Responsibilities Statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). We also comply with International Standard on Quality Control 1 (UK and Ireland). Our audit methodology and tools aim to ensure that our quality control procedures are effective, understood and applied. Our quality controls and systems include our dedicated professional standards review team and independent partner reviews.
	This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose.To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Scope of the audit of the financial statements	An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.This includes an assessment of: whether the accounting policies are appropriate to the Group's and the parent Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Darren Longley FCA (Senior Statutory Auditor)

for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditor London, UK 22 May 2017

Consolidated Statement of Comprehensive Income

Year ended 31 March 2017

	Note	2017 £000	2016 £000
Revenue	3	109,070	101,382
Cost of sales		(34,075)	(32,632)
Gross profit		74,995	68,750
Administrative expenses		(9,679)	(8,896)
Operating profit before gains on property assets		65,316	59,854
Gain on the revaluation of investment properties 13a,14		43,706	58,001
Profit on disposal of surplus land	15	–	4,754
Operating profit		109,022	122,609
Share of profit of associates	13d	1,442	1,104
Investment income – interest receivable	7	356	403
– fair value movement on derivatives 7, 18		719	–
Finance costs – interest payable	8	(11,756)	(11,866)
– fair value movement of derivatives 8, 18		–	(4)
Profit before taxation		99,783	112,246
Taxation	9	(272)	(247)
Profit for the year (attributable to equity shareholders)	5	99,511	111,999
Total comprehensive income for the year (attributable to equity shareholders)		99,511	111,999

Basic earnings per share	12	63.6p	71.9p

Diluted earnings per share	12	63.1p	71.6p

EPRA earnings per share are shown in Note 12.

All items in the consolidated statement of comprehensive income relate to continuing operations.

Consolidated Balance Sheet

Year ended 31 March 2017

2017 Note £000	2016 £000
Non-current assets
1,154,390 Investment property 13a	1,092,210
Investment property under construction 13a 36,115	33,945
Interests in leasehold property 13a 23,601	20,165
Plant, equipment and owner-occupied property 13b 3,216	3,405
Goodwill 13c 1,433	1,433
Investment in associates 13d 7,452	6,406
Capital Goods Scheme receivable 16 4,091	6,561
1,230,298	1,164,125
Current assets
Surplus land 15 –	300
Inventories 283	266
Trade and other receivables 16 18,042	16,222
Cash and cash equivalents 6,906	17,207
25,231	33,995
Total assets 1,255,529	1,198,120
Current liabilities Trade and other payables 17 (36,935)	(36,122)
Borrowings 19 (2,356)	(2,243)
Obligations under finance leases 21 (2,005)	(1,722)
(41,296)	(40,087)

Non-current liabilities
Derivative financial instruments 18c (2,964)	(3,683)
Borrowings 19 (299,323)	(306,520)
Obligations under finance leases 21 (21,596)	(18,443)
(323,883)	(328,646)
Total liabilities (365,179)	(368,733)
Net assets 890,350	829,387

Equity
Share capital 22 15,788	15,737
Share premium account 45,462 Reserves 829,100	45,227 768,423
Equity shareholders' funds 890,350	829,387

The financial statements were approved by the Board of Directors and authorised for issue on 22 May 2017.They were signed on its behalf by:

James Gibson John Trotman Director Director Company Registration No. 03625199

Consolidated Statement of Changes in Equity

Year ended 31 March 2017

	Share capital £000	Share premium account £000	Other non- distributable reserve £000	Capital redemption reserve £000	Retained earnings £000	Own shares £000	Total £000
At 1 April 2016	15,737	45,227	74,950	1,795	692,697	(1,019)	829,387
Total comprehensive gain for the year	–	–	–	–	99,511	–	99,511
Issue of share capital	51	235	–	–	–	–	286
Dividend	–	–	–	–	(41,158)	–	(41,158)
Credit to equity for equity-settled
share based payments	–	–	–	–	2,324	–	2,324
At 31 March 2017	15,788	45,462	74,950	1,795	753,374	(1,019)	890,350

The other non-distributable reserve arose in the year ended 31 March 2015 following the placing of 14.35 million ordinary shares.

Year ended 31 March 2016

	Share capital £000	Share premium account £000	Other non- distributable reserve £000	Capital redemption reserve £000	Retained earnings £000	Own shares £000	Total £000
At 1 April 2015	15,806	44,922	74,950	1,653	619,206	(5,623)	750,914
Total comprehensive gain for the year	–	–	–	–	111,999		111,999
Issue of share capital	73	305	–	–	–	–	378
Cancellation of treasury shares	(142)	–	–	142	(3,727)	3,727	–
Use of own shares to satisfy share options	–	–	–	–	(877)	877
Dividend	–	–	–	–	(36,443)	–	(36,443)
Credit to equity for equity-settled
share based payments	–	–	–	–	2,539	–	2,539
At 31 March 2016	15,737	45,227	74,950	1,795	692,697	(1,019)	829,387

Consolidated Cash Flow Statement

Year ended 31 March 2017

Note	2017 £000	2016 £000
Operating profit Gain on the revaluation of investment properties 13a, 14 Profit on disposal of surplus land 15 Depreciation 13b Depreciation of finance lease capital obligations 13a Employee share options 6	109,022 (43,706) – 738 1,196 2,324	122,609 (58,001) (4,754) 663 967 2,539
Cash generated from operations pre working capital movements (Increase)/decrease in inventories (Increase)/decrease in receivables (Decrease)/increase in payables	69,574 (17) (1,456) (892)	64,023 38 369 1,785
Cash generated from operations Interest paid Interest received Tax paid	67,209 (10,980) 16 (271)	66,215 (10,763) 15 –
Cash flows from operating activities	55,974	55,467
Investing activities Sale of surplus land Acquisition of Lock and Leave (net of cash acquired) 13a Purchase of non-current assets Additions to surplus land Receipts from Capital Goods Scheme Dividend received from associates 13d	300 (14,239) (6,338) – 2,917 396	7,835 – (44,509) (66) 184 270
Cash flows from investing activities	(16,964)	(36,286)
Financing activities Issue of share capital Payment of finance lease liabilities Equity dividends paid 11 Drawing of M&G loan Repayment of Lloyds short term loan (Decrease)/increase in borrowings	286 (1,196) (41,158) – – (7,243)	378 (967) (36,443) 70,000 (70,000) 26,864
Cash flows from financing activities	(49,311)	(10,168)
Net (decrease)/increase in cash and cash equivalents Opening cash and cash equivalents	(10,301) 17,207	9,013 8,194
Closing cash and cash equivalents	6,906	17,207

Reconciliation of Net Cash Flow to Movement in Net Debt

Year ended 31 March 2017

Note	2017 £000	2016 £000
Net (decrease)/increase in cash and cash equivalents in the year Cash flow from decrease/(increase) in debt financing	(10,301) 7,243	9,013 (26,864)
Change in net debt resulting from cash flows	(3,058)	(17,851)
Movement in net debt in the year Net debt at the start of the year	(3,058) (294,991)	(17,851) (277,140)
Net debt at the end of the year 18	(298,049)	(294,991)

Notes to the Financial Statements

Year ended 31 March 2017

1. GENERAL INFORMATION

Big YellowGroup PLC is a Company incorporated in the United Kingdomunderthe Companies Act 2006.The address ofthe registered office is 2 The Deans, Bridge Road, Bagshot, Surrey, GU19 5AT.The nature of the Group's operations and its principal activities are set out in note 4 and in the Strategic Report on pages 16 to 30.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of financial statements

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use in the European Union in accordancewith EU law(IAS regulation EC1606/2002) and those parts ofthe Companies Act 2006 applicable to companies reporting underIFRS, and therefore the Group financial statements comply with Article 4 of the EU IAS Regulation.

The financial statements are presented in Sterling, being the currency ofthe primary economic environmentinwhich the Group operates. Unless otherwise stated, figures are rounded to the nearest thousand.

The accounting policies adopted are consistent with those of the previous financial year, except as described in the following sections.

Amendments to IFRSs that are mandatorily effective for the current year

In the current year, the Group has applied a number of amendments to IFRSs issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2016.Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

Amendments to IFRS 11	Accounting for Acquisitions of Interests in Joint Operations
Amendments to IAS 1	Disclosure Initiative
Amendments to IAS 16 and IAS 38	Clarification of Acceptable Methods of Depreciation and Amortisation
Amendments to IAS 16 and IAS 41	Agriculture: Bearer Plants
Amendments to IAS 27	Equity Method in Separate Financial Statements
Annual Improvements to IFRSs: 2012-2014	Annual Improvements to IFRSs

New and revised IFRSs in issue but not yet effective

At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRSs that have been issued but are not yet effective:

IFRS 9	Financial Instruments
IFRS 15	Revenue from Contracts with Customers
IFRS 16	Leases
IFRS 2 (amendments)	Classification and Measurement of Share-based PaymentTransactions
IAS 7 (amendments)	Disclosure Initiative
IAS 12 (amendments)	Recognition of Deferred Tax Assets for Unrealised Losses
IFRS 10 and IAS 28 (amendments)	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods.

Basis of accounting

The financial statements have been prepared on the historical cost basis, except for the revaluation of certain investment properties and financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for the assets.The principal accounting policies adopted, which have been applied consistently to the results, other gains and losses, assets, liabilities and cash flows of entities included in the consolidated financial statements in the current and preceding year, are set out below:

Going concern

A reviewofthe Group's business activities,togetherwith the factors likely to affectits future development, performance and position are set out on in the Strategic Report. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are shown in the balance sheet, cash flow statement and accompanying notes to the financial statements. Furtherinformation concerning the Group's objectives, policies and processes formanaging its capital; its financialriskmanagement objectives; details of its financial instruments and hedging activities; and its exposures to creditrisk and liquidity risk can be found in the Strategic Report and in the notes to the financial statements.

After reviewing Group and Company cash balances, borrowing facilities, forecast valuation movements and projected cash flows, the Directors believe that the Group and Company have adequate resources to continue operations for the foreseeable future. In reaching this conclusion the Directors have had regard to the Group's operating plan and budget for the year ending 31March 2018 and projections contained in the longer term business plan which covers the period to March 2021. The Directors have carefully considered the Group's trading performance and cash flows as a result of the uncertain global economic environment and the other principal risks to the Group's performance, and are satisfied with the Group's positioning. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company made up to 31March each year. Control is achieved where the Company has the power to direct the relevant activities of an investee entity so as to obtain benefits from its activities.

The Group consolidates the financial results and balance sheets of Big Yellow Group PLC and all of its subsidiaries at the year end using acquisition accounting principles. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, atthe date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control ofthe acquiree. Any costs directly attributable to the business combination are recognised in the income statement. The acquiree's identifiable assets, liabilities and contingentliabilities that meetthe conditions for recognition under IFRS 3 are recognised attheir fair value atthe acquisition date, exceptfor non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at the lower of their carrying amount and fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interestin the netfair value ofthe identifiable assets, liabilities and contingentliabilities recognised. If, afterreassessment,the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the statement of comprehensive income.

