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1、JLL Spanish Self Storage Market ReportMarch ContentsIntroduction 3Investment thesis for self storage 3Market Overview&supply trends 5Quality of supply in Spain compared to Europe 5Growth in supply in Spain 8Operating benchmark trends 12Self storage capital values 14Transactional trends 152Self Stora
2、ge Market ReportWeaknesses and threats:Asset class suits patient capital when portfolios are in development Limited number of experienced investment grade third party managers The risk of obsolescence of older buildings with stranded assets Development boom in certain markets will bring more supply
3、More dry powder in the market than can be deployed meaning investors are taking higher risks Dependency on housing market transaction activityInvestment thesis Strengths and opportunities:Inflation linked rental growth Structurally undersupplied market across Europe Defensive asset class globally as
4、 proven during the global financial crisis and the recent Covid-19 pandemic Low consumer awareness in nascent markets,which is rising and feeds demand Rapidly rising investor awareness Emerging markets are following key trends from more mature markets Fixed cost business but with clear economies of
5、scale for dominant players Fixed costs being reduced as hybrid digital operating models are being tried Data becoming more transparent to allow better decision making,both strategically and operationally Market-beating ESG characteristics for real estate investors More investable portfolios of scale
6、 are being developed Development viability is improving with softening of real estate market Debt availability is good/improving IntroductionThe Spanish Self Storage market has seen strong levels of growth in recent years,mirroring the trends seen across other European countries.This research docume
7、nt has been prepared by JLL in partnership with AESS.It covers the investment case for self storage,some of the key supply metrics in Spain and insights into the real estate market.It is produced to help operators,investors and funders understand the market and the key risks and opportunities in Spa
8、in.13Self Storage Market ReportEuropean supplyThe map below shows the supply of self storage across Europe with the generation of self storage facilities indicated by different colour dots.First Second Third Forth OtherMarket overview&supply trends24Self Storage Market ReportThere are more than 5400
9、 facilities across Europe.The UK is the largest market with close to 2000 facilities.This is roughly the same size as the largest self storage operator in the most developed self storage market,being the US.When comparing supply across markets it is important to consider both the number and quality
10、of the stock in each market.The graphs below summarises the split in generation of self storage facilities across the six biggest markets in Europe.Quality of Supply in the 6 Biggest Markets in EuropeHigh Quality Supply in the 6 Biggest Markets in EuropeFacilities per Million population The UK marke
11、t is roughly five times the size of the German market.When considering only the top-quality stock in each market,the UK is only twice the size of Germany.When we consider the total number of facilities in the Spanish market and compare it to other well-established markets,Spain is the third largest
12、market in terms of number of stores.If we discount the older stock in the market,Spain is not significantly larger than Sweden,the Netherlands or Germany.Developing good quality stock in cities and towns in catchments with the right demographic attributes(high density and affluence)is key.A catchmen
13、t can easily become saturated if a high number of lower quality operators compete on price which could make it difficult for new higher quality entrants to fill stores and improve achieved rental rates.The location of the stores drives rental rates as our operational benchmarks show that operators w
14、ith the best location,i.e.the best prominence always outperform sites with lower prominence in catchments with high levels of supply.020040060080000UKFranceGermanyThe NetherlandsSwedenSpainFirstSecondThirdFourth020040060080000UKFranceGermanyThe Netherlands
15、SwedenSpainSecondThirdFourth2.037.719.65.09.737.46.61.916.315.214.320.525.34.06.41.53.85Self Storage Market ReportFirst Generation sites refer to sites developed by the industry as it was emerging.They are generally properties over 20 years old with little,to no,extra features to enhance the custome
16、r experience that we see with newer,more modern properties today.The quality of fit out tends to be low,with no mezzanine floors and a poor customer experience in general.Second Generation self storage sites refers to sites that have been converted for self storage use.Generally still kept in a good
