Shurgard Self Storage Limited · EURONEXT:SHUR
Shurgard Self Storage — Investor Presentation (September 2024)
62 slides from Shurgard Self Storage's investor presentation, Sep 9, 2024
Slide 1: Europe's Leading Brand of Self-Storage Solutions
September, 2024 EUROPE’S LEADING BRAND OF SELF-STORAGE SOLUTIONS
Slide 2: Agenda
AGENDA 1. YTD June 2024 Performance and Strategy Review 2. Key Strategic & Operational Highlights 3. Shurgard Acquired Lok’nStore 4. Financial Review 5. Outlook and Medium-Term Guidance 6. Appendices 2
Slide 3: YTD June 2024 Performance and Strategy Review
1| YTD JUNE 2024 PERFORMANCE AND STRATEGY REVIEW 3
Slide 4: Shurgard Is a Unique Platform with Significant Runway
SHURGARD IS A UNIQUE PLATFORM WITH SIGNIFICANT RUNWAY • Operational execution excellence • Raise of our FY revenue guidance • Growth across all markets • Digitalization and leading operational platform • Growth accelerated • Acquisition of Lok’nStore (UK), a modern, purpose-built portfolio and attra
Slide 5: YTD Jun 2024 Strong Execution and Growth
YTD JUN 2024 STRONG EXECUTION AND GROWTH €1,047m planned investment in 1.4m rentable sqm Sector sustainability leader5 projects2 +365,000 sqm Property Operating +8.2% € 4.3 bn €189.3m c. 26% of net rentable 5 star GRESB score with a leading Revenue yoy growth1 sqm Enterprise Value3 score of 91 out o
Slide 6: Proven Model, Best in Class Self-Storage Platform
PROVEN MODEL, BEST IN CLASS SELF-STORAGE PLATFORM Supportive Customer Resilient Model Strong Branding Prop-Tech Platform Dynamics4 89.5% -0.5pp #1 brand recognition2 Driving digital data • 62 month average stay • 90% of prospects connecting via digital • Increasing revenue through price Same store i
Slide 7: Industry Continues to Have Long Term Growth Prospects
INDUSTRY CONTINUES TO HAVE LONG TERM GROWTH PROSPECTS Shurgard’s footprint results in leading position in capital cities Long term growth perspective Self storage sq ft. per capita in 2023 self storage area (sq ft. per capita)1 our 7 markets versus the US 2 Self Storage Capital City sq ft. per capit
Slide 8: Our Successful ESG Strategy
OUR SUCCESSFULL ESG STRATEGY Our Commitments ESG Priorities Strong Ratings Invest to reduce our carbon footprint 91/100 Net Zero Carbon by 2030 Green certified buildings, LED, heat pumps, solar panels, (operational NZC) Building Management System Strong ESG governance 10.8 Low Risk ISO-aligned EMS,
Slide 9: Key Strategic & Operational Highlights
2| KEY STRATEGIC & OPERATIONAL HIGHLIGHTS
Slide 10: Unique Prime Portfolio
UNIQUE PRIME PORTFOLIO 186 187 76 As of March 31, 2024 18 stores Focus on capital cities and major cities • Markets chosen for their demographics and urban density are located in other cities not highlighted on the map. « Major cities » defined as non-capital cities with a certain level of populatio
Slide 11: Highest Occupancy Rates in Europe
HIGHEST OCCUPANCY RATES IN EUROPE Strong average same store 1 occupancy growth… Strong Occupancy growth 90.3% 90.4% • Average same store occupancy rate rose 1.4pp since 2020 89.7% 89.5% • 10 year same store average occupancy rate 89%, highly resilient 88.1% through crises • Trends towards longer ter
Slide 12: Strong Rental Growth Across All Markets
