With the opening of 41 new stores since 2016, in addition to the acquisitions of 48 existing trading stores, we have established and strengthened our market-leading portfolio in the UK and Paris and have entered the Spanish, Dutch and Belgian markets. We have a high quality, fully invested estate in all geographies and, of our 199 stores as at 31 October 2024, 107 are in London and the South East of England or in Paris, with 60 in the other major UK cities and 32 in the Expansion Markets region. In the UK, we now operate 51 stores within the M25, which represents a higher number of stores than any other competitor.
Our MLA has increased to 8.6m sq ft as at 31 October 2024 (31 October 2023: 8.1m sq ft). At the current occupancy level of 74.6%, we have 2.2m sq ft of fully invested unoccupied space (3.8m sq ft including the development pipeline and post-period end openings), of which 1.6m sq ft is in our UK stores, 0.3m sq ft is in Paris and 0.3m sq ft is in Expansion Markets. In total, unlet space including pipeline is the equivalent of c. 88 additional stores located across the estate and provides the Group with significant opportunity to grow further. We have a proven track record of filling our vacant space at efficiently managed rates, so we view this availability of space with considerable optimism. We will also benefit from the operational leverage from the fact that this available space is fully invested, and the related operating costs are essentially fixed and already included in the Group cost base. Our continued focus will be on ensuring that we drive occupancy to utilise this capacity at carefully managed rates.
There are three elements that are critical to the optimisation of our existing portfolio:
As we develop new assets, we normally build out internal fittings in phases spread over a number of years after the initial store opening, enabling efficient capital deployment and optimisation of unit mix based on actual local demand. If we exclude this unavailable space, we have a Current Leasable Area (“CLA”) of 8.2m sq ft as at 31 October 2024. As a result, Occupancy as a % of CLA at the year-end was 78.3%.
Digital marketing expertise
Awareness of self-storage remains relatively low with half of the UK population either knowing very little or nothing about self-storage (source: SSA Annual Report 2024). In the UK, many of our new customers are using self-storage for the first time and it is largely a brand-blind purchase. Typically, customers requiring storage start their journey by conducting online research using generic keywords in their locality (e.g. ‘storage in Borehamwood’, ‘self-storage near me’) which means that geographic coverage and search engine prominence remain key competitive advantages.
We believe there is a clear benefit of scale in the generation of customer enquiries. The Group has continued to invest in technology and in-house expertise which has resulted in the development of a leading digital marketing platform that has generated 34% enquiry growth for the Group over the last five years, an annual growth of 6%. Our in-house expertise and significant annual budget have enabled us to deliver strong results.
The Group’s online strength has meant that it continues to be the predominant channel for customer acquisition. Online enquiries this year made up 89% of all our enquiries in the UK (FY 2023: 89%), with 86% in France (FY 2023: 84%). The majority of our online enquiries now originate from a mobile device (71% share in UK for FY 2024, FY 2023: 65%), highlighting the need for continual investment in our responsive web platform for a ‘mobile-first’ world. We continue to invest in activities that promote a strong search engine presence to grow enquiry volume whilst managing efficiency in terms of overall cost per enquiry and cost per new let. Group marketing costs for the year as a percentage of revenue were in line with the previous year at 4.1% (FY 2023: 3.8%).
During the period and post-period end, the Group demonstrated its ability to integrate newly developed and acquired stores into its marketing platform with successful new openings. We have clearly demonstrated that our marketing platform is transferrable into multiple overseas geographies.
Central Revenue Management and Cost Control
We continue to pursue a balanced approach to revenue management. We aim to optimise revenue per available space (“REVPAF”) by improving the utilisation of the available space in our portfolio at carefully managed 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, where it is appropriate the store sales teams have the ability to offer discretionary discounts or a Lowest Price Guarantee in the event that a local competitor is offering a lower price in order to optimise REVPAF.
Average rates are predominantly influenced by:
- The store location and catchment area;
- The volume of enquiries generated online and available space;
- The store team's skills at converting these enquiries into new lets at the expected price; and
- The very granular pricing policy and the confidence provided by analytical capabilities and systems that smaller players might lack.
We believe that Safestore has a very strong proposition in each of these areas.
Costs are managed centrally with a lean structure maintained at Head Office. Enhancements to cost control are continually considered and, particularly in the context of the current inflationary environment, the cost base is challenged on an ongoing basis.
Motivated and effective store teams benefiting from improved training and development
Training, People and Performance Management
In what is still a relatively immature and poorly understood market, customer service and selling skills at the point of sale remain essential in earning the trust of the customer and in driving the appropriate balance of volumes and unit price in order to optimise revenue growth in each store.
Our enthusiastic, well-trained, and customer-centric sales team remains a key differentiator and a strength of our business. Understanding the needs of our customers and using this knowledge to develop trusted in-store advisors is a fundamental part of driving revenue growth and market share.
We have been an Investors in People (“IIP”) accredited organisation since 2003 and we passionately believe that our continued success is dependent on our highly motivated and well-trained colleagues. Following the award of a Bronze accreditation in 2015, a Gold accreditation in 2018, and a Platinum accreditation in 2021, we were delighted to be awarded the ‘we invest in people’ Platinum accreditation again in March 2024. Platinum is the highest accolade in the Investors in People scale and achieving Platinum twice is a fantastic achievement, placing us as an employer of choice.
