Rental income per sqm SEK 2,069, occupancy at 72.9%

11% q-o-q NAVPS increase mainly due to improved NOI

Currently trading at the low end of our valuation range

Entering phase 3: leveraging economies of scale
As 24Storage management has repeatedly communicated, becoming established in the up-and-coming Swedish self-storage market requires three development phases: 1) setting up fundamental operations, 2) creating economies of scale and 3) leveraging economies of scale. Q2 marked a clear step in the right direction for 24Storage in terms of occupancy, which drives economies of scale. Rental income per sqm was SEK 2,069 (2,008), and as occupancy increased to 72.9% (71.7%) Rev. PAM (rev. per available sqm), the key KPI, rose to SEK 1,508 (1,404)

Value revisions of SEK 90m in H1’21 (11m)
Value revisions of properties were SEK 80m (5.4m) or 5.8%. This is high compared to both real estate peers and the company’s own history, but could easily be explained by a strong market; this was also the backdrop to the large value uplift in Q4’20 (4.3%). The increase in Q2 is mainly related to improved NOI. Long-term NAVPS also saw a significant increase; after having been in the range of ~SEK 38-42 since this metric was introduced in Q3’18, Q2 saw NAVPS rise to SEK 45.0 from SEK 40.7 in Q1’21 and SEK 38.5 in Q2’20, or 11% q-o-q and 17% y-o-y. Our estimates have been revised following the Q2 result.

P/NAVPS of 0.98x is 23% below sector average
24Storage is trading at a last reported P/long-term NAVPS of 0.98x, which is 23% below the sector average and 6% below its own historical average. We base our valuation range on a P/NAVPS of 85%-135%, which corresponds to 24Storages’s historical minimum and maximum multiples. Given our ‘22e NAVPS and P/ NAVPS multiple range, we arrive at a valuation of SEK 42-67 per share, noting that the company is trading in the lower end of this spectrum.

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