STRONG RENTAL GROWTH ACROSS ALL MARKETS Strong average same store 1 in-place rent (€/sqm/year) growth Strong Rate growth 275 262 248 • Portfolio average Same Store In-Place Rent grew by 25% versus 228 2020 220 • The UK saw the largest increase over the period at c.38% 2020 2021 2022 2023 2024 • Digi
Slide 13: Optimized Digital Platform
OPTIMIZED DIGITAL PLATFORM Enhancing the customer proposition… …while driving margin expansion Web Leads & Mobile Share Customer Centric Digitalization Better operating efficiency 180,000 90% 160,000 80% 140,000 70% 120,000 60% • Improved customer service: Google • Increased data for revenue 100,000
Slide 14: Delivering the Digital Customer Experience
DELIVERING THE DIGITAL CUSTOMER EXPERIENCE Finding a Space Lease Execution Account Management Daily Property Use Website Digital Rental Comprehensive Digital Property Access1 ~50% Mobile App of moves-in Agreement E-rental penetration (as of June 30) 60% 50% Enabling customer access and Industry-lead
Slide 15: 3 Levers to Accelerate Our Portfolio Expansion
3 LEVERS TO ACCELERATE OUR PORTFOLIO EXPANSION LEVER 1 LEVER 2 LEVER 3 Re-developments New Developments Market Consolidation (expand existing buildings) (purpose built and conversion) (bolt-on acquisitions) Increase our footprint by 90,000 sqm p.a.: • Invest c.€200 million p.a. • Doubling our footpr
Slide 16: Largest Sqm Expansion p.a. in the Industry
LARGEST SQM EXPANSION P.A. IN THE INDUSTRY In thousands sqm % of 2023 rentable sqm A = Actuals F = Forecast (excluding future acquisitions) VERY LARGE PIPELINE, OVERDELIVERING OUR GUIDANCE 16
Slide 17: Redevelopments: Leveraging Our Freeholds
REDEVELOPMENTS: LEVERAGING OUR FREEHOLDS LEVER 1 LEVER 2 LEVER 3 2022 2023 2024 2025/2026 1 5 6 4 building buildings buildings buildings Total cost: Total cost: Total cost: Total cost: €0.9 million €9.6 million €19.6 million €20.5 million Total additional Total additional Total additional Total addi
Slide 18: New Developments: Key Growth Lever
NEW DEVELOPMENTS: KEY GROWTH LEVER LEVER 1 LEVER 2 LEVER 3 Potential additional properties based on London penetration in Shurgard countries FR - Paris 143 DE - NRW1 Koln-Dusseldorf-… 133 Typical process UK – FR – DE – NL: NL - Randstad 2 49 From agreement with seller on price DE - Berlin 33 + 6 mon
Slide 19: Market Consolidation: Our Targeted Approach
MARKET CONSOLIDATION: OUR TARGETED APPROACH LEVER 1 LEVER 2 LEVER 3 Note: All data presented are 2015 – Present Unique & Disciplined 2023 2024 …targeting a fragmented market with multiple opportunities M&A Strategy… achievements achievements FOCUS AREA 99 “ BOLT ON” Large & ACQUIRED STORES 5 STORES
Slide 20: Top Operators in Europe
TOP 18 OPERATORS IN EUROPE Size (in sqm) 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 All companies are at group level including pipeline Based on Shurgard estimates A STRONG NUMBER ONE POSITION FOR SHURGARD IN A FRAGMENTED INDUSTRY 20
Slide 21: Capital Raise – €300 Million ABB Deployment
CAPITAL RAISE – €300 MILLION ABB DEPLOYMENT • Disciplined execution of our growth strategy, deploying in fast and efficient succession the €300 million raised in November 2023; • Capital Raise is earnings accretive after being €300m €97.6m €131.8m deployed; total costs of acquisition total costs of
Slide 22: German Growth Strategy: Double Our Size
GERMAN GROWTH STRATEGY: DOUBLE OUR SIZE From 25 stores (or 130,000 sqm) mid-2023 to 3 stores 47 stores (or 254,000 sqm) by end 2026 to 6 stores Growth Acceleration in Germany 6 stores 3 stores to 11 stores • c. 80% in “Big Seven” cities, with strong demographics and urban to 4 stores density Out of