Investment in subsidiaries

These are recognised at cost less provision for any impairment.

Investment in associates

An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting except when classified as held for sale. Investments in associates are carried in the balance sheet at cost as adjusted by post-acquisition changes in the Group's share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group's interest in that associate (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate) are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. Where necessary, adjustments are made to the financial statements of associates to bring the accounting policies used into line with those used by the Group.

Where a Group Company transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group's interest in the relevant associate. Losses may provide evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.

Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition.

Goodwill is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the statement of comprehensive income and is not subsequently reversed.The goodwill in the balance sheet has an indefinite useful economic life.

Revenue recognition

Revenue represents amounts derived from the provision of services which fall within the Group's ordinary activities after deduction of trade discounts and any applicable value added tax. Income is recognised overthe period forwhich the storage room is occupied by the customer on a straight-line basis. The Group recognises non-storage income on a straight-line basis over the period in which it is earned.

Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

Management fees earned are recognised on a straight-line basis over the period for which the services are provided. Fees earned from associates are recognised in full in the income statement through revenue with the proportionate debit shown in the share of profit of associate.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Operating leases

Rentals payable under operating leases are charged to the statement of comprehensive income on a straight-line basis overthe termofthe relevantlease. In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

Borrowings

Interest-bearing loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Premiums payable on settlement or redemption and direct issue costs are accounted for on an accruals basis in the statement of comprehensive income using the effective interest rate method and are added to the carrying value amount of the instrument to the extent that they are not settled in the period in which they arise.

Finance costs

All borrowing costs are recognised in the statement of comprehensive income in the period in which they are incurred, unless the costs are incurred as part ofthe development of a qualifying asset,when theywill be capitalised. Commencement of capitalisation is the datewhen the Group incurs expenditure for the qualifying asset, incurs borrowing costs and undertakes activities that are necessary to prepare the assets for their intended use when it is probable that they will result in future economic benefits to the entity and the costs can be measured reliably. In the case of suspension of activities during extended periods, the Group suspends capitalisation. The Group ceases capitalisation of borrowing costs when substantially all of the activities necessary to prepare the asset for use are complete.

Operating profit

Operating profit is stated after gains and losses on surplus land, movements on the revaluation of investment properties and before the share of results of associates, investment income and finance costs.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year.Taxable profit differs from the net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for alltaxable temporary differences and deferred tax assets are recognised to the extentthatitis probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise fromgoodwill orfromthe initialrecognition (otherthan in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates substantively enacted at the balance sheet date that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Plant, equipment and owner occupied property

All property, plant and equipment, not classified as investment property, is carried at historic costless depreciation and any recognised impairmentloss.

Depreciation is charged so as to write off the cost or valuation of assets, other than land and investment properties, over their estimated useful lives, using the straight-line method, on the following bases:

Freehold property	50 years
Leasehold improvements	Over period of the lease
Plant and machinery	10 years
Motor vehicles	4 years
Fixtures and fittings	5 years
Computer equipment	3 to 5 years

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

Investment property

The criteria used to distinguish investment property from owner-occupied property is to consider whether the property is held for rental income and for capital appreciation. Where this is the case, the Group recognises these owned or leased properties as investment properties. Investment property is initially recognised at cost and revalued at the balance sheet date to fair value as determined by professionally qualified external valuers. In accordance with IAS 40, investment property held as a leasehold is stated gross of the recognised finance lease liability.

Gains or losses arising from the changes in fair value of investment property are included in the statement of comprehensive income of the period in which they arise. In accordance with IAS 40, as the Group uses the fair value model, no depreciation is provided in respect of investment properties including integral plant.

Leasehold properties that are leased under operating leases are classified as investment properties and included in the balance sheet at fair value.The obligation to the lessor for the buildings element of the leasehold is included in the balance sheet at the present value of the minimum lease payments at inception, and is shown within note 21. Lease payments are apportioned between finance charges and a reduction of the outstanding lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.

Investment property under construction

Investment property under construction is initially recognised at cost and revalued atthe balance sheet date to fair value as determined by professionally qualified external valuers.

Gains or losses arising from the changes in fair value of investment property under construction are included in the statement of comprehensive income in the period in which they arise.

Surplus land

Surplus land, which can include assets held for development and future sale, is recognised at the lower of cost and net realisable value. Any gains and losses on surplus land are recognised through the statement of comprehensive income.

Impairment of assets

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).The recoverable amount is the higher of an asset's net selling price and its value-in-use (i.e. the net present value of its future cash flows discounted at the Group's average pre-tax interest rate that reflects the borrowing costs and risk for the asset).

Inventories

Inventories, representing the cost of packing materials, are stated at the lower of cost and net realisable value.

Financial instruments

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. Financial assets at FVTPL are stated atfair value,with any gains or losses arising on re-measurementrecognised in profit or loss.The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the 'other gains and losses' line item in the income statement.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

A – Derivative financial instruments and hedge accounting

The Group's activities expose it primarily to the financial risks of interest rates. The Group uses interest rate swap contracts to hedge these exposures. The Group does not use derivative financial instruments for speculative purposes. The use of financial derivatives is governed by the Group's policies approved by the Board of Directors.The policy in respect of interestrates is to maintain a balance between flexibility and the hedging of interestrate risk.

Derivatives are initially recognised at fair value and are subsequently reviewed at each balance sheet date.The fair value of interest rate derivatives at the reporting date is determined by discounting the future cash flows using the forward curves at the reporting date and the credit risk inherent in the contract.

Changes in the fair value of derivative financial instruments are recognised in the statement of comprehensive income as they arise.The Group has not adopted hedge accounting. Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of host contracts and the host contracts are not carried at fair value with unrealised gains or losses reported in the statement of comprehensive income.

B – Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

C – Impairment of financial assets

Financial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

D – Cash and cash equivalents

Cash and cash equivalents comprises cash on hand and demand deposits, and other short term highly liquid investments that are readily convertible to a known amount of cash and are subjectto an insignificantrisk of changes in value.The carrying amounts ofthese assets approximates to the fair value.

E – Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.

F – Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

G – Trade payables

Trade payables are not interest bearing and are stated at their nominal value.

Retirement benefit costs

Pension costs represent contributions payable to defined contribution schemes and are charged as an expense to the statement of comprehensive income as they fall due.The assets of the schemes are held separately from those of the Group.

Share-based payments

The Group issues equity-settled share-based payments to certain employees. These are measured at fair value at the date of grant. The fair value determined at the grant date of the share-based payment is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest.

Fair value is measured by use of the Black-Scholes model and excludes the effect of non-market based vesting conditions.The expected life used in the model has been adjusted, based onmanagement's best estimate, forthe effects of non-transferability, exercise restrictions, and behavioural considerations. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market based vesting conditions. The impact of the revision of the original estimates, if any, is recovered in profit and loss such that the cumulative expenses reflects the revised estimate with a corresponding adjustment to equity reserves.

For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At each balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is re-measured, with any changes in fair value recognised in profit or loss for the year.

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Critical accounting estimates and judgements

In the application ofthe Group's accounting policies,which are described above,the Directors are required tomake judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Estimate of fair value of Investment Properties and Investment Property under Construction (critical accounting estimate)

The Group's self storage centres and stores under development are valued using a discounted cash flow methodology which is based on projections of net operating income.The Group employs expert external valuers, Cushman &Wakefield LLP, who report on the values of the Group's stores on an annual basis. The stores within the Armadillo Partnerships are valued by Jones Lang LaSalle. The principal assumptions underlying the estimation of the fair value are those related to: stabilised occupancy levels; expected future growth in storage rents, capitalisation rates and discount rates. A more detailed explanation of the background and methodology adopted in the valuation of the Group's investment properties is set out in note 14 to the accounts.

3. REVENUE

Analysis of the Group's operating revenue can be found below and in the Portfolio Summary on page 22.

	2017 £000	2016 £000
Open stores
Self storage income	91,600	84,900
Other storage related income	15,189	14,568
Ancillary store rental income	526	354
	107,315	99,822
Other revenue
Non-storage income	885	808
Management fees earned	870	752
Revenue per statement of comprehensive income	109,070	101,382

Interest receivable on bank deposits (see note 7)	16	15
Total revenue per IAS 18	109,086	101,397

Non-storage income derives principally from rental income earned from tenants of properties awaiting development.

4. SEGMENTAL INFORMATION

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance. Given the nature of the Group's business, there is one segment, which is the provision of self storage and related services.

Revenue represents amounts derived fromthe provision of self storage and related serviceswhich fallwithin the Group's ordinary activities after deduction of trade discounts and value added tax.The Group's net assets, revenue and profit before tax are attributable to one activity, the provision of self storage and related services.These all arise in the United Kingdom in the current year and prior year.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

5. PROFIT FOR THE YEAR

a) Profit for the year has been arrived at after charging/(crediting):

	2017 £000	2016 £000
Depreciation of plant, equipment and owner-occupied property	738	663
Leasehold property depreciation	1,196	967
Gain on the revaluation of investment property	(43,706)	(58,001)
Profit on disposal of surplus land	–	(4,754)
Cost of inventories recognised as an expense	1,035	1,095
Employee costs (see note 6)	15,622	15,094
Operating lease rentals	133	78
Auditor's remuneration for audit services (see below)	186	186

b) Analysis of auditor's remuneration:

	2017 £000	2016 £000
Fees payable to the Company's auditor for the audit of the Company's annual accounts Fess payable to the Company's auditor for the subsidiaries' annual accounts	156 30	156 30
Total audit fees	186	186
Audit related assurance services – interim review	31	31
Tax advisory services	19	60
Other assurance services – assurance of CSR report	22	22
Other services – planning consultancy	11	–
Other services	2	–
Total non-audit fees	85	113

Fees payable to Deloitte LLP and their associates for non-audit services to the Company are not required to be disclosed because the consolidated financial statements are required to disclose such fees on a consolidated basis. Fees charged by Deloitte LLP to the Group's associates, Armadillo Storage Holding Company Limited and Armadillo Storage Holding Company 2 Limited in the year amounted to £49,000 (2016: £43,000), which all related to audit services.

6. EMPLOYEE COSTS

The average monthly number of full-time equivalent employees (including Executive Directors) was:

	2017 Number	2016 Number
Sales	279	271
Administration	50	47
	329	318

At 31 March 2017 the total number of Group employees was 361 (2016: 358).

