Cityvarasto plans listing

[Iikka_Numminen]

Cityvarasto plans to list on the stock exchange.

Here is an interview with the company’s founder and CEO, Ville Stenroos.

Here is the press release itself:

Cityvarasto suunnittelee listautumismyyntiä ja -antia sekä listautumista...

Cityvarasto in brief

Cityvarasto is a Finnish company founded in 1999, operating in the self-storage, van rental, and moving services sectors. In addition to the parent company Cityvarasto Oyj, the Cityvarasto Group’s most significant subsidiaries include PakuOvelle.com Oy (“PakuOvelle.com”), specializing in van rental, and the moving services company Suomen Opiskelijamuutot Oy (“Opiskelijamuutot”). Cityvarasto’s business is divided into two business areas: real estate business, which covers self-storage operations with ancillary services and the rental of other premises, and ancillary services, which cover van rental and moving services.

As of June 30, 2025, Cityvarasto had a total of 72 self-storage facilities, with over 13,000 rentable self-storage units across Finland. The company’s network of self-storage facilities covers a total of 29 cities, including Finland’s 20 largest urban areas. In addition to self-storage units, the Company rents various multi-purpose business premises to its customers. In its real estate business, the Company utilizes a transformation and development operating model, which primarily consists of acquiring properties at the end of their lifecycle and transforming and developing them into modern self-storage facilities.

PakuOvelle.com is a wholly-owned subsidiary of Cityvarasto Oyj, specializing in van rental. As of June 30, 2025, PakuOvelle.com owned a total of over 500 vans and had approximately 260 pick-up and drop-off points. Pick-up and drop-off points are located in approximately 45 localities across Finland, including Finland’s largest cities. Opiskelijamuutot is a wholly-owned moving services company of Cityvarasto Oyj, currently operating in the Southern Finland region. Opiskelijamuutot carried out approximately 2,100 moves in 2024.

Cityvarasto’s strengths

Cityvarasto believes that the following factors, among others, are its key strengths:

• Cityvarasto is the leading player in its industry in Finland, measured by the number of facilities
• Cityvarasto operates in a market with strong growth drivers
• Cityvarasto has a proven business model
• Cityvarasto has good growth opportunities
• A transformation and development operating model focused on sustainable development

Cityvarasto’s strategy

Cityvarasto’s growth strategy focuses on real estate management and leasing, transforming existing properties into modern self-storage facilities, acquiring new facilities and transforming them into modern self-storage facilities, and acquiring smaller self-storage operators through acquisitions. With its strategy, the Company aims to maintain profitable growth and continue to improve relative profitability through economies of scale, increasing property occupancy rates, and continuous operational development. In line with its strategy, Cityvarasto acquires properties suitable for its business, converts them for self-storage use, and thus aims to increase the cash flow generated by the properties and the value of its real estate assets. In addition to organic growth, the Company aims to grow by acquiring, among others, smaller local competitors through acquisitions.

Cityvarasto’s growth strategy is based on the following areas:

1. Increasing cash flow by optimizing self-storage facility occupancy rates and rents
2. Converting premises for self-storage use in existing properties
3. Investments in new facilities
4. Acquisitions
5. Growing ancillary services

Cityvarasto’s financial targets and dividend policy

Financial targets are forward-looking statements and are not guarantees of future financial success. The financial targets presented in this release are merely targets and not forecasts or estimates of Cityvarasto’s future financial success, and should not be considered as such.

Cityvarasto’s Board of Directors has set the following financial and operational targets for the five-year review period commencing at the end of 2024 and ending at the end of 2029:

• Growth: The Group’s average revenue growth exceeds 12 percent per annum during the review period.
• Profitability: The Group’s operating profit (EBITDA) margin exceeds 50 percent during the review period.
• Investments: The Group’s investments average approximately 10 million euros per annum during the review period. The number of self-storage facilities is approximately 100 at the end of the review period.
• Indebtedness: The Group’s loan-to-value ratio remains below 35 percent during the review period. (The loan-to-value ratio is calculated by dividing the amount of interest-bearing debt, excluding IFRS 16 lease liabilities, by the fair value of real estate investments).

The Company’s Board of Directors has approved a dividend policy according to which Cityvarasto aims to generate the best possible long-term total return for its shareholders. The Company estimates that this is best achieved by reinvesting profits into the business to create additional growth by investing in the expansion of existing properties, the acquisition of new properties, and acquisitions. In the long term, Cityvarasto aims to pay increasing annual dividends, while in the short term, dividends are dependent on the Company’s investment activities.