Slide 23: Sustainability at the Core of Our Buildings Lifecycle
SUSTAINABILITY AT THE CORE OF OUR BUILDINGS LIFECYCLE Other Investments ISO 14001 aligned EMS, Building Management Systems (BMS): sensors, computers, … Customer safety Lobbies protection Access control Improved CCTV Access via App Reduce electricity and gas consumption LED lighting Heating optimizat
Slide 24: Commitment to Our Stakeholders
COMMITMENT TO OUR STAKEHOLDERS Social Governance Board Diversity Focused on Employee 6+ Global charity ESG is in our DNA Welfare partners • 4.7/5.0 Glassdoor review score • ESG commitment is driven from 55% 44% the Board and the CEO 9 Board • New employee training program members (on diversity, equi
Slide 25: Shurgard Acquired Lok'nStore
3| SHURGARD ACQUIRED LOK’NSTORE
Slide 26: Acquisition of Lok'nStore – Modern, High Quality Portfolio and Pipeline
ACQUISITION OF LOK’NSTORE – A MODERN, HIGH QUALITY, PURPOSE- BUILT PORTFOLIO AND ATTRACTIVE PIPELINE BASILDON Successfully BEDFORD HEMEL HEMPSTEAD acquired leasehold (August 2024) KETTERING PETERBOROUGH STAINES STEVENAGE WARRINGTON WELLINGBOROUGH ACQUISITION PROVIDES AN ADDITIONAL 171,000 SQM REPRES
Slide 27: High-Quality Portfolio
HIGH-QUALITY PORTFOLIO Portfolio characteristics (excl. management contract, including pipeline) Freehold (% of sqm) Purpose built Modern Average sqm Average unit size 82% 76% 43% c. 5,000 sqm 6.9 sqm (Built since Jan 2022 vs c. 13% for (vs. c. 5.0 sqm for Shurgard) (vs. 93% for Shurgard) (vs. 63% f
Slide 28: Attractive Underlying Market Dynamics and Demographics
ATTRACTIVE UNDERLYING MARKET DYNAMICS AND DEMOGRAPHICS HIGHLY CONCENTRATED AND EFFICIENT PORTFOLIO STRONG DEMOGRAPHICS AND MARKET DYNAMICS LOKN Owned (Operating and Pipeline) LOKN Stores under management contract London / South East / (Operating and Pipeline) London Manchester Proportion in Capital
Slide 29: Achieving a Lok'nStore NOI Yield of 8% via Shurgard
ACHIEVING A LOK’NSTORE NOI YIELD OF 8% VIA SHURGARD Revenue increase (1) Proven growth in Shurgard UK Occupancy c. 67% 90% in 2 years All Stores as of August 1 400 owned Rate (CAGR to 383.4 stabilization) 2% in 5-6 years 380 CAGR: +9% 360 348.8 340 320 313.3 in 2 years Occupancy 0% 90% post store op
Slide 30: Operational Integration Completed
OPERATIONAL INTEGRATION COMPLETED •Integration of validated data into our CRM system as of D+1 (August 1) Successful •Integration on our website as of D+1 (August 1) Integration •Integration on our pricing model with promotions in place Focus on Growth •E-rental availability as of D+2 (50% of move-i
Slide 31: 2024 Outlook
2024 OUTLOOK FUTURE LOK’NSTORE ACQUISITION IMPACT: • Q3-2024 Financial communication will be the first quarter incorporating former Lok’nStore portfolio being consolidated as of August 1; • Accretion on Shurgard adjusted EPRA earnings per share: neutral in 2025 and accretive from 2026 onwards; • We
Slide 32: Financial Review
4| FINANCIAL REVIEW
Slide 33: Income Statement
INCOME STATEMENT Q2 H1 2024 2023 % var. % var.CER 2024 2023 % var. % var.CER REAL ESTATE OPERATING REVENUE 1 96.0 87.6 9.5% 9.2% 189.4 174.4 8.6% 8.2% Real estate operating expenses (30.5) (27.6) 10.6% 10.1% (70.2) (63.9) 9.8% 9.4% NET INCOME FOR REAL ESTATE OPERATIONS 65.5 60.0 9.1% 8.8% 119.2 110.