	2017 £000	2016 £000
Their aggregate remuneration comprised:
Wages and salaries	10,990	10,443
Social security costs	1,783	1,634
Other pension costs	525	478
Share-based payments	2,324	2,539
	15,622	15,094

Details of Directors' Remuneration is given on pages 70 to 84.

7. INVESTMENT INCOME

	2017 £000	2016 £000
Bank interest receivable Unwinding of discount on Capital Goods Scheme receivable	16 340	15 388
Total interest receivable	356	403
Change in fair value of interest rate derivatives	719	–
Total investment income	1,075	403

8. FINANCE COSTS

	2017 £000	2016 £000
Interest on bank borrowings	10,953	11,187
Capitalised interest	(128)	(247)
Interest on obligations under finance leases	931	926
Total interest payable	11,756	11,866
Change in fair value of interest rate derivatives	–	4
Total finance costs	11,756	11,870

9. TAXATION

The Group converted to a REITin January 2007. As a result the Group does not pay UK corporation tax on the profits and gains from its qualifying rental business in the UK provided that it meets certain conditions. Non-qualifying profits and gains of the Group are subject to corporation tax as normal. The Group monitors its compliance with the REIT conditions.There have been no breaches of the conditions to date.

Finance (No.2) Bill 2015 provides that the rate of corporation tax for the 2017 Financial Year(commencing 1 April 2017) will be 19% and that the rate from 1 April 2020 would be 18%. At Budget 2016, the government announced a further reduction to the Corporation Tax main rate (for all profits except ring fence profits) for the year starting 1 April 2020, setting the rate at 17%. This rate was incorporated in Finance Act 2016 which was fully enacted on 15 September 2016.

	2017 £000	2016 £000
UK current tax
Current tax:
– Current year	417	247
– Prior year	(145)	–
	272	247

Notes to the Financial Statements (continued)

Year ended 31 March 2017

9. TAXATION (continued)

A reconciliation of the tax charge is shown below:

	2017 £000	2016 £000
Profit before tax	99,783	112,246
Tax charge at 20% (2016 – 20%) thereon	19,957	22,449
Effects of:
Revaluation of investment properties	(8,741)	(11,600)
Share of profit of associates	(288)	(220)
Other permanent differences	(1,242)	(930)
Profits from the tax exempt business	(8,791)	(7,725)
Profit on disposal of surplus land	–	(951)
Utilisation of brought forward losses	–	(51)
Movement on other unrecognised deferred tax assets	(478)	(725)
Current year tax charge	417	247
Prior year adjustment	(145)	–
Total tax charge	272	247

At 31 March 2017 the Group has unutilised tax losses of £32.6 million (2016: £32.3 million) available for offset against certain types of future taxable profits. All losses can be carried forward indefinitely.

10. ADJUSTED PROFIT

	2017 £000	2016 £000
Profit before tax	99,783	112,246
Gain on revaluation of investment properties – wholly owned	(43,706)	(58,001)
– in associate (net of deferred tax)	(756)	(566)
Change in fair value of interest rate derivatives – Group	(719)	4
– in associate	8	23
Profit on disposal of surplus land	–	(4,754)
Prior period VAT recovery	(328)	–
Acquisition costs written off	296	–
Share of associate acquisition costs written off	63	–
Adjusted profit before tax	54,641	48,952
Tax	(272)	(247)
Adjusted profit after tax	54,369	48,705

Adjusted profit before tax which excludes gains and losses on the revaluation of investment properties, changes in fair value of interest rate derivatives, net gains and losses on surplus land, and non-recurring items of income and expenditure have been disclosed to give a clearer understanding of the Group's underlying trading performance.

11. DIVIDENDS

	2017 £000	2016 £000
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 March 2016 of 12.8p (2015: 11.3p) per share.	20,003	17,541
Interim dividend for the year ended 31 March 2017 of 13.5p (2016: 12.1p) per share.	21,155	18,902
	41,158	36,443
Proposed final dividend for the year ended 31 March 2017 of 14.1p (2016: 12.8p) per share.	22,107	20,003

Subject to approval by shareholders at the Annual General Meeting to be held on 20 July 2017, the final dividend will be paid on 27 July 2017.The ex-div date is 22 June 2017 and the record date is 23 June 2017.

The Property Income Dividend ("PID") payable for the year is 24.0 pence per share (2016: 18.1 pence per share).

12. EARNINGS AND NET ASSETS PER SHARE

Earnings per ordinary share

	Year ended 31 March 2017			Year ended 31 March 2016
	Earnings £m	Shares million	Pence per share	Earnings £m	Shares million	Pence per share
Basic	99.5	156.5	63.6	112.0	155.8	71.9
Dilutive share options	–	1.2	(0.5)	–	0.7	(0.3)
Diluted	99.5	157.7	63.1	112.0	156.5	71.6
Adjustments:
Gain on revaluation of investment properties	(43.7)	–	(27.7)	(58.0)	–	(37.1)
Change in fair value of interest rate derivatives	(0.7)	–	(0.4)	–	–	–
Profit on disposal of surplus land	–	–	–	(4.8)	–	(3.1)
Acquisition costs written off	0.3	–	0.2	–	–	–
Prior period VAT recovery	(0.3)	–	(0.2)	–	–	–
Share of associate non-recurring gains	(0.7)	–	(0.5)	(0.5)	–	(0.3)
EPRA – diluted	54.4	157.7	34.5	48.7	156.5	31.1
EPRA – basic	54.4	156.5	34.8	48.7	155.8	31.3

The calculation of basic earnings is based on profit after tax for the year.The weighted average number of shares used to calculate diluted earnings per share has been adjusted for the conversion of share options.

EPRA earnings and earnings per ordinary share before non-recurring items, movements on revaluation of investment properties, gains on surplus land, the change in fair value of interestrate derivatives, and share of associate non-recurring gains and losses (including deferred tax on revaluation surpluses) have been disclosed to give a clearer understanding of the Group's underlying trading performance.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

12. EARNINGS AND NET ASSETS PER SHARE (continued)

Net assets per share

The European Public Real Estate Association ("EPRA") has issued recommended bases for the calculation of net assets per share information and this is shown in the table below:

	31 March 2017 £000	31 March 2016 £000
Basic net asset value	890,350	829,387
Exercise of share options	820	700
EPRA NNNAV	891,170	830,087
Adjustments:
Fair value of derivatives	2,964	3,683
Fair value of derivatives – share of associate	77	69
Share of deferred tax in associates	626	573
EPRA NAV	894,837	834,412
Basic net assets per share (pence)	568.0	530.8
EPRA NNNAV per share (pence)	562.1	525.5
EPRA NAV per share (pence)	564.4	528.3
EPRA NAV (as above) (£000)	894,837	834,412
Valuation methodology assumption (see note 14) (£000)	68,530	64,560
Adjusted net asset value (£000)	963,367	898,972
Adjusted net assets per share (pence)	607.6	569.1

	No. of shares	No. of shares
Shares in issue	157,882,867	157,369,287
Own shares held in EBT	(1,122,907)	(1,122,907)
Basic shares in issue used for calculation	156,759,960	156,246,380
Exercise of share options	1,781,652	1,707,743
Diluted shares used for calculation	158,541,612	157,954,123

Net assets per share are equity shareholders' funds divided by the number of shares at the year end.The shares currently held in the Group's Employee Benefit Trust are excluded from both net assets and the number of shares. Adjusted net assets per share include the effect of those shares issuable under employee share option schemes and the effect of alternative valuation methodology assumptions (see note 14).

13. NON-CURRENT ASSETS

a) Investment property, investment property under construction and interests in leasehold property

	Investment property £000	Investment property under construction £000	Interests in leasehold property £000	Total £000
At 31 March 2015	1,007,110	15,681	20,829	1,043,620
Additions	3,668	41,695	–	45,363
Reclassification	19,437	(19,437)	–	–
Adjustment to present value	–	–	303	303
Revaluation (see note 14)	61,995	(3,994)	–	58,001
Depreciation	–	–	(967)	(967)
At 31 March 2016	1,092,210	33,945	20,165	1,146,320
Additions	17,817	2,827	1,871	22,515
Adjustment to present value	–	–	2,761	2,761
Revaluation (see note 14)	44,363	(657)	–	43,706
Depreciation	–	–	(1,196)	(1,196)
At 31 March 2017	1,154,390	36,115	23,601	1,214,106

Additions to the interests in leasehold properties relate to the lease atTwickenham 2, acquired from Lock and Leave during the year.

The income from self storage accommodation earned by the Group from its investment property is disclosed in note 3. Direct operating expenses, which are all applied to generating rental income, arising on the investment property in the year are disclosed in the Portfolio Summary on page 22. Included within additions is £0.1 million of capitalised interest (2016: £0.2 million), calculated at the Group's average borrowing cost for the year of 3.3%. 55 of the Group's investment properties are pledged as security for loans, with a total external value of £951.8 million.

Acquisition of Lock and Leave

On 28 April 2016 the Group acquired the entire share capital and control ofthree companies from the Lock and Leave Group – Lock and Leave Limited, Kator Storage Limited and Lock and Leave (Twickenham) Limited ("the Companies"), for a consideration of £14.6 million. The net consideration is shown below.The Companies owned two self storage centres in London.

To determine the assets and liabilities acquired at the date of completion of the Companies, the Group has used the balance sheet at the date of acquisition.The following provides a breakdown of the fair value of the assets and liabilities acquired.The investment property was carried at cost in the companies' balance sheets, and hence the fair value adjustment shown below is to increase the carrying amount to open market valuation.

	Book value £000	Adjustments £000	Fair value £000
Non-current assets	5,792	8,808	14,600
Current assets	950	–	950
Current liabilities	(697)	–	(697)
Non-current liabilities	(176)	–	(176)
Net assets (100%)	5,869	8,808	14,677

	£000
Purchase consideration	14,677
Purchase consideration paid	14,677
Cash held in Companies acquired	(438)
Cash outflow on acquisition	14,239

Fromthe date of acquisition ofthe Companies on 28 April 2016 to 31March 2017,the revenue ofthe Companieswas £1.8million, and the statutory profit before tax was £4.4 million.The costs of acquisition amounted to £0.3 million.These are included in administrative expenses in the income statement.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

13. NON-CURRENT ASSETS (continued)

b) Plant, equipment and owner occupied property

	Freehold property £000	Leasehold improvements £000	Plant and machinery £000	Motor vehicles £000	Fixtures, fittings & office equipment £000	Total £000
Cost
At 31 March 2015	1,885	53	544	25	1,416	3,923
Retirement of fully depreciated assets	–	–	(103)	–	(439)	(542)
Additions	298	48	151	–	521	1,018
At 31 March 2016	2,183	101	592	25	1,498	4,399
Retirement of fully depreciated assets	–	(4)	(34)	–	(489)	(527)
Additions	6	–	91	30	422	549
Disposals	–	–	–	(23)	–	(23)
At 31 March 2017	2,189	97	649	32	1,431	4,398
Depreciation
At 31 March 2015	(328)	(50)	(219)	(25)	(251)	(873)
Retirement of fully depreciated assets	–	–	103	–	439	542
Charge for the year	(39)	(2)	(81)	–	(541)	(663)
At 31 March 2016	(367)	(52)	(197)	(25)	(353)	(994)
Retirement of fully depreciated assets	–	4	34	–	489	527
Charge for the year	(42)	(2)	(102)	(5)	(587)	(738)
Disposals	–	–	–	23	–	23
At 31 March 2017	(409)	(50)	(265)	(7)	(451)	(1,182)
Net book value
At 31 March 2017	1,780	47	384	25	980	3,216
At 31 March 2016	1,816	49	395	–	1,145	3,405

c) Goodwill

The goodwill relates to the purchase of Big Yellow Self Storage Company Limited in 1999.The asset is tested bi-annually for impairment.The carrying value remains unchanged from the prior year as there is considered to be no impairment in the value of the asset.

d) Investment in associates

Armadillo

The Group has a 20% interest in Armadillo Storage Holding Company Limited ("Armadillo 1") and a 20% interest in Armadillo Storage Holding Company 2 Limited ("Armadillo 2"). Both interests are accounted for as associates, using the equity method of accounting.

