Shurgard Self Storage Limited · EURONEXT:SHUR
Shurgard Self Storage — FY2023 Earnings Presentation
53 slides from Shurgard Self Storage's earnings presentation, Mar 8, 2024
Slide 1: Europe's Leading Brand of Self-Storage Solutions
March, 2024 EUROPE’S LEADING BRAND OF SELF-STORAGE SOLUTIONS
Slide 2: Agenda
AGENDA 1. YTD Dec 2023 Performance and Strategy Review 2. Key Strategic & Operational Highlights 3. Financial Review 4. Outlook and Medium-Term Guidance 5. Appendices 2
Slide 3: YTD Dec 2023 Performance and Strategy Review
1| YTD DEC 2023 PERFORMANCE AND STRATEGY REVIEW 3
Slide 4: Shurgard Is a Unique Platform with Significant Runway
SHURGARD IS A UNIQUE PLATFORM WITH SIGNIFICANT RUNWAY • Another solid • Strong expansion pipeline • Robust balance sheet, performance representing 231,400 sqm disciplined capital or 17.2% of our net allocation & returns • Proven benefits from rentable sqm geographic spread • Shurgard is a UK REIT •
Slide 5: YTD Dec 2023 Strong Execution and Growth
YTD DEC 2023 STRONG EXECUTION AND GROWTH €630.1m planned investment in 1.4m rentable sqm Sector sustainability leader5 projects2 +231,389 sqm Property Operating +9.0% € 5.0 bn €357.7m 51 projects c. 17.2% of 5 star GRESB score with a leading Revenue yoy growth1 net rentable sqm Enterprise Value3 sco
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 90.4% +0.0pp #1 brand recognition2 Driving digital data • 63 month average stay • 90% of prospects connecting via digital • Increasing revenue through price Same store i
Slide 7: Long Term Growth Prospects Unchanged
LONG TERM GROWTH PROSPECTS UNCHANGED Shurgard’s footprint spans the largest European markets – leading position in capital cities Industry fuelled by positive 2023 self storage area (sq ft. per capita)1 Self storage sq ft. per capita in structural drivers our 7 markets versus the US 2 Self Storage C
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 187 Focus on capital cities and major cities • Markets chosen for their demographics and urban density 275 • 93% of properties are in capital and major cities stores across 7 countries1 • Growth focused on residential housing and commercial mobility • Accelerated strategy base
Slide 11: Highest Occupancy Rates in Europe
HIGHEST OCCUPANCY RATES IN EUROPE Strong average same store 1 occupancy growth… Strong Occupancy growth 90.4% 90.5% 90.4% • Average same store occupancy rate rose 2.5pp since 2019 88.9% • 10 year all store average occupancy rate c.88%, highly resilient through crises 88.0% • Trends towards longer te
Slide 12: Strong Rental Growth Across All Markets
STRONG RENTAL GROWTH ACROSS ALL MARKETS Strong average same store1 in-place rent (€/sqm/year) growth Strong Rate growth 267 254 234 • Portfolio average Same Store In-Place Rent grew by c.21% versus 2019 221 216 • The UK saw the largest increase over the period at c.33% 2019 2020 2021 2022 2023 • Dig
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 Agreement Mobile App Leading adoption by customers High customer utilization Enabling customer access and Industry-leading pl
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 120 7% 6% 100 5% 90.0 90.0 90.0 80 4% Sqm total Pipeline as % of prior year FBO 65.4 3% 60 64.6 55.3 2% 40 47.1 1% 20 0% A 2020 A 2021 A 2022 A 2023 G 2024 G 2025 G 2026 A = Actuals G = Guidance FUELING OUR GROWTH WITH 90,000 SQM P.A. 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 2 building buildings buildings buildings Total cost: Total cost: Total cost: Total cost: €0.9 million €9.6 million €19.1 million €17.1 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 2022 2023 …targeting a fragmented market with multiple opportunities M&A Strategy… achievements achievements FOCUS AREA 64 “ BOLT ON” Large & ACQUIRED STORES 7 STORES
