Shurgard Self Storage Limited · EURONEXT:SHUR
Shurgard Self Storage — Investor Presentation (November 2024)
60 slides from Shurgard Self Storage's investor presentation, Nov 5, 2024
Slide 1: Europe's Leading Brand of Self-Storage Solutions
November 2024 EUROPE’S LEADING BRAND OF SELF-STORAGE SOLUTIONS
Slide 2: Agenda
AGENDA 1. YTD Sep 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 September 2024 Performance and Strategy Review
1| YTD SEPTEMBER 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 2024 revenue guidance • Revenue growth across all markets • Leading operational platform • 2024 growth acceleration • Successful integration of Lok’nStore (UK) • Germany: successful acquisition
Slide 5: YTD Sep 2024 strong execution and growth
YTD SEP 2024 STRONG EXECUTION AND GROWTH €1,200m planned investment in 1.6m rentable sqm Sector sustainability leader5 projects2 +405,000 sqm Property Operating +10.8% € 5.6 bn €295.2m c. 29% of net rentable 5 star GRESB score with a leading Revenue yoy growth1 sqm Enterprise Value3 score of 91 out
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 89.8% -0.4pp #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 CAPITAL CITIES MAJOR CITIES 191 107 As of November, 2024 18 Focus on capital cities and major cities stores are located in other cities not As of March on highlighted 31, the 2024 18 stores are located map. « Major cities » in highlighted other cities not defined on the • Mark
Slide 11: Highest occupancy rates in Europe
HIGHEST OCCUPANCY RATES IN EUROPE Strong average same store 1 occupancy growth… Strong Occupancy growth 90.5% 90.5% 90.3% • Average same store occupancy rate rose 1.1pp since 2020 89.8% • 10 year same store average occupancy rate 89%, highly resilient 88.7% 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 279 264 251 • Portfolio average Same Store In-Place Rent grew by 27% versus 231 2020 219 • The UK saw the largest increase over the period at c.42% 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 180,000 90% Customer Centric Digitalization Better operating efficiency 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 % of 2023 rentable sqm In thousands sqm 16.9% 18% 240 220 235.7 16% 200 14% 180 Sqm total 12% 160 10% Pipeline as % of 2023 net 140 rentable sqm 120 7.1% 8% 100 5.1% 110.4 6% 4.5% 4.8% 3.9% 4.1% 80 4% 60 65.4 64.6 55.3 58.8 2% 40 47.1 20 0% A 2020 A 2021 A
Slide 17: Redevelopments: leveraging our freeholds
REDEVELOPMENTS: LEVERAGING OUR FREEHOLDS LEVER 1 LEVER 2 LEVER 3 2022 2023 2024 2025/2026 1 5 6 5 building buildings buildings buildings Total cost: Total cost: Total cost: Total cost: €0.9 million €9.6 million €20.6 million €27.4 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 105 “ BOLT ON” Large & ACQUIRED STORES 5 STORES
Slide 20: Top operators in Europe
TOP 18 OPERATORS IN EUROPE Size (in sqm) 2,000,000 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; €300m €97.6m €131.8m total costs of acquisition €108.6m total costs of acquisition • Capital Raise is earnings total costs
Slide 22: German growth strategy: double our size
GERMAN GROWTH STRATEGY: DOUBLE OUR SIZE From 25 stores (or c. 130,000 sqm) end-2022 to 3 stores to 7 stores 54 stores (or c. 295,000 sqm) by end 2026 Growth Acceleration in Germany 6 stores to 12 stores 3 stores • c. 80% in “Big Seven” cities, with strong demographics and urban to 4 stores Cities ou
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 Governance1 Board Diversity Focused on Employee 6+ Global charity ESG is in our DNA Welfare partners • ESG commitment is driven from 55% • 4.7/5.0 Glassdoor review score 9 Board 44% the Board and the CEO • New employee training program members throughout the org
Slide 25: Shurgard Acquired Lok'nStore
3| SHURGARD ACQUIRED LOK’NSTORE
Slide 26: Acquisition of Lok'nStore – modern, purpose-built 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 increase1 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 openi
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 • E-rental availability as of D+2 (50% of move-ins
Slide 31: Financial Review
4| FINANCIAL REVIEW
Slide 32: All store income statement
ALL STORE INCOME STATEMENT QTD SEP YTD SEP 2024 2023 % var. % var.CER 2024 2023 % var. % var.CER REAL ESTATE OPERATING REVENUE 1 105.8 90.7 16.6% 15.8% 295.2 265.1 11.3% 10.8% Real estate operating expenses (33.3) (27.9) 19.4% 18.5% (103.5) (91.8) 12.7% 12.1% NET INCOME FOR REAL ESTATE OPERATIONS 72
Slide 33: Same store property operating revenue per market
SAME STORE PROPERTY OPERATING REVENUE PER MARKET In € millions QTD SEP YTD SEP (at actual exchange rate) 2024 2023 % var. % var.CER 2024 2023 % var. % var.CER France 20.9 20.3 3.0% 3.0% 61.1 59.7 2.3% 2.3% The Netherlands 19.4 17.9 8.2% 8.2% 55.9 52.2 7.1% 7.1% UK 18.5 17.3 6.9% 5.0% 53.8 50.0 7.6%