		Armadillo 1	Armadillo 2
	31 March	31 March	31 March	31 March
	2017	2016	2017	2016
	£000	£000	£000	£000
At the beginning of the year	4,173	3,638	2,233	1,934
Share of results (see below)	1,093	718	349	386
Dividends	(218)	(183)	(178)	(87)
Share of net assets	5,048	4,173	2,404	2,233

The Group's total subscription for partnership capital and advances in Armadillo 1 is £1,920,000 and £1,789,000 in Armadillo 2.

The investment properties owned by Armadillo 1 and Armadillo 2 have been valued at 31 March 2017 by Jones Lang LaSalle.

13. NON-CURRENT ASSETS (continued)

d) Investment in associates (continued)

The figures below show the trading results of the Armadillo Partnerships, and the Group's share of the results and the net assets of the Armadillo Partnerships.

		Armadillo 1		Armadillo 2
	Year ended 31 March 2017 £000	Year ended 31 March 2016 £000	Year ended 31 March 2017 £000	Year ended 31 March 2016 £000
Income statement (100%) Revenue Cost of sales Administrative expenses	6,324 (3,270) (207)	4,829 (2,560) (77)	4,159 (1,763) (88)	4,139 (1,954) (97)
Operating profit Gain on the revaluation of investment properties Net interest payable Acquisition costs written off Fair value movement of interest rate derivatives Deferred and current tax	2,847 3,725 (718) (316) 8 (78)	2,192 2,340 (514) – (9) (421)	2,308 322 (729) – (49) (109)	2,088 1,111 (688) – (104) (478)
Profit attributable to shareholders Dividends paid	5,468 (1,091)	3,588 (916)	1,743 (890)	1,929 (434)
Retained profit	4,377	2,672	853	1,495
Balance sheet (100%) Investment property Interest in leasehold properties Other non-current assets Current assets	43,375 – 1,125 1,177	32,825 – 1,015 888	25,900 3,526 1,487 867	24,825 3,809 1,490 845
Current liabilities Derivative financial instruments Non-current liabilities	(1,895) (199) (18,341)	(1,193) (207) (12,463)	(1,821) (188) (17,753)	(1,840) (139) (17,825)
Net assets (100%)	25,242	20,865	12,018	11,165
Group share (20%) Operating profit Gain on the revaluation of investment properties Net interest payable Acquisition costs written off Fair value movement of interest rate derivatives Deferred and current tax	569 745 (144) (63) 2 (16)	439 468 (103) – (2) (84)	462 64 (146) – (10) (21)	418 222 (138) – (21) (95)
Profit attributable to shareholders Dividends paid	1,093 (218)	718 (183)	349 (178)	386 (87)
Retained profit	875	535	171	299
Associates' net assets	5,048	4,173	2,404	2,233

Notes to the Financial Statements (continued)

Year ended 31 March 2017

14. VALUATION OF INVESTMENT PROPERTY

	Deemed cost £000	Revaluation on deemed cost £000	Valuation £000
Freehold stores
At 31 March 2016	566,913	483,367	1,050,280
Movement in year	16,384	44,246	60,630
At 31 March 2017	583,297	527,613	1,110,910
Leasehold stores
At 31 March 2016	14,777	27,153	41,930
Movement in year	1,433	117	1,550
At 31 March 2017	16,210	27,270	43,480
Total of open stores
At 31 March 2016	581,690	510,520	1,092,210
Movement in year	17,817	44,363	62,180
At 31 March 2017	599,507	554,883	1,154,390
Investment property under construction
At 31 March 2016	42,650	(8,705)	33,945
Movement in year	2,827	(657)	2,170
At 31 March 2017	45,477	(9,362)	36,115
Valuation of all investment property
At 31 March 2016	624,340	501,815	1,126,155
Movement in year	20,644	43,706	64,350
At 31 March 2017	644,984	545,521	1,190,505

The Group has classified the fair value investment property and the investment property under construction within Level 3 of the fair value hierarchy. There has been no transfer to or from Level 3 in the year.

The wholly owned freehold and leasehold investment properties have been valued at 31 March 2017 by external valuers, Cushman & Wakefield LLP ("C&W").The valuation has been carried outin accordancewith the RICS Valuation – Professional Standards, published by The Royal Institution of Chartered Surveyors ("the Red Book").The valuation of each of the investment properties and the investment properties under construction has been prepared on the basis of either Fair Value or Fair Value as a fully equipped operational entity, having regard to trading potential, as appropriate.

The valuation has been provided for accounts purposes and as such, is a Regulated Purpose Valuation as defined in the Red Book. In compliance with the disclosure requirements of the Red Book, C&W have confirmed that:

> one of the members of the RICS who has been a signatory to the valuations provided to the Group for the same purposes as this valuation, has done so since September 2004.This is the second occasion on which the other member has been a signatory;
> C&W have been carrying out this annual valuation for the same purposes as this valuation on behalf of the Group since September 2004;
> C&W do not provide other significant professional or agency services to the Group;
> in relation to the preceding financial year of C&W, the proportion of the total fees payable by the Group to the total fee income of the firm is less than 5%; and
> the fee payable to C&W is a fixed amount per store, and is not contingent on the appraised value.

Market uncertainty

C&W's valuation report comments on valuation uncertainty resulting from low liquidity in the market for self storage property. C&W note that in the UK since Q1 2013 there have only been nine transactions involving multiple assets and 13 single asset transactions. C&W state that due to the lack of comparable market information in the self storage sector, there is greater uncertainty attached to their opinion of value than would be anticipated during more active market conditions.

Portfolio Premium

C&W's valuation report further confirms that the properties have been valued individually but that if the portfolio was to be sold as a single lot or in selected groups of properties, the total value could differ significantly. C&W state that in current market conditions they are of the view that there could be a material portfolio premium.

14. VALUATION OF INVESTMENT PROPERTY (continued)

Valuation methodology

C&W have adopted different approaches for the valuation of the leasehold and freehold assets as follows:

Freehold and long leasehold

The valuation is based on a discounted cash flowofthe net operating income over a ten year period and notional sale ofthe asset atthe end ofthe tenth year.

Assumptions

A. Net operating income is based on projected revenue received less projected operating costs together with a central administration charge of 6% of the estimated annual revenue subject to a cap and a collar.The initial net operating income is calculated by estimating the net operating income in the first 12 months following the valuation date.
B. The net operating income in future years is calculated assuming either straight-line absorption from day one actual occupancy or variable absorption over years one to four ofthe cash flowperiod,to an estimated stabilised/mature occupancy level. In the valuation the assumed stabilised occupancy level forthe 73 trading stores (both freeholds and leaseholds) open at 31March 2017 averages 82.8% (31March 2016: 81.9%).The projected revenues and costs have been adjusted for estimated cost inflation and revenue growth.The average time assumed for the 73 stores to trade at their maturity levels is 22 months (31 March 2016: 20 months).
C. The capitalisation rates applied to existing and future net cash flow have been estimated by reference to underlying yields for industrial and retail warehouse property, yields for othertrading property types such as student housing and hotels, bank base rates,ten year money rates, inflation and the available evidence oftransactions in the sector.The valuation included in the accounts assumes rental growth in future periods. If an assumption of no rental growth is applied to the external valuation, the net initial yield pre-administration expenses for the 73 stores is 6.5% (31 March 2016: 6.5%)rising to a stabilised net yield pre-administration expenses of 7.2% (31 March 2016: 7.2%).
D. The future net cash flow projections (including revenue growth and cost inflation) have been discounted at a rate that reflects the risk associated with each asset.The weighted average annual discount rate adopted (for both freeholds and leaseholds)is 9.7% (31 March 2016: 9.9%).
E. Purchaser's costs in the range of 6.1% to circa 6.8% (see below) have been assumed initially, reflecting the progressive SLDT rates brought into force in March 2016 and sale plus purchaser's costs totalling circa 7.1% to 7.8% are assumed on the notional sales in the tenth year in relation to the freehold stores.

Short leasehold

The same methodology has been used as for freeholds, except that no sale of the assets in the tenth year is assumed but the discounted cash flow is extended to the expiry of the lease.The average unexpired term of the Group's seven short leasehold properties is 15.0 years (31March 2016: 15.5 years unexpired).

Sensitivities

As noted in 'Significant judgements and key estimates' on page 103, self storage valuations are complex, derived from data which is not widely publicly available and involve a degree of judgement. For these reasons we have classified the valuations of our property portfolio as Level 3 as defined by IFRS 13. Inputs to the valuations, some of which are 'unobservable' as defined by IFRS 13, include capitalisation yields, stable occupancy rates, and rental growth rates. The existence of an increase of more than one unobservable input would augment the impact on valuation. The impact on the valuation would be mitigated by the interrelationship between unobservable inputs moving in opposite directions. For example, an increase in stable occupancy may be offset by an increase in yield, resulting in no net impact on the valuation. A sensitivity analysis showing the impact on valuations of changes in yields and stable occupancy is shown below.

