Overview
Shurgard Self-Storage Ltd reported mixed fiscal 2025 results, with certain headline metrics beating consensus modestly while operating margins fell short of management expectations. An analyst note published Thursday highlighted that earnings per share edged past estimates by about 1%, while underlying EBITDA missed forecasts by roughly 1%.
Financial results and per-share metrics
The company disclosed adjusted EPRA earnings of €173.1 million for fiscal 2025, representing a 3.7% increase year-over-year on a constant exchange rate basis. On a per-share basis that equates to €1.74, a rise of 1.7% compared with the prior period. Management attributed a portion of the constrained per-share growth to dilution from the company scrip dividend program, which has since been discontinued as Shurgard moved to cash-only dividends.
Shareholder cash returns remain unchanged: the company maintained its dividend at €1.17 per share, matching the prior year and aligning with market expectations.
Portfolio growth plans and longer-term guidance
Looking further ahead, Shurgard set out a 2027-2030 growth trajectory in which management expects a compound annual growth rate of 6% to 8% in three key metrics - all-store revenue, underlying EBITDA and adjusted EPRA earnings. To support that expansion, the company plans to add roughly 90,000 square meters of operational space per year, which it estimates will involve approximately €200 million in project costs and acquisitions annually.
Separately, for new developments the group targets stabilized net operating income yields of 9% to 10% and envisages an addition scenario of 100,000 to 125,000 square meters requiring capital expenditures in the range of €250 million to €315 million.
Balance sheet, valuation and leverage
Shurgard reported EPRA net tangible assets of €53.3 per share, a 10.1% increase year-over-year supported by like-for-like asset value growth of 8.4%. Leverage metrics were stable: loan-to-value (LTV) stood at 23.2%, down 10 basis points versus the prior year, while net debt to underlying EBITDA remained at 6.2 times, unchanged year-over-year. Management reaffirmed medium-term capital structure objectives targeting a 25% LTV and a net debt to EBITDA ratio between 5.0 and 6.0 times by 2030.
Operating performance and market dynamics
Property operating revenue for fiscal 2025 rose 10.8% year-over-year at constant exchange rates to €450.9 million, though the rate of growth decelerated to 3.4% in the fourth quarter. Same-store operating revenue expanded 3.2% for the year on a constant exchange rate basis, down from growth rates of 4.7% in the first half of 2025 and 4.8% in fiscal 2024. Quarterly traction weakened further in Q4, with same-store revenue growth slowing to 1.5% - driven by a 0.7% decline in the U.K., a 0.6% increase in France and a 1.4% increase in Germany.
Average in-place rent on a same-store basis rose 3.5% year-over-year, yet the pace eased in the fourth quarter to 2.3%. Country-level Q4 rent changes included 0.1% in the U.K., 0.8% in Germany and 1.6% in France, with Sweden and Denmark showing stronger single-quarter uplifts of 5.2% and 3.3% respectively.
Occupancy metrics presented mixed signals. Same-store average occupancy fell 40 basis points year-over-year to 89%, including a 90 basis point decline in Q4. Within markets, the Netherlands experienced a 110 basis point fall and the U.K. an 80 basis point decline.
Performance within the recently acquired Lok n Store portfolio showed improvement: average occupancy reached 80%, up from 77% in the first half of 2025 and significantly higher than the 67% level at acquisition in 2024. Management expects that portfolio to reach around 90% occupancy by December 2026.
Despite revenue gains, underlying EBITDA margin contracted by 30 basis points year-over-year to 58.9% at constant exchange rates, missing prior guidance which had called for a 50 basis point improvement. Management noted that the fourth quarter reflected a more competitive pricing environment, prompting pricing actions to sustain high occupancy levels.
Fiscal 2026 outlook
For fiscal 2026, Shurgard guided to revenue growth of 6% to 8% and underlying EBITDA of €278 million to €289 million. The company expects interest expense in the range of €57.5 million to €59.5 million and forecast adjusted EPRA earnings per share to grow between negative 1% and positive 4%. The cash dividend is planned to remain at €1.17 per share.
Key takeaways
- Revenue and EPRA earnings advanced modestly, but operating margin contraction highlights near-term pricing and cost challenges.
- Management established a clear multi-year growth target for 2027-2030 and outlined material capital deployment to expand the portfolio.
- Balance sheet metrics are stable with modestly lower LTV and unchanged net debt to EBITDA; targets for improved leverage by 2030 were reiterated.
Risks and uncertainties
- Competitive pricing pressure - Q4 weakness indicates a more competitive market that required pricing actions, which can compress margins and slow revenue per square meter growth.
- Occupancy volatility - same-store occupancy declined, with notable falls in the Netherlands and the U.K., creating uncertainty around near-term revenue stability.
- Execution and capital intensity - the company s multi-year expansion plans and development pipeline require significant capital outlays; achieving targeted NOI yields and occupancy milestones will be critical to hit guided returns.
Shurgard s fiscal 2025 results present a mixed picture: steady asset value growth and maintained shareholder distributions contrast with margin pressure and softer same-store momentum in key markets. The company s mid- and long-term ambitions are explicit, but realization will depend on navigating competitive dynamics while executing its development pipeline.