Slide 34: YTD Sep 2024 NOI evolution
YTD SEP 2024 NOI EVOLUTION SEP YTD 2023 ⎯ SEP YTD 2024 NOI1 bridge (€m) NOI growth (at CER): +10.2% NOI growth: +10.7% Linked to SEK and GBP 8.7 9.0 0.3 191.7 173.1 Ramp-up phase of our non same Opex under control store portfolio Same store NOI growth (constant FX rate): +5.2% Addition of
Slide 35: Balance sheet
BALANCE SHEET €700m €290m €500m Drawn on a €450m floating Bridge loan USPP indebtness (fixed interest committed bank loan interest rate) (Refinanced by rated EUR bond in facility (120bps margin on No encumbered assets EURIBOR, down to 100bps with October 2024 at 3.625%) at end of June 2024 BBB+) 3.2
Slide 36: 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 S&P rating rationale: • “Leading market position in the self-storage market in Western Europe, as well as its large customer Rating Framework: base and broad geographic diversification” • Debt / Total Assets: 2
Slide 37: Eurobond issuance
EUROBOND ISSUANCE • On October 16, Shurgard issued a €500m Eurobond; • This first issuance attracted a broad and diversified high quality investor base, as evidenced by an orderbook of €4.6 billion at peak with an oversubscription ratio of 9.2x times; • The new bond, maturing on October 22, 2034, ca
Slide 38: Outlook & Medium-Term Guidance
5| OUTLOOK & MEDIUM-TERM GUIDANCE
Slide 39: 2024 revised outlook including Lok'nStore acquisition
2024 REVISED OUTLOOK (AT CER) INCLUDING LOK’NSTORE ACQUISITION • All store revenue growth: at least 12% (vs. 8% previously) for the year 2024; • All store NOI growth: growing nearly in line with revenue growth; • Expansion pipeline: + c. 235,000 sqm in 2024, investing c. €750 million; • Adjusted EPR
Slide 40: 2024 revised outlook including Lok'nStore acquisition
2024 REVISED OUTLOOK (AT CER) INCLUDING LOK’NSTORE ACQUISITION • Average effective income tax rate: expected to remain c. 17% in 2024; • Dividend: €1.17 per share for the fiscal year; • Maintain disciplined financial policy: with target LTV at c. 25% and, 4.0x to 5.0x Net debt/ Underlying EBITDA, wi
Slide 41: 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 42: 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 43: Appendices
6| APPENDICES
Slide 44: 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 45: 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 46: 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 47: All store revenue growth: 2019 to 2024 actuals
ALL STORE REVENUE GROWTH: 2019 TO 2024 ACTUALS All Store : quarterly yoy growth All Store 17% 14% 15% 12% 13% 10% 11% 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 3Q24 2019 2020 2021 2022 2023 All Stor
Slide 48: 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% 2019 2020 2021 2022 2023 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Same S
Slide 49: 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 49
Slide 50: 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 51: Same store average occupancy by country
SAME STORE AVERAGE OCCUPANCY BY COUNTRY QTD SEP YTD SEP 2024 2023 Diff. 2024 2023 Diff. France 89.8% 89.5% 0.3pp 89.2% 88.9% 0.2pp The Netherlands 91.6% 91.9% -0.3pp 91.1% 91.3% -0.2pp UK 88.7% 88.5% 0.2pp 87.3% 88.0% -0.7pp Sweden 91.4% 91.1% 0.3pp 90.6% 91.2% -0.5pp Germany 88.3% 90.4% -2.1pp 88.7
Slide 52: Same store property average in-place rent by country
SAME STORE PROPERTY AVERAGE IN-PLACE RENT BY COUNTRY In € per sqm / year QTD SEP YTD SEP 2024 2023 % var. % var. CER 2024 2023 % var. % var. CER France 278.9 268.4 3.9% 3.9% 273.4 266.0 2.8% 2.8% The Netherlands 254.6 235.3 8.2% 8.2% 246.7 229.7 7.4% 7.4% UK 398.4 369.1 7.9% 6.1% 391.7 358.0 9.4% 7.
Slide 53: 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 54: 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 55: Expansion pipeline 2024-2026 (29% of rentable sqm)
EXPANSION PIPELINE 2024-2026 (29% OF RENTABLE SQM) In € millions Number of 1 Direct project cost At closing rate Sep 2024 Property Region Country Project status Completion date Net sqm (000's) 2 properties /Acquisition cost Scheduled to open in 2024 52 235.7 758.0 Major redevelopments Top Box major
Slide 56: Expansion pipeline 2024-2026 (29% of rentable sqm)
EXPANSION PIPELINE 2024-2026 (29% OF RENTABLE SQM) In € millions Number of Direct project cost At closing rate Sep 2024 Property Region Country Project status 1 Completion date Net sqm (000's) properties /Acquisition cost 2 Scheduled to open in 2026 18 110.4 270.6 Major redevelopments Montigny-le-Br
Slide 57: 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 58: 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 59: 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 60: 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
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