			Impact of a change in capitalisation rates	Impact of a change in stabilised occupancy assumption
		25 bps decrease 25 bps increase (£m)	(£m)	1% increase (£m)	1% decrease (£m)
Reported group	£1,154.4m	£43.3m	(£40.1m)	£16.7m	(£17.2m)

Investment properties under construction

C&W have valued the stores in development adopting the same methodology as set out above but on the basis of the cash flow projection expected for the store at opening and after allowing for the outstanding costs to take each scheme from its current state to completion and full fit-out. C&W have allowed for holding costs and construction contingency, as appropriate. Four schemes do not yet have planning consent and C&W have reflected the planning risk in their valuation.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

14. VALUATION OF INVESTMENT PROPERTY (continued)

Immature stores: value uncertainty

C&Whave assessed the value of each property individually. However, one of the Group's stores is relatively immature and has low initial cash flows. C&W have endeavoured to reflect the nature of the cash flow profile for this property in their valuation, and the higher associated risks relating to the as yet unproven future cash flows, by adjustment to the capitalisation rates and discount rates adopted. However, immature low cash flow stores of this nature are rarely, if ever, traded individually in the market, unless as part of a distressed sale or similar situation. Although, there is more evidence of immature low cash flow stores being traded as part of a group or portfolio transaction. Please note C&W's comments in relation to market uncertainty in the self storage sector due to the lack of comparable market transactions and information. The degree of uncertainty relating to the immature store is greater than in relation to the balance of the properties due to there being even less market evidence that might be available for more mature properties and portfolios. C&Wstate that in practice, if an actual sale of the properties were to be contemplated then any immature low cash flow stores would normally be presented to the market for sale lotted or grouped with other more mature assets owned by the same entity, in order to alleviate the issue of negative or low short term cash flow.This approach would enhance the marketability of the group of assets and assist in achieving the best price available in the market by diluting the cash flow risk.

C&W have not adjusted their opinion of Fair Value to reflect such a grouping of the immature asset with other properties in the portfolio and all stores have been valued individually. However, they highlight the matter to alert the Group to the manner in which the properties might be grouped or lotted in order to maximise their attractiveness to the market place. C&W consider this approach to be a valuation assumption but not a Special Assumption, the latter being an assumption that assumes facts that differ from the actual facts existing at the valuation date and which, if not adopted, could produce a material difference in value. As noted above, C&W have not assumed that the entire portfolio of properties owned by the entity would be sold as a single lot and the value for the whole portfolio in the context of a sale as a single lot may differ significantly from the aggregate of the individual values for each property in the portfolio, reflecting the lotting assumption described above.

Valuation assumption for purchaser's costs

The Group's investment property assets have been valued for the purposes of the financial statements after deducting notional purchaser's cost of circa 6.1% to 6.8% of gross value, as if they were sold directly as property assets.The valuation is an asset valuation which is entirely linked to the operating performance of the business.The assets would have to be sold with the benefit of operational contracts, employment contracts and customer contracts, whichwould be very difficultto achieve exceptin a corporate structure.This approach follows the logic ofthe valuation methodology in thatthe valuation is based on a capitalisation of the net operating income after allowing a deduction for operational cost and an allowance for central administration costs. Sale in a corporate structurewould resultin a reduction in the assumed Stamp Duty Land Tax but an increase in othertransaction costs reflecting additional due diligence resulting in a reduced notional purchaser's cost of 2.75% of gross value. All the significant sized transactions that have been concluded in the UK in recent yearswere completed in a corporate structure.The Group therefore instructed C&Wto carry out a Red Book valuation on the above basis, and this results in a higher property valuation at 31 March 2017 of £1,258.5 million (£68.0 million higher than the value recorded in the financial statements).The total valuations in the two Armadillo Partnerships performed by Jones Lang LaSalle are £2.5 million higher than the value recorded in the financial statements, of which the Group's share is £0.5 million. The sum of these is £68.5 million and translates to 43.2 pence per share. We have included this revised valuation in the adjusted diluted net asset calculation (see note 14).

15. SURPLUS LAND

	£000
At 31 March 2016	300
Disposal	(300)
At 31 March 2017	–

During the yearthe remaining surplus landwas sold at book value. During the prior year a gain of £4,754,000 arose on the disposal of surplus land at one site during the year(including the release of a prior year impairment).

16. TRADE AND OTHER RECEIVABLES

	31 March 2017 £000	31 March 2016 £000
Current
Trade receivables	3,174	3,050
Capital Goods Scheme receivable	2,725	2,866
Other receivables	266	241
Prepayments and accrued income	11,877	10,065
	18,042	16,222
Non-current
Capital Goods Scheme receivable	4,091	6,561

Trade receivables are net of a bad debt provision of £7,000 (2016: £11,000).The Directors considerthatthe carrying amount oftrade and otherreceivables approximates their fair value.

The Financial Review contains commentary on the Capital Goods Scheme receivable.

Trade receivables

The Group does not typically offer credit terms to its customers, requiring them to pay in advance of their storage period and hence the Group is not exposed to significant credit risk. A late charge of 10% is applied to a customer's account if they are greater than 10 days overdue in their payment.The Group provides for receivables on a specific basis.There is a right of lien over the customers' goods, so if they have not paid within a certain time frame, we have the rightto sellthe items they store to recoup the debt owed.Trade receivables that are overdue are provided for based on estimated irrecoverable amounts determined by reference to past default experience.

For individual storage customers, the Group does not perform credit checks, however this is mitigated by the fact that these customers are required to pay in advance, and also to pay a deposit ranging from between one week to four weeks' storage income. Before accepting a new business customer who wishes to use a number of the Group's stores, the Group uses an external credit rating to assess the potential customer's credit quality and defines credit limits by customer.There are no customers who represent more than 5% of the total balance of trade receivables.

Included in the Group's trade receivable balance are debtors with a carrying amount of £250,000 (2016: £353,000) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The average age of these receivables is 19 days past due (2016: 19 days past due).

Ageing of past due but not impaired receivables

	2017 £000	2016 £000
1 – 30 days	214	285
30 – 60 days	23	45
60 + days	13	23
Total	250	353

Movement in the allowance for doubtful debts

	2017 £000	2016 £000
Balance at the beginning of the year	11	19
Amounts provided in year	63	76
Amounts written off as uncollectible	(67)	(84)
Balance at the end of the year	7	11

The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

16. TRADE AND OTHER RECEIVABLES (continued)

Ageing of impaired trade receivables

	2017 £000	2016 £000
1 – 30 days	–	–
30 – 60 days	2	4
60 + days	5	7
Total	7	11

17. TRADE AND OTHER PAYABLES

	31 March 2017 £000	31 March 2016 £000
Current
Trade payables	13,279	10,453
Other payables	8,352	10,592
Accruals and deferred income	15,304	15,077
	36,935	36,122

The Group has financial risk management policies in place to ensure that all payables are paid within the creditterms.The Directors considerthe carrying amount of trade and other payables and accruals and deferred income approximates fair value.

18. FINANCIAL INSTRUMENTS

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance.The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 19, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. The Group's debt facilities require 45% of total drawn debt to be fixed.The Group has complied with this during the year.

With the exception of derivative instrumentswhich are classified as a financial liability atfair value through the profit and loss ("FVTPL"), financial liabilities are categorised under amortised cost. All financial assets are categorised as loans and receivables.

Exposure to credit, interest rate and currency risks arises in the normal course of the Group's business. Derivative financial instruments are used to manage exposure to fluctuations in interest rates, but are not employed for speculative purposes.

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.

A. Balance sheet management

The Group's Board reviews the capital structure on an ongoing basis. As part of this review, the Board considers the cost of capital and the risks associatedwith each class of capital.The Group seeks to have a conservative gearing ratio (the proportion of net debtto equity).The Board considers at each review the appropriateness of the current ratio in light of the above.The Board is currently satisfied with the Group's gearing ratio.

The gearing ratio at the year end is as follows:

	2017 £000	2016 £000
Debt	(304,955)	(312,198)
Cash and cash equivalents	6,906	17,207
Net debt	(298,049)	(294,991)
Balance sheet equity	890,350	829,387
Net debt to equity ratio	33.5%	35.6%

Debt is defined as long-term and short-term borrowings, as detailed in note 19, excluding finance leases and debt issue costs. Equity includes all capital and reserves of the Group attributable to equity holders of the Company. Net debt is defined as gross bank borrowings less cash and cash equivalents.

18. FINANCIAL INSTRUMENTS (continued)

B. Debt management

The Group currently borrows through a senior term loan, secured on 25 self storage assets and sites, a 15 year loan with Aviva Commercial Finance Limited secured on a portfolio of 15 self storage assets, and a £70 million seven year loan from M&G Investments Limited secured on a portfolio of 15 self storage assets. Borrowings are arranged to ensure an appropriate maturity profile and to maintain short term liquidity. Funding is arranged through banks and financial institutions with whom the Group has a strong working relationship.

C. Interest rate risk management

The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates.The risk is managed by the Group bymaintaining an appropriatemix between fixed and floating rate borrowings, and by the use of interestrate swap contracts. Hedging activities are evaluated regularly to alignwith interestrate views and defined risk appetite; ensuring optimal hedging strategies are applied, by either positioning the balance sheet or protecting interest expense through different interest rate cycles.

At 31 March 2017 the Group had two interest rate derivatives in place; £30 million fixed at 0.4% (excluding the margin on the underlying debt instrument) until October 2021, and £35 million fixed at 2.635% (excluding the margin on the underlying debt instrument) until June 2022.

Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt held and the cash flowexposures on the issued variable rate debt held.The fair value of interestrate swaps atthe reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk inherent in the contract, and is disclosed below.The average interest rate is based on the outstanding balances at the end of the financial year.

The £30 million interest rate swap settles on a monthly basis.The floating rate on the interest rate swap is one month LIBOR.The Group settles the difference between the fixed and floating interest rate on a net basis.

The £35million interestrate swap settles on a three-monthly basis.The floating rate on the interestrate swap is threemonth LIBOR.The Group settles the difference between the fixed and floating interest rate on a net basis.

The Group does not hedge account for its interest rate swaps and states them at fair value, with changes in fair value included in the statement of comprehensive income.The gain in the statement of comprehensive income for the year on the fair value of interest rate derivatives was £719,000 (2016: loss of £4,000).

The fair value of the above derivatives at 31 March 2017 was a liability of £2,964,000 (2016: liability of £3,683,000).

D. Interest rate sensitivity analysis

In managing interest rate risks the Group aims to reduce the impact of short-term fluctuations on the Group's earnings, without jeopardising its flexibility. Over the longer term, permanent changes in interest rates may have an impact on consolidated earnings.

At 31 March 2017, it is estimated that an increase of 0.25 percentage points in interest rates would have reduced the Group's adjusted profit before tax and net equity by £375,000 (2016: reduced adjusted profit before tax by £388,000) and a decrease of 0.25 percentage points in interest rates would have increased the Group's adjusted profit before tax and net equity by £375,000 (2016: increased adjusted profit before tax by £388,000). The sensitivity has been calculated by applying the interest rate change to the variable rate borrowings, net of interest rate swaps, at the year end.

The Group's sensitivity to interest rates has decreased during the year, with a slight reduction in the amount of floating rate debt.The Board monitors closely the exposure to the floating rate element of our debt.