Slide 20: Top 18 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 123,000 sqm) mid-2023 to 3 stores 46 stores (or 253,000 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% 33% the Board and the CEO 9 Board • New employee training program members (on diversity, equi
Slide 25: Financial Review
3| FINANCIAL REVIEW
Slide 26: Income Statement
INCOME STATEMENT Q4 YTD Dec 23 2023 2022 % v ar. % v ar.C E R 2023 2022 % v ar. % v ar.C E R REAL ESTATE OPERATING REVENUE1 90.7 85.1 6.7% 8.3% 357.9 335.3 6.8% 8.3% Real estate operating expenses (27.9) (26.5) 5.3% 6.6% (120.5) (113.8) 5.8% 7.2% NET INCOME FROM REAL ESTATE OPERATIONS 62.8 58.6 7.3%
Slide 27: Same Store Property Operating Revenue
SAME STORE PROPERTY OPERATING REVENUE In € millions Q4 YTD Dec 23 (at actual exchange rate) 2023 2022 % var. % var.CER 2023 2022 % var. % var.CER France 19.9 19.5 2.1% 2.1% 78.2 75.3 3.9% 3.9% The Netherlands 18.4 17.2 7.1% 7.1% 71.4 65.8 8.4% 8.4% UK 16.7 15.6 6.6% 6.2% 64.3 61.2 5.1% 7.2% Sweden 1
Slide 28: YTD Dec 2023 NOI Evolution
YTD DEC 2023 NOI EVOLUTION YTD Dec 2022 ⎯ YTD Dec 2023 NOI1 bridge (€m) NOI margin improvement: +0.6pp NOI growth (at CER): +9.9% NOI growth: +8.2% Linked to SEK and GBP 6.7 (3.4) 237.2 14.7 219.2 Ramp-up phase of our non same store portfolio Addition of 9 properties versus Opex under contro
Slide 29: Cash Flow
CASH FLOW In € millions YTD Dec 2023 YTD Dec 2022 % var At actual exchange rate Cash: beginning balance 87.3 219.2 -60.1% TOTAL CASH FROM OPERATIONS 187.4 186.5 0.4% €258.1m Acquisitions Developments, redevelopments and other -68.2 -97.4 -76.5 -94.2 -10.9% 3.5% Net Cash end of December 2023 Other ca
Slide 30: Balance Sheet
BALANCE SHEET In € millions At actual exchange rate Dec 2023 Dec 2022 % var. €800m 2.36% 4.4 years Investment property 5,035.8 4,523.8 100% USPP indebtness Weighted average Weighted average Other assets (1) 40.3 30.0 No encumbered assets interest rate maturity Trade and other receivables 19.7 18.7 F
Slide 31: Outlook & Medium-Term Guidance
4| OUTLOOK & MEDIUM-TERM GUIDANCE
Slide 32: 2024 Outlook
2024 OUTLOOK • We expect to deliver a c. 7.5% total revenue growth for the year 2024; • In 2024 we plan to have a stable NOI margin, after being able to gain 2.7pp over three years, well ahead of our guidance; • In 2024, we plan to add c. 90,000 sqm via redevelopments, new developments and acquisiti
Slide 33: Medium Term Guidance
MEDIUM TERM GUIDANCE • 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. 90,000 sqm per year via redevelopments, new developments and acquisitions for around €200 million total investment per annum; • We maintai
Slide 34: 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 35: Appendices
5| APPENDICES
Slide 36: 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 37: Store Portfolio Segmentation
STORE PORTFOLIO SEGMENTATION STORE PORTFOLIO SEGMENTATION # OF STORES Stores developed by Shurgard in operation for more 2018 2019 2020 2021 2022 2023 than three full years as of January, 1st Same-stores Stores acquired by Shurgard in operation for more 214 than one full year as of January, 1st
Slide 38: All Store Revenue Growth: 2018 to 2023 Actuals
ALL STORE REVENUE GROWTH: 2018 TO 2023 ACTUALS All Store All Store : quarterly yoy growth 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 2018 2019 2020 2021 2022 2023 -1% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 All Store 3.9% 5.4% 5.
