Good day everyone, and welcome to today's Shurgard full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing star one on your touch-tone phone. You may withdraw your question from the queue by pressing the pound key. Please note this call may be recorded. I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Caroline Thirifay. Please go ahead.
Thank you, Ashley. Good morning, everyone. Thank you for joining us for the full year 2021 results. I'm here with Marc Oursin and Jean Kreusch. Before we begin, we want to remind you that all statements other than statements of historical facts included on this call are forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected by the statement. These risks and other factors could adversely affect our business and future results that are described in our earnings release and in our securities reported information. You can find a press release and an audio webcast replay of this conference call on our shurgard.eu website. With that, I will turn the call over to Marc.
Thank you, Caroline. Really happy today to share with you our great results for the year 2021. I'm on slide two, and let's start with the numbers, specifically high level of this year 2021. All of them are at constant exchange rate. The top line, 9.5% growth versus last year. Amazing number. We've been able to keep the cost under control. That's why our NOI grew faster, 11.3%, which is a great performance from I would say the operations in the whole company. This has been fed also by the same-store performance, which is of course the bulk of our company, with a 7% growth of the top line, which is one of the highest ever we had.
The 7% growth of the revenue was actually based on two things. First, a really high occupancy. We've been able to gain 1.9 points versus last year and reaching 90.4. At the same time, a major increase on the rates for our existing customers to 5.3% versus last year. Of course, all of that has brought up our NOI margin for the same-store by 1.6 percentage point, which is very significant. Bottom line, we have been able to deliver an adjusted EBITDA earnings of EUR 131 million, which means a growth of more than 9% over the year.
We have proposed a dividend payout of 1.17 EUR per share, which is a growth of more than 10% versus the previous year. Let's go to the next slide. If you look at the specific elements on the top of this key financial metrics that I've shared with you, couple of things. The first one, we started in 2020, at the end of 2020, a commercial tool that we call the e-rental, which is a seamless actually conversion for customers. The customers can use their mobile phone or desktop and then can do the whole process online and get their contracts and therefore go to their unit. We had, as of May 2021, all our markets proposing this to our customers.
For the whole year we have been able to to get 24,000 customers through that line of business, which is very significant due to the fact that it's already representing a quarter of the total contracts that we have done during the year. Secondly, on the top of this, we are accelerating in what we call the digitalization of the company. A couple of examples are the Bluetooth access to our stores. You have with you your mobile phone and you get to the gates and the gates are opening right away and same thing for the building and you can get to your unit very simply. This will be rolled out during the course of the year 2022.
We have also started to implement what we call a BMS, which means building management system. It's, I would say, simply and in a way, setting up and putting sensors within the building and helping us to have a better anticipation of the maintenance and the control of the property. Jean will come back to it later in the presentation with more details than me. I would say in terms of highlights, last but not least, on the ESG front, after these three years being rated by GRESB, we have been able to achieve five star, which is a fantastic achievement, with a score of 87 out of 100. We became the sector leader among our peers, which is a really astonishing result.
This is a result, I would say, of the team and the whole company regarding this performance. Fantastic performance. If we go to slide four, let's talk about development, so the physical increase of the company, so square meters, if you prefer. The year has been 2021 very active. Isabelle and her team have been able to bring the level of the pipeline to almost 10% of our total footage, so roughly 120,000 sq m. This has been achieved by, in 2021, a couple of things. First, we have signed five redevelopments. You remember that what we mean by redevelopment is extending existing buildings that we own and we operate.
This took place in Germany, in Munich, Gouda, the city of the cheese in the Netherlands, in Hoofddorp, and London and Amsterdam. On top of that, we have opened almost 40, close to 40,000 sq m with six properties, invested EUR 80 million in London, Hoofddorp, Paris and Berlin. We have acquired six properties through two transactions in London, very central London actually, in the Camden area and also around Belgravia, for EUR 50 million, with an expected yield at maturity of 8%. How are you doing for 2022 and 2023? Well, we are on track with what we have shared with you guys during the investor day. We have two redevelopments that will take place in Munich and London.
We have three projects are currently under construction in Paris and North Rhine-Westphalia in Germany, Düsseldorf and Cologne. We have nine projects signed, more than 40,000 sq m, again in Hoofddorp, the Netherlands, Paris, London and Berlin. Let's have a quick highlight on the balance sheet. We are pretty, I would say, healthy there. A very strong position. You remember that we have done a refinancing in January last year, 2021, with a USPP, and we have currently more than EUR 200 million cash at the end of December. The EPRA NTA for the net tangible assets grew by almost a quarter, 23.6% over the previous year. I'm sure you may have some questions and Jean will come back to you on that.
If you look at specifically the debt globally, we still have some reserve there. I mean, we have the capacity to use EUR 250 million from our revolving credit facility. On the top we still have EUR 250 million, what you call shelf facility, that we could use. I will not come back on the USPP. That was also a great achievement and the remaining debt. If you look at the result of that, the LTV is still low, around 17% at the end of December, which is in a way positioning us well if the interest rates are going up. The impact on the P&L would be quite minor.