E. Cash management and liquidity

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Included in note 19 is a description of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.

Shorttermmoneymarket deposits are used tomanage liquiditywhilstmaximising the rate ofreturn on cash resources, giving due consideration to risk.

F. Foreign currency management

The Group does not have any foreign currency exposure.

G. Credit risk

The creditriskmanagement policies ofthe Groupwith respectto trade receivables are discussed in note 16.The Group has no significant concentration of credit risk, with exposure spread over 52,500 customers in our stores.

The creditrisk on liquid funds is limited because the counterparties are bankswith high credit-ratings assigned by international credit-rating agencies.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

18. FINANCIAL INSTRUMENTS (continued)

H. Financial maturity analysis

In respect of interest-bearing financial liabilities, the following table provides a maturity analysis for individual elements.

2017 maturity	Total £000	Less than one year £000	One to two years £000	Two to five years £000	More than five years £000
Aviva loan	89,955	2,356	2,474	8,190	76,935
M&G loan payable at variable rate	35,000	–	–	–	35,000
M&G loan fixed by interest rate derivatives	35,000	–	–	–	35,000
Bank loan payable at variable rate	115,000	–	–	115,000	–
Debt fixed by interest rate derivatives	30,000	–	–	30,000	–
Total	304,955	2,356	2,474	153,190	146,935

	Total	Less than one year	One to two years	Two to five years	More than five years
2016 maturity	£000	£000	£000	£000	£000
Aviva loan	92,198	2,243	2,356	7,799	79,800
M&G loan payable at variable rate	35,000	–	–	–	35,000
M&G loan fixed by interest rate derivatives	35,000	–	–	–	35,000
Bank loan payable at variable rate	120,000	–	–	120,000	–
Debt fixed by interest rate derivatives	30,000	–	–	30,000	–
Total	312,198	2,243	2,356	157,799	149,800

I. Fair values of financial instruments

The fair values of the Group's cash and short term deposits and those of other financial assets equate to their book values. Details of the Group's receivables at amortised cost are set out in note 16. The amounts are presented net of provisions for doubtful receivables, and allowances for impairment are madewhere appropriate.Trade and other payables, including bank borrowings, are carried at amortised cost. Finance lease liabilities are included at the fair value of their minimum lease payments. Derivatives are carried at fair value.

For those financial instruments held at valuation, the Group has categorised them into a three level fair value hierarchy based on the priority of the inputs to the valuation technique in accordance with IFRS 7.The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels ofthe hierarchy,the category level is based on the lowest priority level inputthatis significantto the fair value measurement ofthe instrument in its entirety.The fair value ofthe Group's outstanding interestrate derivative, as detailed in note 18C, has been estimated by calculating the present value of future cash flows, using appropriate market discount rates, representing Level 2 fair value measurements as defined by IFRS 7.There are no financial instruments which have been categorised as Level 1 or Level 3.

18. FINANCIAL INSTRUMENTS (continued)

J. Maturity analysis of financial liabilities

The contractual maturities based on market conditions and expected yield curves prevailing at the year end date are as follows:

2017	Trade and other payables £000	Interest rate swaps £000	Borrowings and interest £000	Finance leases £000	Total £000
From five to twenty years	–	127	166,652	25,556	192,335
From two to five years	–	1,493	180,928	6,116	188,537
From one to two years	–	692	11,930	2,039	14,661
Due after more than one year	–	2,312	359,510	33,711	395,533
Due within one year	21,631	816	11,930	2,039	36,416
Total	21,631	3,128	371,440	35,750	431,949

2016	Trade and other payables £000	Interest rate swaps £000	Borrowings and interest £000	Finance leases £000	Total £000
From five to twenty years	–	506	176,296	22,894	199,696
From two to five years	–	1,684	188,517	5,255	195,456
From one to two years	–	675	12,982	1,752	15,409
Due after more than one year	–	2,865	377,795	29,901	410,561
Due within one year	21,045	1,055	12,982	1,752	36,834
Total	21,045	3,920	390,777	31,653	447,395

K. Reconciliation of maturity analyses

The maturity analysis in note 18J shows non-discounted cash flows for all financial liabilities including interest payments.The table belowreconciles the borrowings column in note 19 with the borrowings and interest column in the maturity analysis presented in note 18J.

2017	Borrowings £000	Interest £000	Unamortised borrowing costs £000	Borrowings and interest £000
From five to twenty years	146,935	17,806	1,911	166,652
From two to five years	153,190	26,373	1,365	180,928
From one to two years	2,474	9,456	–	11,930
Due after more than one year	302,599	53,635	3,276	359,510
Due within one year	2,356	9,574	–	11,930
Total	304,955	63,209	3,276	371,440

2016	Borrowings £000	Interest £000	Unamortised borrowing costs £000	Borrowings and interest £000
From five to twenty years	149,800	24,306	2,190	176,296
From two to five years	157,799	29,473	1,245	188,517
From one to two years	2,356	10,626	–	12,982
Due after more than one year	309,955	64,405	3,435	377,795
Due within one year	2,243	10,739	–	12,982
Total	312,198	75,144	3,435	390,777

Notes to the Financial Statements (continued)

Year ended 31 March 2017

19. BORROWINGS

Secured borrowings at amortised cost	31 March 2017 £000	31 March 2016 £000
Current liabilities
Aviva loan	2,356	2,243
	2,356	2,243
Non-current liabilities
Bank borrowings	145,000	150,000
Aviva loan	87,599	89,955
M&G loan	70,000	70,000
Unamortised loan arrangement costs	(3,276)	(3,435)
Total non-current borrowings	299,323	306,520
Total borrowings	301,679	308,763

The weighted average interest rate paid on the borrowings during the year was 3.3% (2016: 3.6%).

The Group has £45,000,000 in undrawn committed bank borrowing facilities at 31March 2017,which expire between four and five years (2016: £20,000,000 expiring between four and five years).

The Group has a £100 million 15 yearfixed rate loanwith Aviva Commercial Finance Limited.The loan is secured over a portfolio of 15 freehold self storage centres.The annual fixed interest rate on the loan is 4.9%.The loan amortises to £60 million over the course of the 15 years.The debt service is payable monthly based on fixed annual amounts. The loan outstanding on the fifth anniversary will be £89.8 million; £76.7 million outstanding on the tenth anniversary, with £60 million remaining at expiry in April 2027.

The Group has a £190 million five year bank facility with Lloyds and HSBC expiring in October 2021. £85 million of the facility is term loan with £105 million revolving.The blendedmargin on the facilitywhen fully drawn is 1.36%. During the year,the Group exercised an option to extend this loan's termby a further year.The Group also has an option to increase the amount of the revolving loan facility by a further £60 million during the course of the loan's term.

The Group has a £70 million seven year loan withM&G Investments Limited, with a bullet repayment in June 2022.The loan is secured over a portfolio of 15 freehold self storage centres. Half of the loan is variable and half is subject to an interest rate derivative for the seven years.

The Groupwas in compliancewith its banking covenants at 31March 2017 and throughoutthe year.Themain covenants are summarised in the table below:

Covenant	Covenant level	At 31 March 2017
Consolidated EBITDA	Minimum 1.5x	6.5x
Consolidated net tangible assets (less goodwill)	Minimum £250m	£888.9m
Bank loan income cover	Minimum 1.75x	10.8x
Aviva loan interest service cover ratio	Minimum 1.5x	3.8x
Aviva loan debt service cover ratio	Minimum 1.2x	2.5x
M&G income cover	Minimum 1.5x	5.9x

19. BORROWINGS (continued)

Interest rate profile of financial liabilities

	Total £000	Floating rate £000	Fixed rate £000	Weighted average interest rate	Period for which the rate is fixed	Weighted average period until maturity
At 31 March 2017 Gross financial liabilities	304,955	150,000	154,955	3.2%	7.0 years	5.9 years
At 31 March 2016 Gross financial liabilities	312,198	155,000	157,198	3.5%	7.3 years	6.3 years

All monetary liabilities, including short term receivables and payables are denominated in sterling.The weighted average interest rate includes the effect of the Group's interest rate derivatives.The Directors have concluded that the carrying value of borrowings approximates to its fair value.

Narrative disclosures on the Group's policy for financial instruments are included within the Strategic Report and in note 18.

20. DEFERRED TAX

Deferred tax assets in respect of share based payments (£0.1 million), interest rate swaps (£0.5 million), corporation tax losses (£4.5 million), capital allowances in excess of depreciation (£0.3million) and capital losses (£1.0million)in respect ofthe non-REITtaxable business have not been recognised due to uncertainty over the projected tax liabilities arising in the short term within the non-REITtaxable business.

21. OBLIGATIONS UNDER FINANCE LEASES

				Present value of
	Minimum lease payments		minimum lease payments
	2017	2016	2017	2016
	£000	£000	£000	£000
Amounts payable under finance leases:
Within one year	2,039	1,752	2,005	1,722
Within two to five years inclusive	8,155	7,007	7,193	6,136
Greater than five years	25,556	22,894	14,403	12,307
	35,750	31,653	23,601	20,165
Less: future finance charges	(12,149)	(11,488)
Present value of lease obligations	23,601	20,165

All lease obligations are denominated in sterling. Interestrates are fixed atthe contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.The carrying amount of the Group's lease obligations approximates their fair value.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

22. SHARE CAPITAL

	Authorised		Called up, allotted and fully paid
	2017 £000	2016 £000	2017 £000	2016 £000
Ordinary shares of 10 pence each	20,000	20,000	15,788	15,737
Movement in issued share capital
Number of shares at 31 March 2015				158,055,735
Cancellation of treasury shares				(1,418,750)
Exercise of share options – Share option schemes				732,302
Number of shares at 31 March 2016				157,369,287
Exercise of share options – Share option schemes				513,580
Number of shares at 31 March 2017				157,882,867

The Company has one class of ordinary shares which carry no right to fixed income.

At 31 March 2017 options in issue to Directors and employees were as follows:

Date option Granted	Option price per ordinary share	Date first exercisable	Date on which the exercise period expires	Number of ordinary shares 2017	Number of ordinary shares 2016
3 August 2009	nil p**	3 August 2012	2 August 2019	–	2,075
12 July 2010	nil p **	12 July 2013	11 July 2020	–	4,781
19 July 2011	nil p **	19 July 2013	19 July 2021	2,400	7,112
11 July 2012	nil p **	11 July 2015	10 July 2022	8,559	15,724
12 March 2013	305.5p *	1 April 2016	1 October 2016	–	31,365
19 July 2013	nil p **	19 July 2016	19 July 2023	78,469	511,821
25 February 2014	442.6p*	1 April 2017	1 October 2017	21,624	23,655
29 July 2014	nil p**	29 July 2017	29 July 2024	485,032	503,591
16 March 2015	494.6p*	1 April 2018	1 October 2018	95,016	101,014
21 July 2015	nil p**	21 July 2018	21 July 2025	379,293	399,117
14 March 2016	608.0p*	1 April 2019	1 October 2019	41,809	49,296
22 July 2016	nil p**	22 July 2019	21 July 2026	402,225	–
15 March 2017	580.0p	1 April 2020	1 October 2020	65,374	–
				1,579,801	1,649,551

* SAYE (see note 23) ** LTIP (see note 23)

OWN SHARES

The own shares reserve represents the cost of shares in Big Yellow Group PLC purchased in the market, and held by the Big Yellow Group PLC Employee BenefitTrust, alongwith shares issued directly to the Employee BenefitTrust. 1,122,907 shares are held in the Employee BenefitTrust(2016: 1,122,907), and no shares are held in treasury.