Slide 39: Same Store Revenue Growth: 2018 to 2023 Actuals
SAME STORE REVENUE GROWTH: 2018 TO 2023 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 2018 2019 2020 2021 2022 2023 Same Store 1.2%
Slide 40: Customer Dynamics
CUSTOMER DYNAMICS Average length of stay of our existing customers (in months) 43 Average length of stay of our exis�ng customers (in months) 68% 42 42 66% 66% 41 41 65% 64% 40 40 39 64% 62% 39 38 63% 60% 38 37 37 62% 36 58% 35 36 61% 56% 34 35 60% 54% 33 34 32 33 59% 52% 32 50% Mar-20 Apr-20 Sep-20
Slide 41: Monthly Move Out Ratio by Month Since 2014
MONTHLY MOVE OUT RATIO BY MONTH SINCE 2014 c. 86% Move out ratio1 7.5% 7.1% 7.0% 6.9% 6.9% 6.7% 6.5% 6.3% 6.1% 6.0% c. 67% 5.7% 5.6% 5.6% 5.6% 5.5% 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) 1. Same
Slide 42: Same Store Average Occupancy by Country
SAME STORE AVERAGE OCCUPANCY BY COUNTRY Q4 YTD Dec 2023 2022 Diff. 2023 2022 Diff. France 88.9% 89.4% -0.5pp 89.3% 89.4% -0.1pp The Netherlands 92.0% 91.2% 0.7pp 91.7% 90.7% 0.9pp UK 86.8% 88.1% -1.3pp 87.5% 88.3% -0.8pp Sweden 90.7% 91.1% -0.4pp 91.1% 91.7% -0.6pp Germany 90.7% 91.4% -0.6pp 90.9% 9
Slide 43: Same Store Property Average In-Place Rent by Country
SAME STORE PROPERTY AVERAGE IN-PLACE RENT BY COUNTRY In € per sqm/year Q4 YT D D ec 2023 2022 % var. % var. CER 2023 2022 % var. % var. CER France 277.2 270.4 2.5% 2.5% 271.5 260.1 4.4% 4.4% The Netherlands 238.7 224.3 6.4% 6.4% 231.7 214.6 8.0% 8.0% UK 381.7 353.5 8.0% 7.6% 366.1 342.3 6.9% 9.0% Sw
Slide 44: 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 2015 (187 2016 (192 2017 (213 2018 (214 2019 (217 2020 (225 2021 (228 2022 (234 2023 (
Slide 45: 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 46: Significant Secured Short-Term Pipeline (2023–2026)
SIGNIFICANT SECURED SHORT-TERM PIPELINE (2023–2026) Figures listed in net sqm (000,s) Total +231.4 A flexible and low risk growth plan DE 10.1 63.6 48.4 +122.2 • Pipeline (acquired, developed, under construction or signed) represents: UK 7.5 49.2 +56.7 - a total investment of €630.1m - 17.2% expansi
Slide 47: Expansion Pipeline 2023-2026 (17.2% of Rentable Sqm)
EXPANSION PIPELINE 2023-2026 (17.2% OF RENTABLE SQM) In € millions Number of Direct project cost 1 At closing rate Dec 2023 Property Region Country Project status Completion date Net sqm (000's) properties /Acquisition cost 2 Scheduled to open in 2023 16 64.6 143.5 Major redevelopments Unterfoehring
Slide 48: Expansion Pipeline 2023-2026 (17.2% of Rentable Sqm)
EXPANSION PIPELINE 2023-2026 (17.2% OF RENTABLE SQM) In € millions Number of Direct project cost At closing rate Dec 2023 Property Region Country Project status 1 Completion date Net sqm (000's) properties /Acquisition cost 2 Scheduled to open in 2025 14 78.3 230.0 Major redevelopments Porte de Clig
Slide 49: 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 50: 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 51: NTA, LTV, Net Debt/EBITDA, ICR Evolution Since IPO
NTA, LTV, NET DEBT/ EBITDA, ICR EVOLUTION SINCE IPO (OCT 2018) At actual exchange rate LOAN -TO-VALUE (LTV) EPRA NET TANGIBLE ASSETS (NTA) In € millions 18.1% 17.4% 18.0% 4,307.8 16.9% 3,638.9 13.9% 13.0% 3,112.6 2,517.9 2,146.7 2,260.4 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 +10
Slide 52: Shurgard Is a UK REIT
SHURGARD IS A UK REIT • Shurgard Self Storage Limited is a UK REIT since March 1, 2023; • The Group’s shares are still listed and traded on Euronext Brussels, with strong governance and financial reporting obligations; • Exemption from UK corporation tax on rental profits and capital gains arising f
Slide 53: 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