IIP is the international standard for people management, defining what it takes to lead, support, and engage people effectively to achieve sustainable results. Underpinning the standard is the IIP framework, reflecting the latest workplace trends, essential skills and effective structures required to outperform in any industry. Investors in People enables organisations to benchmark against the best in the business on an international scale. We are proud to have our colleagues recognised to such a high standard.
We are committed to growing and rewarding our people and we tailor our development, reward and recognition programmes to reflect this. Our IIP recognised coaching programme, launched in 2018 and upgraded every year since, continues to be a driving force behind the continuous performance improvement demonstrated by our store colleagues.
Our online learning portal, combined with the energy and flexibility of our store colleagues, allows us to deliver our award-winning development programmes.
All new recruits to the business benefit from enhanced induction and training tools that have been developed in-house and enable us to quickly identify high-potential individuals and increase their speed to competency. They receive individual performance targets within four weeks of joining the business and are placed on the ‘pay-for-skills’ programme that allows accelerated basic pay increases dependent on success in demonstrating specific and defined skills. The key target of our programme remains that we grow our talent through our internal Store Manager Development (“SMD”) programme, and we are pleased with our progress to date.
Our SMD programme has been in place since 2016 and is a key part of succession planning for future Store Managers. All eleven participants of our 2023 SMD programme successfully completed their Level 3 Management and Leadership apprenticeship, and we’re delighted that ten of those participants were awarded distinctions.
In January 2024, we commenced our seventh SMD programme. Funded by the Apprenticeship Levy, this programme provides the opportunity to complete a Level 3 Management and Leadership apprenticeship, with the additional opportunity to complete an Institute of Leadership and Management (“ILM”) qualification.
Our Senior Leadership Development programme (“LEAD”) focuses on developing our high performing Store Managers, aimed at preparing them for more senior roles within the business. We are proud that all eight participants of our Senior Leadership Development programme (LEAD Academy) successfully completed their Level 5 Management and Leadership apprenticeship; seven of those participants were awarded Distinctions.
Our performance dashboard allows our store and field teams to focus on the key operating metrics of the business, providing an appropriate level of management information to enable swift decision making. Reporting performance down to individual colleague level enhances our competitive approach to team and individual performance. We continue to reward our store colleagues for their performance with bonuses of up to 50% of basic salary based on their achievements against individual targets for new lets, occupancy, and ancillary sales. In addition, our Values and Behaviours framework is overlaid on individuals’ performance in order to assess performance and development needs on a quarterly basis.
Our ‘Make the Difference’ people forum, launched in 2018, enables frequent opportunities for us to hear and respond to our colleagues. Our network of 15 “People Champions” collects questions and feedback from their peers across the business and put them to members of the Executive Committee. We drive change and continuous improvement in responding to the feedback we receive for “Our Business, Our Customers and Our Colleagues”.
People Champions:
- consult and collect the views and suggestions of all colleagues that they represent;
- engage in the bi-annual “Make the Difference” people forum, raising and representing the views of their colleagues; and
- consult with and discuss feedback with management and the leadership team at Safestore.
Our values are authentic, having been created by our people. They are core to the employment life cycle and bring consistency to our culture. Our leaders have high values alignment enabling us to make the right decisions for our colleagues and our customers.
Our customers continue to be at the heart of everything we do, whether it be in store, online or in their communities. Our commitment to our customers mirrors that of our commitment to our colleagues.
Technological Developments
After delivering the appropriate technology the Group opened in FY 2024 a further two fully automated, unmanned, satellite self-storage centres in Eastleigh and London Paddington Park West, having opened its first in Christchurch in FY 2023. Utilising industry leading automated technology, along with in-house created communication and control technologies, customers can securely enter the building and their storage unit from a simple app on their mobile phone. Following this success, additional unmanned satellite stores are currently under various stages of assessment and development in the UK.
Our customers also have the option to complete a booking and contract for a self-storage unit online for any UK store location. Our belief is that our multi-channel sales strategy utilising fully automated channels, colleague interaction through our store sales teams or our specialist call centre and National Accounts teams provide each type of customer with the most tailored and easy way to buy self-storage at Safestore.
Customer Satisfaction
In February 2024, Safestore UK won the Feefo Platinum Trusted Service award for the fifth time. The award is given to businesses which have achieved Gold standard for three consecutive years. It is an independent mark of excellence that recognises businesses for delivering exceptional experiences, as rated by real customers. In addition to using Feefo, Safestore invites customers to leave a review on a number of review platforms, including Google and Trustpilot. Our ratings for each of these three providers in the UK are between 4.7 and 4.9 out of 5. In France, Une Pièce en Plus uses Google and Trustpilot to obtain independent customer reviews and in 2024, achieved a 4.7 out of 5 and a “TrustScore” of 4.6 out of 5 respectively. In Spain, our business collects customer feedback via Google reviews and has attained a score of 4.9 out of 5. Belgium also collects feedback via Google and has a score of 4.7 in 2024.
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