17、 condition,they are often located on modern industrial estates in good locations.Third Generation self storage sites refer to purpose-built sites,which are completely modernised and usually offer greater security measures and experience enhancing features.They are priced at a higher rate to match th
18、e increased quality but make up for the difference in price with useful features offered such as climate-controlled units,gated entries with keypad entry enabling longer access hours and a greater number of security cameras.Fourth Generation sites refer to new to the market,modern,superstore sites t
19、hat house more than 75,000 sq ft in storage space.Similarly to third generation sites,they will be highly modernised offering the customer a greater number of features to improve security and the conditions for storage,a reason for why the premiums are much higher on these stores.They are also typic
20、ally developed with other complementary uses such as supermarkets or car showrooms.Distribution of Quality of SupplyThere are still various cities and towns in Spain where the supply is low and the quality is poor as is demonstrated below:Prime(Third and Fourth Generation)Secondary(First and Second
21、Generation)Container020406080100120140MadridBarcelonaValenciaMlagaSevillaBilbao6Self Storage Market Report First Second Third Forth OtherStores per million people10.710.39.96.912.113.96.39.022.114.114.25.211.910.313.72.06.45.016.111.26.416.11.94.53.213.315.99.319.920.912.47.66.66.47.49.213.311.213.8
22、11.66.016.725.57Self Storage Market ReportGrowth in supply in SpainGrowth in supply(exc Containers)The table above shows the total number of facilities(excluding container facilities)owned and operated by the major operators in 2020 vs 2022 in comparison to the rest of the market.On average,the supp
23、ly in the Spanish market increased by 14%in the last two years in terms of number of stores.The largest operators grew the number of stores under management,or those being owner-operated,by more than 25%over the last two years.There are various well-funded new entrants to the Spanish market that hav
24、e shown rapid growth as they plan to roll out new platforms with a pipeline of development stores that will add significant further growth to the market.We expect the supply in the Spanish market to increase over the next two years at comparatively high levels as these pipeline stores come to market
25、.JLL transaction teams in Spain report high levels of enquiries from operators and new entrants for both conversion opportunities and greenfield land developments.0500300350400BluespaceNecessito unTrasteroHomeboxGuarda TotPongo TrasterosOthers202020228Self Storage Market ReportSupply in K
26、ey European citiesDistribution of Quality of supply vs supply per million people Spains main cities has supply levels(measured as facilities per million population)that are around the midpoint when compared to other major European cities.Spanish cities have a larger proportion of lower quality or ol
27、der generation supply than other major European cities.There are operators like BlueSpace that dominate the market share of high-quality supply in the main cities,similar to other European cities as shown below.0%10%20%30%40%50%60%70%80%90%100%055LondonStockholmBarcelonaMadridMunichBilbao
28、BerlinLyonCopenhagenParisDistribution of qualityFacilities per million populationPrime quality stockSecondary stockContainersStores per million people9Self Storage Market ReportLondonStockholmBarcelonaMadridMunichBilbaoBerlinLyonParisBig Yellow(17%)Shurgard Self Storage(32%)Bluespace(31%)Bluespace(1
29、8%)MyPlace(44%)Bluespace(31%)MyPlace(44%)Shurgard Self Storage(12%)Shurgard Self Storage(30%)Safestore(16%)Green Storage(30%)Homebox(6%)Necesito un Trastero(5%)Shurgard Self Storage(11%)Homebox(6%)Shurgard Self Storage(10%)Homebox(12%)Une Piece un Plus(30%)Access Self Storage(15%)City Self Storage(1
30、2%)Necesito un Trastero(6%)Homebox(8%)Necesito un Trastero(6%)Lagerbox(10%)Locakase(3%)Homebox(17%)Shurgard Self Storage(10%)Pelican Self Storage(10%)Bluespace(5%)The large operators tend to target major cities-meaning their market share at national level is lower than that in the major cities where
31、 they can be more efficient.Having a significant market share in a market or geography has several advantages which include:The ability to become a price-leader Having the strongest brand awareness in a market helping to drive marketing efficiencies.Operational efficiency and improved profit margins
32、 on an asset and portfolio level Ability to scale platforms through M&A and site finding Ability to drive a strong culture in the businessOperators with major market share32%31%18%44%17%31%44%12%30%0%10%20%30%40%50%60%70%80%90%100%OtherOther Key PlayersLeader10Self Storage Market ReportTop 10 operat