Slide 34: Same Store Property Operating Revenue
SAME STORE PROPERTY OPERATING REVENUE In € millions Q2 H1 % % (at actual exchange rate) 2024 2023 % var. 2024 2023 % var. var.CER var.CER France 20.2 19.6 3.0% 3.0% 40.2 39.4 2.0% 2.0% The Netherlands 18.9 17.9 6.0% 6.0% 37.6 35.3 6.5% 6.5% UK 17.8 16.5 7.5% 5.5% 35.3 32.7 8.0% 5.3% Sweden 11.1 11.1
Slide 35: H1 2024 NOI Evolution
H1 2024 NOI EVOLUTION H1 2023 ⎯ H1 2024 NOI1 bridge (€m) NOI growth (at CER): +7.5% NOI growth: +7.9% Linked to SEK and GBP 4.9 3.4 0.3 119.1 110.3 Ramp-up phase of our non same Opex under control store portfolio Same store NOI growth (constant FX rate): +4.5% Addition of 15 properties ver
Slide 36: Cash Flow
CASH FLOW In € millions H1 2024 H1 2023 % var At actual exchange rate Cash: beginning balance 258.1 87.3 195.5% TOTAL CASH FROM OPERATIONS 78.4 96.2 -18.4% €209.6m Acquisitions -127.7 -0.2 N/A Net Cash end of June 2024 Developments, redevelopments and other -47.2 -46.3 2.0% Other capex -9.9 -13.8 -2
Slide 37: Balance Sheet
BALANCE SHEET In € millions At actual exchange rate Jun 2024 Dec 2023 % var. €800m €130m 2.39% Drawn on a €450m floating Investment property 5,397.7 5,035.8 USPP indebtness (fixed interest committed bank loan Weighted average Other assets 1 62.6 40.3 interest rate) facility interest rate No encumber
Slide 38: First European Self-Storage Operator Awarded BBB+ Rating by S&P
FIRST EUROPEAN SELF-STORAGE OPERATOR AWARDED A BBB+ (STABLE OUTLOOK) CREDIT RATING BY S&P • Assigned 'BBB+' Rating – Stable Outlook • The strong investment grade rating will further widen our access to debt capital markets, incl. rated public • Rating Framework: bond market. Debt / Total Assets: 2
Slide 39: Optional Scrip Dividend Will Be Offered
OPTIONAL SCRIP DIVIDEND WILL BE OFFERED • A gross dividend of €0.58 per share – payment on or about September 26, 2024. • The Board also decided that it will offer shareholders the option of getting cash or shares (“scrip dividend”). • Major shareholders confirmed their intention to opt for shares i
Slide 40: Outlook & Medium-Term Guidance
5| OUTLOOK & MEDIUM-TERM GUIDANCE
Slide 41: 2024 Outlook Excluding Lok'nStore Acquisition
2024 OUTLOOK EXCLUDING LOK’NSTORE ACQUISITION IMPROVED 2024 REVENUE GUIDANCE: • Based on our strong results, the previous guidance of c. 7.5% will be exceeded, and we expect to deliver at least 8% total revenue growth for the year 2024; 2024 GUIDANCE REMINDER: • In 2024, we are targeting a stable NO
Slide 42: Medium Term Guidance
MEDIUM TERM GUIDANCE (EXCLUDING THE POTENTIAL CASH ACQUISITION BY THE COMPANY OF THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF LOK’NSTORE GROUP PLC) • We are targeting c. 6% growth p.a. for all store revenue; • We plan a 0.2pp NOI margin growth per year for all stores; • We plan to add c. 90,0
Slide 43: Conclusion
CONCLUSION Strong business model & Large pipeline for unique platform future growth Diversified asset base and prime locations Investing € 200m per year, +90,000 sqm from 2024 Resilience of our business model 3 Levers of growth times 7 countries Investments in value creating opportunities Extensive
Slide 44: Appendices
6| APPENDICES
Slide 45: Key Patterns: Same Across Countries
KEY PATTERNS: SAME ACROSS COUNTRIES What is self storage Why do they need self storage? Where are they? for our customers? “My attic or basement in a remote location” • Life events (birth, death, divorce, mobility) Close property catchment areas • Short distance catchment combined with • 10min drive
Slide 46: Impact of ABB on Our Liquidity
IMPACT OF ABB ON OUR LIQUIDITY Share day liquidity on European platforms Share day liquidity on Euronext Brussels 15 6 10 x 2.0 4 €5.4m + 82% €2.1m 5 €2.7m €1.2m 2 0 0 May-23 Jul-23 Aug-23 Oct-23 Dec-23 Feb-24 Apr-24 May-23 Jul-23 Aug-23 Oct-23 Dec-23 Feb-24 Apr-24 liquidity (in EURm) ADTV 6m before
Slide 47: Store Portfolio Segmentation
STORE PORTFOLIO SEGMENTATION STORE PORTFOLIO SEGMENTATION # OF STORES Stores developed by Shurgard in operation for more 2019 2020 2021 2022 2023 2024 than three full years as of January, 1st Same-stores Stores acquired by Shurgard in operation for more than one full year as of January, 1st 217
Slide 48: All Store Revenue Growth: 2019 to 2024 Actuals
ALL STORE REVENUE GROWTH: 2019 TO 2024 ACTUALS All Store : quarterly yoy growth All Store 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% -1% 0% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 2019 2020 2021 2022 2023 All Store 6.1% 6.
