Translation: Original published in Finnish on 10/13/2026 at 9:06 am EEST.

Cityvarasto is clearly the largest self-storage company in Finland, with a real estate business complemented by van rentals and moving services. At the core of its growth strategy is the cost-efficient acquisition of real estate nearing the end of its life cycle and gradually converting it into self-storage facilities with an EBITDA yield of around 15% on the investment. Indeed, revenue has grown by an average of about 20% per year over the past ten years, and we estimate that the company will be able to continue its strong profitable earnings growth, albeit at a significantly slower rate than targeted (adj. EBITDA 11% p.a. 2026-30) in the coming years as well. We consider the valuation highly attractive from many angles (EV/EBITDA 2027e: 10x), considering the company’s growth outlook, market position, and moderate risk level. We initiate coverage with a EUR 17.00 target price and a Buy recommendation.

Disciplined and profitable strategy execution for over 20 years

CEO Ville Stenroos founded Cityvarasto in 1999, and its development has been very strong in the long term. It is Finland's only nationwide self-storage chain, with a market share of around 30%. The core of the strategy is to acquire affordable commercial properties at the end of their lifecycle in good locations and to convert them progressively into self-storage facilities based on demand. Commercial premises rentals generate cash flow even during the conversion phase, and rent per square meter for self-storage units is 2.6 times that of commercial premises. The model ties up less capital than new construction, and the historical EBITDA yield on investment of around 15% for established facilities is excellent in the real estate sector. This has resulted in a real estate portfolio with a balance sheet value of around 212 MEUR (>75% in the Helsinki area, Turku, and Tampere), comprising 82 self-storage facilities in over 30 cities, including those under construction. About half of the lettable area is still commercial premises, most of which will be converted into self-storage within the next 5–10 years, and the occupancy rates for both are at a good level. Nearly 90% of EBIT comes from the real estate business, and the remainder comes from ancillary services, i.e., PakuOvelle.com's van rentals and moving services. The role of these services is to direct customers to the self-storage facilities, and the synergies are strong (cross-selling, shared brand and online store, pickup points in storage facility yards). Around 25% of the company's customers used more than one of the group's services in 2024. Stenroos still owns about 47% of the shares, which greatly incentivizes management but underscores the risk related to key personnel.

Strong trends drive growth in the self-storage market

According to CBRE, the value of the Finnish self-storage market was around 47 MEUR in 2025, and the market grew at a yearly rate of about 6% in 2021-2025. Demand is driven by urbanization, abundance of goods, smaller living spaces, and an aging population, all of which are long-term megatrends. Rising to the Nordic average penetration level would mean storage capacity almost 50% higher than today. We expect revenue to grow by 15% in 2026 to 31.3 MEUR, which is right at the guidance upper end (31.2 MEUR). Adjusted EBITDA (12.7 MEUR) falls to the low end of the guidance range in our estimates due to the lower profitability of ancillary services, so we see a slight risk of a profit warning. In the company's 2024–2029 strategy period, we expect revenue to grow by an average of 12% per year, in line with the target, and by 7% per year in 2027–2030. We foresee the adjusted EBITDA margin rising to 45.2% in 2029, well below the company's target of over 50%. New facilities dilute profitability in the ramp-up phase, and the share of the low-margin moving business has risen. Key forecast risks lie in the heavy phase of investments, greater competition, and the profitability of ancillary services. In our view, the strong balance sheet (LTV Q2'26: 20.0%) allows for the targeted investment pace of 10 MEUR in the coming years.

Prime chance to buy into a company that creates long-term value

We attribute Cityvarasto's share price decline from its IPO price of EUR 16.00 to the exit of a former major shareholder (via a block trade at EUR 13.75) and lowered real estate sentiment due to rising interest rates. Insiders also purchased a significant number of shares in the block trade. Still, we believe the impact of rising interest rates on Cityvarasto is relatively moderate. At the current share price, EV/EBITDA multiples (2026e: 12.2x, 2027e: 10.2x) are 25–33% below the European self-storage peer median, which is also at a 10-year low. Even when considering the share of ancillary services, we believe the discount is too large given its faster growth than peers, and a good expected return does not require rising multiples. We expect adjusted operational EPS to grow by around 16% per year through 2030, which, together with the dividend, will clearly exceed our required return of 9.0%. A cautious SOTP (EUR 15.4) and our DCF calculation (EUR 19.1) highlight the attractive valuation. While our valuation is not based on the net asset value set by an external appraiser (EUR 23.43), we see the company as a potential target for acquisition whose pricing could align with NAV. Although the profit warning risk and weak real estate sentiment are short-term headwinds, we find the expected return to be very attractive for long-term investors.