33、ors in Europe by number of facilitiesMarket fragmentationNumber of sites in portfolioNumber of Operators30+320 29 010-1925-9103-4141-2306Despite a few operators dominating certain key cities in Spain,the market remains very fragmented with around 60%of the self storage stock(including containers)bei
34、ng owned by single owner operators as is shown by the table to the right.The fragmented nature can make a consolidation strategy difficult or slow to deliver.00.020.040.060.080.10.120.140.160.180.20500300ShurgardHomeboxSafestoreMyPlaceSelfstorageBig YellowBluespace OK Minilager Access Sel
35、fStorageUne Pieceen PlusAllsafe SelfStorageNumber of facilities 2019Number of facilities 2022Cumulativemarket share 2019(%)Cumulative market share 2022(%)11Self Storage Market ReportOperating benchmark trendsCountryPrime to Average rent premiumUnited Kingdom+125%Netherlands+100%Sweden+80%Italy+65%Ge
36、rmany+60%Spain+50%Denmark+30%Austria+25%Norway+25%Rental rate trendsThe widest range of rents achieved is noted in our data in the UK.This is as a result of the market having some of the oldest stock but is also the most established market in Europe with operators successfully differentiating and pr
37、icing for different quality stock.The table below shows the ranking from highest to lowest for Prime Achieved rental rates across the 6 biggest markets in Europe:Ranking Prime Achieved Rental RatesCountry 1United Kingdom 2France 3Germany 4Netherlands 5Spain 6SwedenPrime achieved rental ratesThe achi
38、eved rents(rents net of discounts and promotions)differ across markets when we compare prime rents,the lowest and average rents achieved in each market.Across Europe,the highest Prime rents are normally achieved in city centres by top operators,with the best locations.The premium that operators with
39、 stores in prime locations and in city centres can achieve,above the average rents in a country,vary widely.This premium varies for many reasons average rents in countries can fall where there is aggressive pricing,leading to very high city centre premium over that average.Furthermore,city centre si
40、tes tends to have smaller average unit sizes which drives average rents upwards.In markets where there is limited competition in affluent catchments,we see some exceptionally high rents.12Self Storage Market ReportRental growth prospectsThe strength of self storage rental escalation in any market is
41、 often strongly correlated to new supply entering that market.This trend has been observed over time,especially in the US where the supply and rental escalation can be tracked quite accurately due to publicly available information that is widely available.We have observed the same trend in various m
42、arkets or catchments in Europe:good rental growth can lead to a development boom which then in turn leads to new supply.We are aware of increasing supply entering the Spanish market and expect further supply to be added as conversion opportunities increase in other uses like offices,car parks and re
43、tail warehouses.This elevates the importance of detailed feasibility studies that consider the supply per catchment and the strength of a prospective location relative to existing competitors and new entrants to the market.Operating cost trendsThe self storage industry is a fixed cost business.The b
44、iggest cost items are Staff costs,Utilities,Property taxes and Marketing.The breakdown of these costs as a percentage of total direct operating costs across Europe are as shown below:Other costs are a combination of general administrative costs like telephone costs,printing,and consumables.Key trend
45、s that we observe across Europe which are not only unique to Spain include:Staff costs increased during 2020 and 2021.In 2022 we have started to see a reversal of this trend as operators focus on reducing the number of staff per store and move towards automation or semi-automation.Many operators are
46、 opting for a hybrid approach in which technology assists on-site staff in reducing operational pressure and dealing with enquiries more efficiently.Solar panels are directly accretive to value as the saving in utility costs is reflected in the bottom-line.Increases in the cost of energy has meant t
47、hat increases in utility costs varied by between 20%and 25%and even 50%in some cases.This sudden increase in costs have halved payback periods for the installation of solar panels which have become more prevalent.Their installation also increases the capital value of the asset providing a further fi
48、nancial benefit over the payback period.Operators have become smarter in how they market their facilities.The rising cost of pay-per-click advertisements has previously been the main driver behind an increase in marketing costs.We have generally seen a reduction in marketing costs,especially for lar