Earnings guidance for the financial year 2025

The earnings guidance contains forward-looking statements regarding the Company’s view of potential developments in its various markets. They are not guarantees of the Company’s revenue or earnings development or future financial success. The Company’s business results may differ significantly from market developments, and the Company’s earnings guidance or other forward-looking statements should not be considered a promise of future development or results that may differ substantially from what is presented below.

Cityvarasto estimates that the Group’s revenue and adjusted EBITDA will grow in the financial year 2025 compared to the previous financial year, and the company’s management’s assessment of the development is in line with the company’s long-term financial targets.

Based on the performance of the first half of the financial year, the current market situation, business outlook, and the company’s assessment, the full financial year 2025 revenue is estimated to grow by 15–20 percent and adjusted EBITDA by 15–20 percent compared to the financial year 2024.

The guidance is based on the assumption that no significant changes will occur in the operating environment during the remainder of the year.

Cityvarasto’s reported revenue for the first half of the financial year 2025 was 12,611 (10,681) thousand euros, an increase of 18.1 percent compared to the corresponding period of the previous financial year, and reported adjusted EBITDA was 5,537 (4,676) thousand euros, an increase of 18.4 percent compared to the corresponding period of the previous financial year.

[JHeiskanen]

Excerpt from the CEO’s interview.

“If we didn’t invest, we would have such a problem that we would have to pay a lot of dividends.”

Just based on the fact that dividends are seen as a problem, one might consider investing

[Sijoittaja16]

Is information on capital gains still available? (the message must be at least 50 characters long)

[TZ1]

The listing focuses on share sales, but on the other hand, the anchor investors and advisor (SEB) seem good. The company’s founder continues as an owner, and the valuation does not seem too stretched. The anchor investors’ commitments hold if the valuation is below 120 million, which makes the EV/Sales multiple quite bullish, but on the other hand, the EBITDA multiple still starts with one.

In the USA, there were also a few successful IPOs last week. Could this be the ingredients for a new upturn?

[Karhu_Hylje]

According to a Kauppalehti article, the targeted market value upon listing would be €135 million, and it made a net profit of €3.7 million last year. Doesn’t this sound quite

[Ilkka6]

There are also a few companies in this sector listed on stock exchanges internationally, often as REITs. At least:

• Public Storage (NYSE:PSA), market value now $50 billion
• Extra Space Storage (NYSE:EXR), market value now $31 billion
• CubeSmart (NYSE:CUBE), market value now $9 billion
• National Storage REIT (ASX:NSR), market value now A$3.4 billion
• Big Yellow Group (LON:BYG), market value now £1.8 billion
• Safestore Holdings (LON:SAFE), market value now £1.4 billion

[Tiloski]

I am a customer at the warehouse and have used the van rental a few times. Both of these services work very easily from the customer’s perspective, and it’s noticeable that the customer experience has been carefully refined. In neither service have I encountered any employees, and the operations seem highly automated.

Regarding growth and profitability, it seems worthwhile to participate in the IPO if the price is right.

[mrbeast]

Considering the company’s growth targets and the fact that there is constantly increasing demand for small storage units in growth centers, one could imagine the price being quite okay. Whether the growth materializes is another matter.

@Karhu_Hylje

In addition, fair values have risen by over 50% last year.

There’s nothing surprising about the rise in fair values. When acquiring a property, it is assessed as a low-rent industrial/warehouse hall, where the rent level is roughly between 5-12 €/M2, and the property is valued according to its intended use. Then Cityvarasto changes the intended use to a self-storage facility, and rents rise to somewhere between 17-25 €/M2, and the property’s cash flow potential increases significantly. → fair value increases. (The veracity of the valuation can always be questioned, but if the valuation has been made by an independent AKA appraiser, which the bank usually requires to obtain financing, the matter is quite clear).

[mrbeast]

EDIT/ addit:

As a business model, this is excellent in the real estate market in itself, because by converting poor, unattractive/otherwise vacant halls (which can often be acquired quite cheaply relative to their current fair value) into self-storage use, one can build a large real estate portfolio on their balance sheet. This continuously provides the opportunity to leverage new properties both through cash flow and through the increase in fair values, as collateral value is constantly released quite significantly due to the rise in the fair values of the properties.

Down the line - as the real estate portfolio and business grow, managing the portfolio (and its maintenance and repairs) can become a problem, but ideologically speaking, as the company grows, its balance sheet value expands, and the larger the balance sheet, the more diversified the risk becomes from the financier’s perspective (assuming debt levels are managed wisely). Similarly, profitability in such a business should scale quite well.

As the company matures and growth slows (i.e., when properties no longer need to be acquired at the same pace), the company can, if it wishes, begin a controlled divestment of properties, which, in addition to business cash flows, allows for quite good additional capital returns at a later stage. Whether this is then commercially sensible or necessary is another matter.

