Shurgard FIRST LOOK: FY22 Results, more growth in store for FY23

Shurgard FY22 results continue on its growth track, with a stellar 8.6% lfl operating revenue growth. The EPRA Earnings of EUR 143.6m (+15% yoy) came slightly above our estimate at EUR 141.9m. The outlook for 2023 points to an 8.0% property revenue growth, vs. our expectation for 7.5%. The company believes it can raise yields for new projects from a 7-8% range to 8-9% range. The company also expects to expand its operating margin by 0.2%. These figures confirm that growth momentum continues into FY23. Capex estimated at EUR 150m or 70k sqm (Dev.+Acq.).
The current demographic trends support the growth of their business and the roll-out of the e-rental platform gains traction against smaller competitors. The UK market remained the strongest link over FY22 with an impressive 11.6% yoy growth as it continues to ramp up its average rent per sqm (+12.3%), but occupancy decreased slightly by 0.3%. The overall profitability is also mainly driven by higher rents per sqm as occupancy remains at a high level. We maintain our target price at EUR 58 and rating at BUY. Shurgard proposes to decrease the board members from the 2 largest shareholders to 1 instead of 2 to a board of 9 instead of 11. Dividend will remain at 1.17 per share for FY23. We expected an increase.