49、ger platforms that are able to spend marketing costs more efficiently on organic digital traffic generators.Platforms of scale are demonstrating their ability to improve profit margins as they can benefit from economies of scale,sophisticated technology applications and insight into customer behavio
50、ur through large datasets in the volume of enquiries that are processed and the impact that varying pricing strategies have on conversion rates.Direct operating costsThe Covid-19 pandemic has shown excellent rental rate growth that varied between 7%and 20%in key markets across Europe.30%15%8%12%35%S
51、taff costsMarketingUtilitiesProperty TaxesOther13Self Storage Market ReportSelf storage capital valuesThe real estate market in Spain saw significant yield compression in the last decade as shown in the graph below.As self storage has emerged as an asset class that is attractive to investors,the wei
52、ght of capital together with increasing knowledge and data about the sector has led to a better understanding of the risks of the sector.This has led to a narrowing of the gap between self storage yields and other asset classes.The US market saw significant yield compression in self storage particul
53、arly in the last few years where prime yields reached 3.0%.That helped accelerate yield compression in Europe.The impact of the rising cost of debt has seen yields move out what will be interesting in the coming 12 months is whether the gap between self storage and other asset classes continues to n
54、arrow.3Rental residentialRetail parkHigh streetOfficesShopping centersIndustrialPrime self storageHealthcareStudent housing0%1%2%3%4%5%6%7%8%9%10%Q1 2006Q3 2006Q1 2007Q3 2007Q1 2008Q3 2008Q1 2009Q3 2009Q1 2010Q3 2010Q1 2011Q3 2011Q1 2012Q3 2012Q1 2013Q3 2013Q1 2014Q3 2014Q1 2015Q3 2015Q1 2016Q3 2016
55、Q1 2017Q3 2017Q1 2018Q3 2018Q1 2019Q3 2019Q1 2020Q3 2020Q1 2021Q3 2021Q1 2022Q3 202214Self Storage Market ReportTransactional trendsThe self storage investment market has grown steadily over the past decade,but gained real momentum after emerging as a top performing asset class during the Covid-19 p
56、andemic.Last year saw several landmark deals-Heitman entered Ireland,Centerbridge made a second share purchase in Self Storage Group ASA and Safestore bought Carlyle out of their Benelux joint venture.In Spain,Bluespace were acquisitive with M&A and Pinebridge took a controlling stake in Necesito Un
57、 Trasteros.The economic landscape in Q4 saw rapidly increasing interest rates and high inflation.This significantly impacted real estate investment volumes across Europe,with many prime asset classes seeing investor withdrawal and liquidity issues heading into 2023.Although the economic landscape in
58、 Q4 saw rapidly increasing interest rates and high inflation,the self storage sector saw continued transactional activity even though volumes were significantly reduced in commercial real estate more generally.With secure underlying customer demand drivers,investor sentiment for self storage remains
59、 strong for high quality self storage assets.Looking ahead,the investment landscape in Spain remains very positive.With a lack of scalable M&A opportunities,the nature of transactions is likely to be dominated by consolidation of smaller operators and development.The relative undersupply in many of
60、the secondary cities,coupled with the potential to take advantage of falling land values and conversion opportunities,makes development attractive.The level of pipeline activity across Spain is at an all-time high and we expect to see strong growth in the number of new facilities over the next 12 mo
61、nths.415Self Storage Market ReportWe can support you with expert advice that reflects your business needs and prioritiesAbout JLLJLL(NYSE:JLL)is a leading professional services firm that specializes in real estate and investment management.JLL shapes the future of real estate for a better world by u
62、sing the most advanced technology to create rewarding opportunities,amazing spaces and sustainable real estate solutions for our clients,our people and our communities.JLL is a Fortune 500 company with annual revenue of$19.4 billion,operations in over 80 countries and a global workforce of more than
63、 102,000 as of September 30,2022.JLL is the brand name,and a registered trademark,of Jones Lang LaSalle Incorporated.For further information,visit Cristina TeranGil Consultant Corporate Capital Markets,STom Caines Head of Self Storage Capital Markets,EMEA Ollie Saunders Head of EMEA Alternatives,Valuation AGaston Blondeau Consultant Valuation Advisory,SIzeldi Loots Head of EMEA Self Storage,Valuation A