Slide 49: Same Store Revenue Growth: 2019 to 2024 Actuals
SAME STORE REVENUE GROWTH: 2019 TO 2024 ACTUALS Same Store Same Store : quarterly yoy growth 9% 15% 8% 13% 7% 11% 6% 9% 5% 7% 4% 5% 3% 3% 2% 1% 1% 0% -1% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 2019 2020 2021 2022 2023 Same Store
Slide 50: Customer Dynamics
CUSTOMER DYNAMICS Average length of stay of our existing customers (in months) 1 43 68% 42 66% 41 64% 40 62% 39 38 60% 37 58% 36 56% 35 54% 34 52% 33 32 50% Average length of stay (months) % of contracts > 1 year 1. Same store (changing pool) LENGTH OF STAY STABILIZED SINCE Q3-2023 50
Slide 51: Monthly Move Out Ratio by Month Since 2014
MONTHLY MOVE OUT RATIO BY MONTH SINCE 2014 c. 86% Move out ratio 1 7.5% 7.1% 7.0% 6.9% 6.9% 6.7% 6.5% 6.3% 6.1% 6.0% c. 61% 5.7% 5.6% 5.6% 5.6% 5.5% 5.1% 5.0% 2014 (178 SS) 2015 (187 SS) 2016 (192 SS) 2017 (213 SS) 2018 (214 SS) 2019 (217 SS) 2020 (225 SS) 2021 (228 SS) 2022 (234 SS) 2023 (240 SS) 2
Slide 52: Same Store Average Occupancy by Country
SAME STORE1 AVERAGE OCCUPANCY BY COUNTRY Q2 H1 2024 2023 Diff. 2024 2023 Diff. France 89.3% 89.2% 0.1pp 88.9% 88.8% 0.1pp The Netherlands 90.9% 91.6% -0.6pp 90.9% 91.1% -0.2pp UK 87.1% 87.8% -0.6pp 86.6% 87.7% -1.1pp Sweden 90.9% 91.7% -0.8pp 90.4% 91.3% -1.0pp Germany 88.7% 90.3% -1.6pp 88.9% 90.2%
Slide 53: Same Store Property Average In-Place Rent by Country
SAME STORE1 PROPERTY AVERAGE IN-PLACE RENT BY COUNTRY In € per sqm / year Q2 H1 2024 2023 % var. % var. CER 2024 2023 % var. % var. CER France 271.1 262.8 3.2% 3.2% 270.4 264.4 2.3% 2.3% The Netherlands 243.1 228.8 6.2% 6.2% 242.2 227.5 6.5% 6.5% UK 390.4 356.0 9.7% 7.6% 388.4 352.4 10.2% 7.5% Swede
Slide 54: Platform Scalability: Same Store NOI Margin
PLATFORM SCALABILITY: SAME STORE NOI MARGIN At constant exchange rates Excluding leasehold expense Changing SS pool 68% 67.4% 66% 66.9% 65.9% 64% 64.4% 63.7% 62% 62.0% 60% 60.8% 59.9% 58% 58.1% 57.7% 56% 2014 (178 SS) 2015 (187 SS) 2016 (192 SS) 2017 (213 SS) 2018 (214 SS) 2019 (217 SS) 2020 (225 20
Slide 55: Platform Scalability: Same Store Revenue and Opex per Sqm
PLATFORM SCALABILITY: SAME STORE REVENUE AND OPEX PER SQM At constant exchange rates Excluding leasehold expense Changing SS pool in €/sqm CAGR: +3.0% 290 307.3 288.3 260 266.1 230 248.4 249.0 252.9 241.1 244.5 234.8 236.1 200 170 140 110 93.9 98.8 89.9 90.6 88.5 88.3 86.7 89.6 89.2 90.2 CAGR: +1.0%
Slide 56: Significant Secured Short-Term Pipeline (2024–2026)