23. SHARE-BASED PAYMENTS

The Company has three equity share-based payment arrangements, namely an LTIP scheme (with approved and unapproved components), an Employee Share Save Scheme ("SAYE") and a Long Term Bonus Performance Plan.The Group recognised a total expense in the year related to equity-settled sharebased payment transactions of £2,324,000 (2016: £2,539,000).

Equity-settled share option plans

Since 2004 the Group has operated an Employee Share Save Scheme ("SAYE") which allows any employee who has more than six months service to purchase shares at a 20% discount to the average quoted market price of the Group shares at the date of grant. The associated savings contracts are three years atwhich pointthe employee can exercise their option to purchase the shares ortake the amount saved, including interest, in cash.The scheme is administered by Yorkshire Building Society.

On an annual basis since 2004 the Group awarded nil-paid options to senior management under the Group's Long Term Incentive Plan ("LTIP").The awards are conditional on the achievement of challenging performance targets as described on page 78 of the Remuneration Report.The awards granted in 2004, 2005 and 2006 vested in full.The awards granted in 2007 and 2009 lapsed, and the awards granted in 2008 and 2010 partially vested.The awards granted in 2011, 2012 and 2013 fully vested.The weighted average share price at the date of exercise for options exercised in the year was £7.38 (2016: £7.04).

LTIP scheme	2017 No. of options	2016 No. of options
Outstanding at beginning of year	1,444,221	1,662,358
Granted during the year	455,331	468,546
Lapsed during the year	(59,094)	(46,728)
Exercised during the year	(484,480)	(639,955)
Outstanding at the end of the year	1,355,978	1,444,221
Exercisable at the end of the year	89,428	29,692

The weighted average fair value of options granted during the year was £1,017,000 (2016: £976,000).

Employee Share Save Scheme ("SAYE")	2017 No. of options	2017 Weighted average exercise price (£)	2016 No. of options	2016 Weighted average exercise price (£)
Outstanding at beginning of year	205,330	4.87	255,853	3.74
Granted during the year	65,374	6.08	49,296	6.08
Forfeited during the year	(17,781)	4.65	(7,472)	4.65
Exercised during the year	(29,100)	2.40	(92,347)	2.40
Outstanding at the end of the year	223,823	4.87	205,330	4.87
Exercisable at the end of the year	–	–	–	–

Options outstanding at 31 March 2017 had a weighted average contractual life of 2.1 years (2016: 2.2 years).

The inputs into the Black-Scholes model for the options granted during the year are as follows:

	LTIP	SAYE
Expected volatility	30%	26%
Expected life	3 years	3 years
Risk-free rate	0.1%	0.1%
Expected dividends	3.9%	3.9%

Expected volatility was determined by calculating the historical volatility of the Group's share price over the year prior to grant.

Long Term bonus performance plan

The Executive Directors receive awards under the Long Term Bonus Performance Plan.This is accounted for as an equity instrument.The plan was set up in July 2015. The vesting criteria and scheme mechanics are set out in the Directors' Remuneration Report. At 31 March 2017 the weighted average contractual life was 1.3 years.

Notes to the Financial Statements (continued)

Year ended 31 March 2017

24. CAPITAL COMMITMENTS

At 31 March 2017 the Group had £8.6 million of amounts contracted but not provided in respect of the Group's properties (2016: £0.4 million of capital commitments).

25. EVENTS AFTER THE BALANCE SHEET DATE

On 19 May 2017, the Group acquired a property in Wapping, London for £10.75 million.

26. RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries,which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Transactions with Armadillo Storage Holding Company Limited

As described in note 13, the Group has a 20% interest in Armadillo Storage Holding Company Limited ("Armadillo 1"), and entered into transactions with Armadillo 1 during the period on normal commercial terms as shown in the table below.

Transactions with Armadillo Storage Holding Company 2 Limited

As described in note 13, the Group has a 20% interest in Armadillo Storage Holding Company 2 Limited ("Armadillo 2"), and entered into transactions with Armadillo 2 during the period on normal commercial terms as shown in the table below.

	31 March 2017 £000	31 March 2016 £000
Fees earned from Armadillo 1	574	414
Fees earned from Armadillo 2	253	291
Balance due from Armadillo 1	86	103
Balance due from Armadillo 2	48	89

The remuneration of the Executive and Non-Executive Directors, who are the key management personnel of the Group, is set out below in aggregate. Further information on the remuneration of individual Directors is found in the audited part of the Directors' Remuneration Report on pages 75 to 83.

	31 March 2017 £000	31 March 2016 £000
Short term employee benefits	1,325	1,316
Post-employment benefits	151	148
Share based payments	1,566	1,973
	3,042	3,437

AnyJunk Limited

James Gibson is a Non-Executive Director and shareholder in AnyJunk Limited and Adrian Lee is a shareholder in AnyJunk Limited. During the year AnyJunk Limited provided waste disposal services to the Group on normal commercial terms, amounting to £36,000 (2016: £24,000).

No other related party transactions took place during the years ended 31 March 2017 and 31 March 2016.

Company Balance Sheet

Year ended 31 March 2017

	Note	2017 £000	2016 £000
Non-current assets
Plant, equipment and owner-occupied property	29a	1,840	1,890
Investment in subsidiary companies	29b	18,020	15,696
		19,860	17,586
Current assets
Trade and other receivables	30	481,294	528,125
Derivative financial instruments	32	297	–
Cash and cash equivalents		1	1
		481,592	528,126
Total assets		501,452	545,712

Current liabilities
Trade and other payables	31	(3,137)	(3,075)
		(3,137)	(3,075)

Non-current liabilities
Derivative financial instruments Bank borrowings	32 32	– (143,635)	(315) (148,755)

		(143,635)	(149,070)
Total liabilities		(146,772)	(152,145)
Net assets		354,680	393,567
Equity
Share capital	22	15,788	15,737
Share premium account		45,462	45,227
Reserves	27	293,430	332,603
Equity shareholders' funds		354,680	393,567

The Company reported a loss for the financial year ended 31 March 2017 of £0.3 million (2016: loss of £0.3 million).The financial statements were approved by the Board of Directors and authorised for issue on 22 May 2017.They were signed on its behalf by:

James Gibson John Trotman Director Director Company Registration No. 03625199

Company Cash Flow Statement

Year ended 31 March 2017

	2017 £000	2016 £000
Operating loss	(949)	(939)
Depreciation	53	41
Decrease in receivables	46,831	77,979
(Increase)/decrease in payables	(73)	370
Cash generated by operations	45,862	77,451
Interest paid	(3,572)	(4,293)
Interest received	3,585	4,249
Cash flows from operating activities	45,875	77,407
Purchase of non-current assets	(3)	(374)
Cash flows from investing activities	(3)	(374)
Financing activities
Issue of share capital	286	378
Equity dividends paid	(41,158)	(36,443)
Repayment of Lloyds short term loan	–	(70,000)
(Decrease)/increase in borrowings	(5,000)	29,000
Cash flows from financing activities	(45,872)	(77,065)
Net movement in cash and cash equivalents	–	(32)
Opening cash and cash equivalents	1	33
Closing cash and cash equivalents	1	1

Company Statement of Changes in Equity

Year ended 31 March 2017

	Share capital £000	Share premium account £000	Other non- distributable reserve £000	Capital redemption reserve £000	Retained earnings £000	Own shares £000	Total £000
At 1 April 2016	15,737	45,227	74,950	1,795	256,877	(1,019)	393,567
Total comprehensive loss for the year	–	–	–	–	(339)	–	(339)
Dividend	–	–	–	–	(41,158)	–	(41,158)
Issue of share capital	51	235	–	–	–	–	286
Credit to equity for equity-settled
share based payments	–	–	–	–	2,324	–	2,324
At 31 March 2017	15,788	45,462	74,950	1,795	217,704	(1,019)	354,680

The Company's share capital is disclosed in note 22.

The own shares balance represents amounts held by the Employee BenefitTrust(see note 22).

Year ended 31 March 2016

	Share capital £000	Share premium account £000	Other non- distributable reserve £000	Capital redemption reserve £000	Retained earnings £000	Own shares £000	Total £000
At 1 April 2015	15,806	44,922	74,950	1,653	295,684	(5,623)	427,392
Total comprehensive loss for the year	–	–	–	–	(299)	–	(299)
Dividend	–	–	–	–	(36,443)	–	(36,443)
Issue of share capital	73	305	–	–	–	–	378
Cancellation of treasury shares	(142)	–	–	142	(3,727)	3,727	–
Use of own shares to satisfy share options	–	–	–	–	(877)	877	–
Credit to equity for equity-settled
share based payments	–	–	–	–	2,539	–	2,539
At 31 March 2016	15,737	45,227	74,950	1,795	256,877	(1,019)	393,567

Notes to the Financial Statements

Year ended 31 March 2017

27. LOSS FOR THE YEAR

As permitted by section 408 of the Companies Act 2006, the statement of comprehensive income of the Company is not presented as part of these financial statements. The loss for the year attributable to equity shareholders dealt with in the financial statements of the Company was £0.3 million (2016: loss of £0.3 million).

28. BASIS OF ACCOUNTING

The separate financial statements ofthe Company are presented as required by the Companies Act 2006. As permitted by that Act,the separate financial statements have been prepared in accordance with International Financial Reporting Standards.

The financial statements have been prepared on the historic cost basis except that derivative financial instruments are stated at fair value.

The Company's principal accounting policies are the same as those applied in the Group financial statements. See note 23 for details of share based payments affecting the Company.

Going concern

See note 2 for the review of going concern for the Group and the Company.

IFRIC 11, IFRS 2 Group and Treasury Share Transactions

The Companymakes equity settled share based payments to certain employees of certain subsidiary undertakings. Equity settled share based payments that aremade to the employees ofthe Company's subsidiaries are treated as increases in equity overthe vesting period ofthe award,with a corresponding increase in the Company's investments in subsidiaries, based on an estimate of the number of shares that will eventually vest.This is the only addition to investment in subsidiaries in the current year.The Company does not have any employees.

