1、7T2se3r0Ot6kwoPa7T2se3r0Ot6kwoPaDistributed on:01/08/2025 04:03:14 GMTDistributed on:01/08/2025 04:03:14 GMT1 August 2025Attractive long-term growth prospects in a fragmented marketThe European self-storage market provides storage predominantly to consumers to manage life changes that require reloca

2、tion and flexible longer term needs.We think the market has significant long term growth potential as it is far less mature than the US,and is still highly fragmented.This creates attractive development and consolidation opportunities for the large operators.With occupancy rates having stabilised in

3、 recent periods,we forecast earnings growth will build from CY26.We upgrade Big Yellow and Safestore to Buy and initiate on Shurgard at Hold.The occupancy backdrop has stabilisedWe think the occupancy backdrop has stabilised,supported by improving housing transactions across key markets,and this is

4、conducive to low-single-digit rental inflation to offset cost inflation.However,we think it is too early to call for a broader demand improvement required to deliver earnings upgrades at this stage,with the housing market recovery in the UK proving slow.Secured development pipelines offer visible gr

5、owth from CY26,which we estimate will contribute at least half of the sub-sectors 7-9%TARs over the next 5 years.Upgrading Big Yellow and Safestore to Buy;initiating on Shurgard at HoldBig Yellow generates the highest EBITDA margins in the sector,reflecting superior pricing performance,and trades at

6、 the most attractive earnings yield,with the lowest LTV.Safestore is forecast to deliver an inflection in earnings growth in FY26,with attractive medium-term growth from the development pipeline.Both trade at discounts to historical earnings yields and larger than normal discounts to Shurgard,which