[Marcus_Junius_Brutus]

It’s been a while since an interesting IPO, one that brings a new kind of industry to the selection of the local stock exchange. At least initially an interesting listing, but in the end, it’s all about the subscription price. If the price seems overvalued, as prices often are during an IPO, then I might also skip participating. It’s always possible to buy the stock from the exchange if need be. But I will follow this listing with interest

[Virtuaali]

@mrbeast

As the company matures and growth slows down (i.e., when properties no longer need to be acquired at the same pace), the company can, if it wishes, begin a controlled divestment of properties, which, in addition to the business’s cash flows, enables quite good additional capital returns at a later stage. It’s another matter whether this is then commercially sensible or necessary.

I don’t believe that divesting warehouses would yield any additional returns. The entire balance sheet with its fair values only represents fair value for this company, and for outsiders, it is not, unless there is a truly liquid market and operators who can run the warehouse rental business as efficiently and at the same scale as Cityvarasto. After purchasing a sheet metal hall, the x00.000e spent on equipping it does not necessarily bring any value to others interested in the property’s size and location, but rather costs for restoration.

If warehouses were sold as sale&lease back at fair value and assets were freed from the balance sheet, those assets would over time be consumed by long lease agreements or would eat into the business’s cash flow, which investors would require from such specialized premises.

[mrbeast]

@Virtuaali

If warehouses were sold via sale&lease back at fair value and assets were freed from the balance sheet, those funds would over time be spent on long lease agreements or would eat into the business’s cash flow, which investors would expect from such specialized facilities.

Yes, I was playing with some silly ideas in my previous comment. Fundamentally, real estate is probably such an essential part of the business that it won’t be vomited out of the balance sheet with S&LB schemes, perhaps.

But it’s probably never that easy a question. It’s largely about the long-term cost-benefit vs. return on equity question, no matter what the business model. At this stage, the prerequisite for growth is a leveraged balance sheet and strong cash flow, but in the long run, as the business and its various sub-areas develop, return on equity becomes a relevant metric, and IF the company could operate purely a small storage business by selling off the assets and only leasing the exterior walls and roof to itself, there could be its own niche there. It would certainly increase certain risks and cost levels, but acting as a tenant removes the need for investment (even if it is indirectly paid for in terms of cash flow).

But as said, it is certainly not in the company’s interest to sell off the cornerstone of its core business. Operations are surely much more profitable with owned properties.

[Tomi_Lindell]

Old industrial properties into profitable self-storage units!

Yesterday, I visited #Cityvarasto’s IPO event to learn about the company as an investment target.

Cityvarasto is a true growth company. The company’s average annual revenue growth (CAGR) has been 20 percent between 2015 and 2024. Growth has been mainly organic, but it has also included acquisitions, such as Pakuovelle.com. The company has increased its dividend for ten consecutive years.

Cityvarasto’s real estate portfolio had a fair value of 194 million euros in 2024. Of the properties, 65 percent are located in the Helsinki metropolitan area and 35 percent elsewhere in Finland. The average rental yield is as high as 15 percent. The occupancy rate of the properties is 79 percent, and the average duration of rental agreements is 27 months. Approximately 60 percent of Finns live within a 15-minute distance of Cityvarasto’s self-storage units, which the company considers an important competitive advantage.

The self-storage penetration in the Finnish market is still low compared to key benchmark countries. The company’s business model is to convert old industrial properties into profitable self-storage units, primarily for consumers. The funds raised are intended to be used mainly for growing this business. The company aims to acquire more properties, expand the areas of existing storage units, and potentially make acquisitions. Cityvarasto is not currently building new self-storage units but plans to explore this possibility during the strategy period. The number of locations is planned to increase from the current 72 to 100 during the strategy period. The company is not aspiring to expand into international markets.

The company’s goal is an average revenue growth of over 12 percent, which it aims to achieve both organically and through acquisitions. The EBITDA margin is currently around 45 percent, but the aim is to raise it to 50 percent during the strategy period. Unlike real estate investment companies generally, the company aims to keep its debt-to-equity ratio low. The company positions itself as a growth company, and at least in the initial phase, business profits will be reinvested in the company rather than distributed to owners.

I met the company’s CEO and founder, Ville Stenroos, at Miltton. He seemed very enthusiastic about the company’s long-term prospects. Stenroos emphasized that the company’s competitive advantages are strong expertise in acquiring industrial properties, a strong brand, and investments in digitalization. According to him, the company’s business is more consumer-oriented than real estate investing.

[Sijoittaja-alokas]

@henrielo has written a good analysis of Cityvarasto.