29. NON-CURRENT ASSETS

a) Plant, equipment and owner occupied property

	Freehold property £000	Leasehold improvements £000	Fixtures, fittings & office equipment £000	Total £000
Cost
At 31 March 2016	2,183	64	30	2,277
Additions	3	–	–	3
At 31 March 2017	2,186	64	30	2,280
Accumulated depreciation
At 31 March 2016	(367)	(18)	(2)	(387)
Charge for the year	(41)	(2)	(10)	(53)
At 31 March 2017	(408)	(20)	(12)	(440)
Net book value
At 31 March 2017	1,778	44	18	1,840
At 31 March 2016	1,816	46	28	1,890

b) Investments in subsidiary companies

	Investment in subsidiary undertakings £000
Cost
At 31 March 2016	15,696
Additions	2,324
At 31 March 2017	18,020

29. NON-CURRENT ASSETS (continued)

b) Investments in subsidiary companies (continued)

The Group subsidiaries are all wholly-owned, the Group holds 100% of the voting power and the companies are incorporated, registered and operate in England and Wales.The registered office of all subsidiaries is 2 The Deans, Bridge Road, Bagshot, Surrey, GU19 5AT.The subsidiaries at 31 March 2017 are listed below:

Name of subsidiary	Principal activity
.Big Yellow Self Storage (GP) Limited	General Partner
.Big Yellow Self Storage Company Limited	Self storage
Big Yellow (Battersea) Limited	Self storage
Big Yellow Construction Company Limited	Construction management
Big Yellow Holding Company Limited	Holding Company
Big Yellow Limited Partnership	Self storage
Big Yellow Nominee No 1 Limited	Dormant
Big Yellow Nominee No 2 Limited	Dormant
Big Yellow Self Storage (Chester) Limited	Self storage
Big Yellow Self Storage Company 1 Limited	Dormant
Big Yellow Self Storage Company 2 Limited	Dormant
Big Yellow Self Storage Company 3 Limited	Dormant
Big Yellow Self Storage Company 4 Limited	Dormant
Big Yellow Self Storage Company 6 Limited	Dormant
Big Yellow Self Storage Company 8 Limited	Self storage
Big Yellow Self Storage Company A Limited	Self storage
Big Yellow Self Storage Company M Limited	Self storage
BYRCo Limited	Property management
BYSSCo A Limited	Dormant
BYSSCo Limited	Self storage
Kator Storage Limited	Self storage
Last Mile Company Limited	Holding Company
Lock and Leave Limited	Self storage
Lock and Leave (Twickenham) Limited	Self storage

In addition the Group has a 100% interest in Pramerica Bell InvestmentTrust Jersey, a trust registered in Jersey.

The Group has a 20% interest in two associates, and the companies are incorporated, registered and operate in England and Wales.The Company's associates at 31 March 2017 are listed below:

Name of associate	Principal activity
Armadillo Storage Holding Company Limited	Self Storage
Armadillo Storage Holding Company 2 Limited	Self Storage

Audit exemption statement

Foritsmostrecent year end the companies listed belowwere entitled to exemption fromaudit under section 479A ofthe Companies Act 2006 relating to subsidiary companies.The members ofthese companies have notrequired them to obtain an audit oftheirfinancial statements forthe year ended 31 March 2017.

.Big Yellow Self Storage (GP) Limited Big Yellow Construction Company Limited Big Yellow Holding Company Limited Big Yellow Self Storage (Chester) Limited Big Yellow Self Storage Company 8 Limited BYRCo Limited BYSSCo Limited Kator Storage Limited Last Mile Company Limited Lock and Leave Limited Lock and Leave (Twickenham) Limited

Notes to the Financial Statements (continued)

Year ended 31 March 2017

30. TRADE AND OTHER RECEIVABLES

	31 March	31 March
	2017	2016
	£000	£000
Amounts owed by Group undertakings	481,188	528,015
Prepayments and accrued income	106	110
	481,294	528,125

31. TRADE AND OTHER PAYABLES

	31 March 2017 £000	31 March 2016 £000
Current
Other payables	2,992	2,675
Accruals and deferred income	145	400
	3,137	3,075

32. BANK BORROWINGS AND FINANCIAL INSTRUMENTS

Interest rate derivatives

The Company has one interest rate swap in place at the year end; £30 million fixed at 0.4% (excluding the margin on the underlying debt instrument) until October 2021. The floating rate at 31 March 2017 was paying a weighted average margin of 1.37% above one month LIBOR, the fixed rate debt was paying a margin of 1.5%.The Group's policy on risk management is set out in the Report on Corporate Governance on page 66 and in note 18.

	31 March 2017 £000	31 March 2016 £000
Bank borrowings Unamortised loan arrangement fees	145,000 (1,365)	150,000 (1,245)
	143,635	148,755

Maturity profile of financial liabilities

	2017	2016
	Financial	Financial
	liabilities	liabilities
	£000	£000
Between one and two years	–	–
Between two and five years	145,000	150,000
Gross financial liabilities	145,000	150,000

The fair value of interest rate derivatives at 31 March 2017 was an asset of £297,000 (2016: liability of £315,000). See note 18 for detail of the interest rate profile of financial liabilities.

33. FINANCIAL INSTRUMENTS

The disclosure relating to the Company's financial instruments are detailed in note 18 to the Group financial statements.These disclosures are relevant to the Company's bank borrowings and derivative financial instruments. In addition, the Company has trade and other payables of £3,137,000 in the current year(2016: £3,075,000), which are held at amortised cost in the financial statements.

34. RELATED PARTY TRANSACTIONS

Includedwithin these financial statements are amounts owing fromGroup undertakings of £481,188,000 (2016: £528,015,000), including intercompany interest receivable of £3,585,000 (2016: £4,249,000).

Ten Year Summary

Year ended 31 March 2017

Results	2017 £000	2016 £000	2015 £000	2014 £000	2013 £000	2012 £000	2011 £000	2010 £000	2009 £000	2008 £000
Revenue	109,070	101,382	84,276	72,196	69,671	65,663	61,885	57,995	58,487	56,870
Operating profit before gains and losses on property assets	65,316	59,854	48,420	39,537	37,454	35,079	32,058	29,068	30,946	29,342
Cash flow from operating activities	55,974	55,467	42,397	32,752	30,186	27,388	23,534	19,063	10,203	14,388
Profit/(loss) before taxation	99,783	112,246	105,236	59,848	31,876	(35,551)	6,901	10,209	(71,489)	102,618
Adjusted profit before taxation	54,641	48,952	39,405	29,221	25,471	23,643	20,207	16,514	13,791	15,006
Net assets	890,350	829,387	750,914	594,064	552,628	494,500	544,949	547,285	502,317	580,886
EPRA earnings per share Declared total dividend per share	34.5p 27.6p	31.1p 24.9p	27.1p 21.7p	20.5p 16.4p	19.3p 11.0p	18.2p 10.0p	15.5p 9.0p	13.0p 4.0p	11.9p 0p	11.7p 9.5p
Key statistics
Number of stores open Sq ft occupied (000) Occupancy increase	73 3,551	71 3,363	69 3,178	66 2,832	66 2,632	65 2,458	62 2,130	60 1,915	54 1,775	48 1,850
in year 000 sq ft) Number of customers Average number of employees	188 52,500	185 50,000	346 47,250	200 41,800	174 38,500	328 36,300	215 32,800	140 30,500	(75) 28,500	15 30,500
during the year	329	318	300	289	286	279	273	252	239	218

The paper used in this report is produced with FSC® mixed sources pulp which is partially recyclable, biodegradable, pH Neutral, heavy metal absence and acid-free. It is manufactured within a mill which complies with the international environmental ISO 14001 standard.

Pureprint Ltd is FSC certified, PEFC certified and ISO 14001 certified showing that it is committed to all round excellence and improving environmental performance is an important part of this strategy. We aim to reduce at source the effect our operations have on the environment, and are committed to continual improvement, prevention of pollution and compliance with any legislation or industry standards.

Pureprint Ltd is a Carbon Neutral® Printing Company.

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You can access more information about us on our website

bigyellow.co.uk

2 The Deans, Bridge Road, Bagshot, Surrey GU19 5AT

Tel: 01276 470190 Fax: 01276 470191 e-mail: [email protected]

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Big Yellow Group PLC — Annual Report 2017

4821_10-k_2017-03-31_7db0a57b-2215-44e3-a42b-1f5b342fc862.pdf

Big Yellow Group PLC

WELCOME

We continue to deliver year on year growth in all of our key operating

HIGHLIGHTS OF THE YEAR

FINANCIAL HIGHLIGHTS

CONTINUED GROWTH

A Year of Further Achievement

Nicholas Vetch, Executive Chairman of Big Yellow, commented:

DRIVING OCCUPANCY, REVENUE AND CASH FLOW GROWTH

Our Competitive Advantage

The things that set us apart

WE PUT THE CUSTOMER AT THE HEART OF OUR BUSINESS

Reasons For Using Big Yellow

Our Marketplace

STRONG GROWTH OPPORTUNITIES

Innovation

Always looking to the future

CONTINUALLY IMPROVING OUR DIGITAL PLATFORMS

Security

Ensuring our customers have peace of mind

THE HIGHEST LEVELS OF SECURITY IN THE UK SELF STORAGE INDUSTRY

Our Portfolio

An extensive national network

HIGHLY VISIBLE STORES REINFORCE OUR BRAND 24/7

Our Unrivalled Service

A Brand based on People

OUR PEOPLE ARE OUR MOST IMPORTANT ASSET

CONTENTS

Growth

Of Revenue and Earnings

Financial results

Investment in new capacity

Dividends

Our people

Board

Outlook

Nicholas Vetch

Strategic Report (continued)

Our Strategic Report

discusses the following areas:

Approval

Our Strategy

Our Business Model

Strategic Report (continued)

Our Strategy and Business Model (continued)

The self storage market

KPIs

Operational and Marketing Review

Overview

Operations

Demand

Strategic Report (continued)

Our Strategy and Business Model (continued)

Marketing and ecommerce

Online

Online customer reviews

Driving online traffic

Social media

PR

Budget

Cyber security

Strategic Report (continued)

Portfolio Summary – Big Yellow Stores

Our Portfolio

Portfolio Summary – Armadillo Stores

Strategic Report (continued)

Store Performance

Pricing and rental yield

Lock and Leave acquisition

Armadillo Self Storage

Development pipeline

Strategic Report (continued)

Store Performance (continued)

LIKE-FOR-LIKE REVENUE FOR THE YEAR WAS £107.3 MILLION, AN INCREASE OF 6% FROM THE PRIOR YEAR.

Delivering Results

Financial results

Revenue

Big Yellow Group PLC Annual Report 2017