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Business model

Safestore’s strategy
Safestore’s strategy is to leverage its well-located property assets, expertise, infrastructure and balance sheet to increase earnings per share and deliver a progressive dividend policy. We do this by:

Optimising the trading performance of the existing portfolio:

  • Leveraging our scalable pan – European digital platform to capture and convert enquiries into new lets. 
    • Our leading digital marketing platform has driven a 34% growth in enquiries growth for the Group over the last five years. We carefully manage our overall cost per enquiry and cost per new let for maximum efficiency.
    • Online enquiries this year made up 90% of all our enquiries in the UK (FY 2024: 89%), and 85% in France FY 2024: 86%). The majority of our online enquiries now originate from a mobile device.
    • Our multi-channel sales strategy utilises online automated channels, interaction through our store sales teams or our specialist call centre and National Accounts teams, providing each type of customer with the most tailored and easy way to buy self-storage at Safestore.
  • Maximising store revenue (REVPAF) using dynamic local pricing and over 27 years of data to achieve the optimal balance of occupancy and rates.
    • Our central pricing team is responsible for the management of our dynamic pricing policy, which is set weekly at the granular level of store/unit size, together with the implementation of promotional offers and the identification of additional ancillary revenue opportunities. Whilst prices are managed centrally, the store sales teams can offer discretionary discounts reflecting local competition.
    • Repurposing selected UK space from business to domestic customers to optimise our mix and REVPAF potential.
    • Investing in our people and incentivising store teams to drive high levels of customer satisfaction, rental revenue and ancillary services.
    • Filling unlet space to leverage fixed costs and the fully invested store estate.    

Maintaining a strong and flexible capital structure:

  • Maximising annual operating cash flows to fund investment and pay dividends.
  • Maintaining comfortable headroom against our covenants of 60% LTV and minimum interest cover of 2.4x.
  • Strategically managing our cost of debt.

Taking advantage of selective portfolio management and expansion opportunities in our existing markets and, if appropriate, in attractive new geographies either through a joint venture or in our own right:

  • Buying sites with a strict investment discipline to achieve 10% yield on cost at maturity, leveraging local property expertise to secure opportunities at a fair price.
  • Consolidating our leading position in the UK and Paris, and building a European footprint.
  • Actively looking at joint venture and partnership opportunities in existing and new markets.

We pursue our strategy whilst maintaining a strong focus on Environmental, Social and Governance (“ESG”) priorities.

Delivering value for shareholders
Since Safestore was founded in 1998 the business has grown organically and through acquisitions developing profitable and sustainable spaces that today serve 105,000 customers and employs 850 people annually. We are a leading operator of 211 high quality and secure self-storage facilities primarily in the UK and Paris with a growing presence across Europe. Over 95% of our portfolio is located in major metropolitan areas where demand for space is structurally high and new supply is constrained. As a result, our portfolio is hard to replicate and benefits from high barriers to entry for new site development.

We believe our strong track record speaks for itself. Over the last ten years Safestore has used the benefits of the REIT structure to return £448 million to shareholders through dividends, achieving a total shareholder return in that time of 198% and NAV growth of 377%. 

Looking ahead, the Board is confident that the market dynamics for self-storage in the UK and Europe remain positive with our portfolio well positioned to deliver growth. We will continue to leverage our marketing and operational expertise to drive REVPAF and earnings in and beyond our large UK and Paris markets. Growth will be driven by:

  • EBITDA growth from LFL stores:
    • Mature LFL stores (>five years old), which represent [79%] of MLA, through rate improvements, benefits from UK partitioning and cost inflation reducing.
    • Contribution from fully invested stabilising LFL stores (between two and five years old), which currently represent 10% of MLA as they continue up the maturity curve, increase occupancy and build profitability.
  • Increasing contribution from our non-LFL stores (1.0 million sq ft or 11% of MLA and < two years old) and our current pipeline of 1.1 million sq ft projected to open over the next few years. These stores will contribute increasingly to earnings as they fill occupancy and cover their fixed costs. They are expected to generate an incremental £35-40 million of EBITDA upon stabilisation.
  • Our joint ventures in Germany and Italy present an opportunity to expand from a small footprint of stores with a low initial capital outlay and management fee income. We see the potential for other opportunities with this model to drive longer term portfolio growth.