Glossary | Shurgard Investor Relations
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Glossary

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Last updated 20/01/2021 17:35:30

Average Annual Net Rental Rate (“AANRR”)
Annualized Rental revenue divided by the average rented area (expressed in sqm) over the same period

Constant Exchange Rate (“CER”)
Certain of the above-mentioned non-GAAP measures, such as EBITDA, are also presented at constant exchange rate (CER) vs actual exchange rate (AER), in order to highlight the underlying operating performance vs. the impact of changes in exchange rate on the particular KPI.

Cost of debt
Ratio resulting from total expenses related to the Financial Debt of the Company, divided by the Financial Debt. Expressed as a percentage

Earnings Before Interest, Depreciation and Amortisation (EBITDA)
EBITDA, which represents reported operating earnings before interest, tax, depreciation and amortisation, excluding (i) valuation gains from investment property and investment property under construction and (ii) losses or gains on disposal of investment property, plant and equipment and assets held for sale.

EPRA
European Public Real Estate Association. This organization has issued best practice recommendations with the intention of promoting the transparency, comparability and relevance of the published results of listed real estate companies in Europe 

The Group mainly uses KPIs that are issued and defined by EPRA with the aim to align the various accounting and reporting methodologies for the public real estate sector in Europe in order to increase the overall transparency of the sector by providing performance measures that result meaningful information for the readers of the financial statements.

The EPRA KPIs used by Shurgard are based on the EPRA best practice guidelines dates October 2019.

EPRA Earnings
Profit or loss for the period after income tax but excluding acquisition costs relating to business combinations (net of taxes and non-controlling interest), gains or losses on the revaluation of investment property (net of taxes and non-controlling interest), gains or losses on the sale of investment property, assets held for sale and property, plant and equipment (net of taxes and non-controlling interest)

Adjusted EPRA earnings
EPRA earnings excluding deferred tax expenses on items other than the revaluation of investment property

EPRA Net Asset Value (EPRA NAV)
IFRS metric calculated based on Net Asset Value, but excludes the fair value of assets and liabilities measured at fair value that are not expected to crystallize in normal circumstances, such as the fair value of derivative financial instruments (if applicable) and deferred taxes

Fair value of investment properties
Corresponds to the total value as per the external valuations carried out by Cushman and Wakefield on each of the investment properties, investment properties under construction and pre-development costs not valued by Cushman and Wakefield

Financial Debt
Long-term and short-term interest-bearing loans and borrowings, including finance lease obligations and excluding debt issuance costs

G&A expense
General, administrative and other expenses minus depreciation and amortization expense

Insurance penetration ratio
Ratio, expressed as a percentage, resulting from number of new customers in a defined period choosing to be covered by Shurgard’s insurance divided by total new customers in such a period

Loan-to-value (“LTV”)
LTV, which stands for loan-to-value, represents the Groups Net Debt divided by the fair value of investment properties, expressed as a percentage and is a commonly used leverage KPI in the real estate industry. The calculation can be found in Note 36 to the Annual Report. The Group reviews its capital structure based on this metric with the primary objective to ensure that it complies with its debt covenants and to maintain a target loan-to-value ratio below 35%.

Long leasehold
Long term leases with at least 80 years remaining duration as of 30-Jun-2018

Maintenance capex
Includes health and safety, roofing, property, elevators, “heating, ventilation & air-conditioning” (HVAC) and signage capex (as per Management definition)

Major cities
Non-capital cities with certain level of population (as per Management view per country)

Move-ins
The number of new rent contracts in the period during which they start generating revenue 

NAV
Net Asset Value

Net (financial) debt
Net debt represents our long-term and short-term interest-bearing loans and borrowings, including lease obligations and excluding debt issuance costs, less cash and cash equivalents. This liquidity metric is used to evaluate the Group’s capability of repaying all its debts, were they due immediately.

