What Shur­gard’s €2.4bn IPO means for UK self­s­tor­age plays

We look at how the val­u­a­tion im­plied by the up­com­ing float com­pares with Lon­don-listed ri­vals

Shares - - BIG NEWS -

Europe’s largest self-stor­age player Shur­gard Self Stor­age is to float on the Euronext Brus­sels stock mar­ket and raise €575m, with trad­ing in the shares ex­pected to com­mence on 15 Oc­to­ber. This is rel­e­vant to UK in­vestors for sev­eral rea­sons.

Some of the funds raised by Shur­gard, an af­fil­i­ate of US-based real es­tate in­vest­ment trust Pub­lic Stor­age, will be used for the planned ac­qui­si­tion of a store in Kens­ing­ton – thus in­creas­ing its po­si­tion in the UK – as well as pay­ing down bor­row­ings and us­ing cash for fu­ture growth.

The num­bers from the IPO (ini­tial pub­lic of­fer­ing) pro­vide an in­ter­est­ing read-across on val­u­a­tion for the Lon­don-listed stor­age plays Big Yel­low (BYG), Safe­store (SAFE) and our top pick in the space Lok’n Store (LOK:AIM).

Self-stor­age for house­holds and busi­nesses has been a growth area in re­cent years driven by smaller homes, a more mo­bile pop­u­la­tion, hoard­ing and the growth of smaller in­ter­net-based busi­nesses. En­cour­ag­ingly for Shur­gard this mar­ket is less de­vel­oped in con­ti­nen­tal Europe.

Based on the top val­u­a­tion im­plied by its IPO pric­ing range of €2.4bn and last re­ported earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) of €135m, Shur­gard trades on 17.8 times earn­ings. That is cheaper than sev­eral UKquoted ri­vals.

For ex­am­ple, Lok’n Store trades on 18.6 times EBITDA, a pre­mium jus­ti­fied in our view given our faith in its am­bi­tious ex­pan­sion plans; Big Yel­low trades on 19.5-times and Safe­store which trades on a mul­ti­ple of 15.2 us­ing the same met­rics. (TS)

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.