SIGNIFICANT SECURED SHORT-TERM PIPELINE (2024–2026) Figures listed in net sqm (000,s) Total +365.0 A flexible and low risk growth plan UK 6.8 72.0 127.6 +206.4 • Pipeline (acquired, developed, under construction or signed) represents: DE 6.6 83.8 32.5 +122.8 - a total investment of €1,047.4m - 26% e
Slide 57: Expansion Pipeline 2024-2026 (26% of Rentable Sqm)
EXPANSION PIPELINE 2024-2026 (26% OF RENTABLE SQM) In € millions Number of Direct project cost At closing rate Jun 2024 Property Region Country Project status 1 Completion date Net sqm (000's) properties /Acquisition cost 2 Scheduled to open in 2024 46 200.7 636.7 Major redevelopments Top Box major
Slide 58: Expansion Pipeline 2024-2026 (26% of Rentable Sqm)
EXPANSION PIPELINE 2024-2026 (26% OF RENTABLE SQM) In € millions Number of Direct project cost At closing rate Jun 2024 Property Region Country Project status 1 Completion date Net sqm (000's) properties /Acquisition cost 2 Scheduled to open in 2026 15 93.2 233.0 Major redevelopments Porte de Cligna
Slide 59: Occupancy Ramp Up: 2015 to Current Developments
OCCUPANCY RAMP UP : 2015 TO CURRENT DEVELOPMENTS Occupancy 100% 2018 openings 90% 2016 openings 2015 openings 2020 openings 2021 openings 2019 openings 80% 2017 openings 70% 2022 openings 60% 50% 40% 30% 20% 10% 0% M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16 M17 M18 M19 M20 M21 M22 M23 M2
Slide 60: Example of Our Proven Strategy in London
EXAMPLE OF OUR PROVEN STRATEGY IN LONDON: (M25) 2014-2023 2014 pool Num b er o f sto res 1 2014: 17 2014 pool 4 11 12 x 2 .4 2023: 40 2014 pool S q m rentab le 2014: 76.4 2014 pool 7 82 38 x 2 .7 (in sqm '000) 2023: 203.0 2014 pool R ented sq m 2014: 69.5 2014 pool 6 58 31 x 2 .3 (in sqm '000) 2023:
Slide 61: NTA, LTV, Net Debt/EBITDA, ICR Evolution Since IPO
NTA, LTV, NET DEBT/ EBITDA, ICR EVOLUTION SINCE IPO (OCT 2018) At actual exchange rate EPRA NET TANGIBLE ASSETS (NTA) LOAN -TO-VALUE (LTV) In € millions 4,308 4,493 18.1% 18.0% 16.9% 17.4% 3,639 15.4% 13.9% 3,113 13.0% 2,260 2,518 2,147 2018 2019 2020 2021 2022 2023 H1 2024 2018 2019 2020 2021 2022
Slide 62: Legal Disclaimer
LEGAL DISCLAIMER All statements in this presentation, other than statements of historical facts, are forward-looking statements. These statements are based on the current expectations and views of future events and developments of the management of Shurgard and are naturally subject to uncertainty a
Shurgard Self Storage — Investor Presentation (September 2024) on 6ix