Income from Property (“NOI”)
NOI is calculated as “Property operating revenue” (A) less “Real estate operating expenses” (B) for the relevant period and can be reconciled to the closest line item in the financial statements as follow:


  • Income statement line item Reference to Annual Report
  • Rental revenue Note 6
  • Insurance revenue Note 6
  • Ancillary revenue Note 6
  • Property operating revenue (A)  
  • Other revenue Note 6
  • Real estate operating revenue Statement of Profit and Loss

  • Income statement line item Reference to Annual Report
  • Payroll expense Note 7
  • Real estate and other taxes Note 7
  • Repairs and maintenance Note 7
  • Marketing expenses Note 7
  • Utility expense Note 7
  • Other operating expenses Note 7
  • Property lease expenses Note 7
  • Doubtful debt expense Note 7
  • Cost of insurance and merchandise sales Note 7
  • Real estate operating expenses (B) Statement of Profit and Loss

NOI measures the financial performance of our properties. It focusses on property operating revenue (generated through the lease of storage units and related activities, including insurance referrals and the sale of storage products and packaging) less real estate operating expense. As such it is a key performance indicator of the performance of the Group’s core operating activity.

The Group’s CODM periodically receives and reviews NOI when making capital allocation and operating decisions. Further, NOI represents a crucial input in the valuation of the Group’s investment property.

NOI Margin
The NOI margin is calculated as Income from property (“NOI”) divided by Property operating revenue for the relevant period and measures the operational performance and efficiencies of our properties as it shows in percentage how much property operating revenue remains after deduction of the real estate operating expense. As with all ratios, it also allows easier comparison within our industry, as it eliminates the need for size or currency adjustments.

Occupancy
Ratio, expressed as a percentage, resulting from the rented area divided by the rentable area

Other revenue
It comprises management fee revenue, rental revenue derived from assets held for sale, partnership income from self-storage operations and rental revenue from stores under management contract

Project cost
Defined as direct project cost (acquisition of land/building, development, construction) plus development fees, excluding absorption costs (i.e. capitalized interest and carry costs)

Property yield
Expected stabilized NOI including ancillary revenue divided by project cost

Operating profit before property related adjustments
This is a commonly reported KPI by real estate companies. We believe that this subtotal provides improved structure to the profit and loss information and enables investors to better analyse and compare our earnings with those of other companies.

RCF
Refers to Revolving Credit Facility or revolving loan facility 

Redevelopments
Projects increasing the lettable area of stores by more than 10%

REIT
Real Estate Investment Trust

Revenue or “Property Operating Revenue”
Real Estate Operating Revenue excluding Other Revenue 

Revenue per Available Square Meter (“RevPAM”)
Annualized rental revenue divided by the average total lettable area in sqm over the same period

Same Store and Non-Same Store
The Group’s most important APM, as also apparent from the segment reporting, relates to Same Store and Non-Same Stores. Shurgard classify as “Same Stores” (i) all developed stores that have been in operation for at least three full years, and (ii) all acquired stores that we have owned for at least one full year, each measured as of January 1 of the relevant year. Any stores that are not classified as Same Stores for a given year are presented as “Non-Same Stores”, comprising (i) all developed stores that have been in operation for less than three full years (“New Stores”) and (ii) acquired stores that we have owned for less than one full year (“Acquired Stores”), each measured as of January 1 of the relevant year.

As a result, on a year-to-year basis, the size of our Same Store network changes based on the reclassification of stores from Non-Same Stores to Same Stores following the time periods described in the prior paragraph. Under some circumstances, for purposes of these full-year metrics, this results in significant changes in financial and operational metrics presented on a segmental basis from year to year.

In line with common practice in self-storage and other industries (e.g. retail), Same Store information is a crucial factor to assess the performance of the organic business, while providing at the same time information on the expansion activities of the Group. For this reason, the Chief Operating Decision Maker (“CODM”) reviews the performance of the Group based on this distinction (see also note on Segment Reporting in the Annual Report) and Same Store information represents part of the numeration for senior management, as can be seen in the renumeration report included in the Annual report.


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