Kostiander stated on several occasions that Cityvarasto’s business is by nature not only real estate business but also consumer business. Stenroos, in turn, reminded during the company’s presentation event about the strength of the brand and good customer satisfaction.

The self-storage sector appears more stable cyclically than traditional real estate investing.

Subheadings:

1. Megatrends support growth
2. Van rental and Student moves complement the real estate business
3. Stenroos explains the growth drivers
4. Balance sheet kept in shape
5. What is Cityvarasto’s value?

Analyysi: Pörssin ovea koputtaa laadukas kasvuyhtiö Cityvarasto

[Virtuaali]

Well-written article. I wish the company would dare to face a ‘Roast’ or ‘Grill’ quickly.

I’m preheating (with the power of just a rice cooker) mainly IFRS and fair value, and partly JLL. The fair value of warehouse properties is estimated at EUR 197 million in H1-2025. I’ll be lenient and take that H1-2025 adjusted EBITDA, as I truly believe there will certainly be exceptional costs. Adjusted EBITDA of EUR 11 million per year, of which the share of subsidiaries is mentioned as EUR 1.9 million, leaving EUR 9.1 million for the warehouse business. The yield requirement for all square meters is therefore 9.1 / 197, or 4.6%. In the article, the square meters are 121,000 m2, which are divided into small storage units 61,000m2 (50.4%) and commercial premises 56,000m2 (46.2%). Some square meters are missing, but let’s not focus on that. The yield requirement for commercial premises could be, for example, 5.1% (KTI’s Spring 2024). Warehouses would then have a roughly 4% yield requirement. Sounds like a fair value to me

I’ll give a silly comparison. My investment company has one 11m2 storage unit, which I rent out in Helsinki. The property has been rented for about 5-6 years and the occupancy rate has

[Silveri]

Have you noticed that on the list of Cityvarasto’s largest owners there is an investment company that invested in a Norwegian self-storage company that was listed on the Oslo Stock Exchange? The self-storage company was subsequently sold to a US private equity firm. At the time of the transaction, the target company’s revenue was €24 million and its market value was €240 million. Could something similar happen to Cityvarasto?

[Tomi_Lindell]

cityvarasto’s IPO Offering Terms Just Released. Preliminary price range €14.89-17.02, which corresponds to a market value of €120-135 million.

[TJT]

I had already looked into this a bit, and the case seemed interesting enough that I might have even considered joining, but with this valuation, there’s no need to even think

[Farseer]

An interesting company, and in itself, it’s a good thing for society that disused sheet metal halls find a new purpose as self-storage units. However, at the time of the listing, the stock’s valuation is unsustainably high, especially considering that the valuations of small and medium-sized companies on the Helsinki Stock Exchange are, on average, quite low.

Will keep an eye on it if the valuation drops to a reasonable level and the convincing performance continues.

[Sijoittaja-alokas]

@Karo_Hamalainen’s guest was Cityvarasto’s CEO and founder Ville Stenroos

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Please see the disclaimer at the end of this episode description!

Cityvarasto, which plans to list on the Helsinki Stock Exchange’s First North marketplace, is the King Kong of Finland’s self-storage business.

Cityvarasto’s real estate operations’ revenue last year was just over 17 million euros, while the entire Finnish self-storage market was worth 41 million euros. Based on these figures, Cityvarasto’s market share was already over 40 percent.

*Cityvarasto, which is aggressively pursuing growth, will likely be able to grow for some time by gaining market share, but increasingly, growth depends on the overall market’s expansion. *

What is the growth of the Finnish self-storage market, CEO and founder Ville Stenroos?

“I have closely followed Sweden and other Nordic countries. In the Nordic countries, penetration per person is about 50 percent higher than in Finland. We are very similar countries and cities, and the cultures are similar. We can’t catch up [with Sweden’s per capita self-storage square footage] because it’s growing so rapidly in Sweden! In Britain, it’s more than double per capita compared to Finland, and 15 times higher in the United States. And they are still growing,” Stenroos replies.

“In the United States, over the past 40 years, self-storage has been the fastest-growing real estate sector – and the most profitable of all,” he says.

DISCLAIMER:
Cityvarasto is planning an initial public offering (IPO) and a listing on the Nasdaq First North Growth Market Finland marketplace. The subscription period for the public offering began on September 24th and is expected to continue until September 30th, 2025.

Investors are advised to read the prospectus before making an investment decision to fully understand the risks and benefits associated with a decision to invest in securities. The Finnish-language prospectus for the planned listing has been published on the company’s website at cityvarasto.fi/ipo.

In cooperation with: Cityvarasto