If you look at a more operational metric, net debt over EBITDA, we are below 4x at the end of 2021 with 3.8x. Just a quick numbers regarding Q4 2021 versus 2020. Well, here very simply, it's a great acceleration. We have seen that in Q3 versus the beginning of the year in 2021. Q4 was even better than Q3. And numbers are astonishing. You know, 11.6% on the top line, the NOI 16.5%. And we have been able also to have really great numbers for the same store. If we go to the next slide, which is the outlook for 2022. A couple of information to be shared with you here.
The first one is that you remember that during the investor day we have said that medium term we will have a run rate of the growth of the company on the top line that will be 6%. We have decided that based on what we have seen in Q3, Q4, and the start of the year 2022, actually to raise the 6%- 7% specifically for the year 2022. Second, we do confirm the fact that we will have 12 more properties, which is almost 50,000 sq m in 2022 versus 2021, spread with six new properties that we are developing, under construction actually, currently. 20,000 sq m coming from M&A acquisitions.
An important factor also here, because we are not a REIT, is our effective income tax rate, and it's forecasted to be below 20% for the year 2022, based on the adjusted prior earnings before tax. That's the definition of this effective tax rate. I will not go through all the details of this medium-term guidance. I think it's pretty clear. I mentioned the 6%. We still have an ambition to grow the margin by two percentage points and reaching this by 2024 and still continue to grow every year by point two. Next year we will open and buy in the end 13 properties. 2024 we go for 90,000 sq m, which means 16 properties, actually brought to the platform. 10 through organic development and six, which is 20,000 sq m, through M&A.
We maintain our target of LTV that is around 25% or close to 25%, and express as an operational metric that is the net debt over EBITDA to be at 4x-5x . Short term we can reach 35% if it's necessary, but the target, the run rate is 25%. Regarding taxes, sorry, the effective rate that I was mentioning for 2022, that is at 20%, is supposed to reach 22% by 2025, and should grow nicely from 20% to that number of 22% in the coming three years. Regarding the dividend, as we have shared with you during the investor day in September.
We are having a dividend for the year 2021 of EUR 1.17 per share, which is actually a payout of 80% of our EPRA adjusted earnings. We keep that amount of EUR 1.17 per share for the coming years. We keep also the structure of payment of that dividend, which is more like 50-50, 50%, so EUR 0.58 in October and EUR 0.59 in May. That's the situation for our medium-term guidance. After that, happy to turn to Jean for the rest of the presentation, and I will come back to you for the conclusion and your answers and questions.
Thank you very much, Marc. Looking back at our financial results in 2021, we delivered a very strong performance year-over-year, with Q4 showing an acceleration. Our revenue, total company has grown by 11.5% at constant exchange rate for the last quarter of the year, while we grew by 9.5% for the year. Our NOI grew by 16.4% at constant exchange rate for the quarter and by 11.3% for the year, following the strong revenue growth and demonstrating once more the scalability and continuous digitalization of our operating platform. Our NOI margin is up by 1 percentage point year-over-year at 64.9%.
Our G&A expenses increased due to higher development costs as we built up our team, costs relating to the new stock option plan, some one-off expenses relating to ESG certification, and VAT refunds received last year. Finally, our adjusted EPRA earnings grew by 9.4% at constant exchange rate to EUR 131 million in 2021. On page 10, our income from property at constant exchange rate continue to show our ability to grow the top line through our same and new stores while leveraging our standardized and digitalized platform to deliver economies of scale in keeping the cost basis low.
We end the year with an occupancy at 90.1%, up 0.8 percentage point over 2020, while the average occupancy for the year at 90.4% was up 1.9 percentage point for our same stores. Our same-store average in-place rent increased by 5.3% over 2020, with an acceleration in Q4 with an 8% increase over Q4 2020. On page 11, our three levers of growth are contributing to the 12.5% increase in NOI, with the same-store NOI growing by 9.7% at constant exchange rate and contributing EUR 16.6 million to the growth, while the acquisitions and development added another EUR 3.1 million.
Moving on to the cash flow, on the next page, the improved operating cash flow and the issuance of a green bond offset investments we made in new properties, dividend and interest payments. On page 13, we continue to show a very robust balance sheet with EUR 290 million of cash, leaving us plenty of funds for future developments and acquisitions. Our EPRA NTA grew by 23.6% from EUR 2.5 billion in 2020 to EUR 3.1 billion in 2021, following positive fair value revaluation of our investment properties, mainly resulting from the positive impact of higher rents and the continued compression of rates, of cap rates. On the debt side, I mentioned earlier the drawdown of the EUR 300 million green bonds with a 10-year maturity and a fixed rate in July.
We also extended our EUR 250 million undrawn revolving credit facility by two years to 2025 and secured a EUR 250 million shelf USPP facility. Slide 14 illustrates the strong growth of our EPRA NTA, 45% increase since 2018, while the LTV net debt to EBITDA and ICR ratios underpin our conservative and robust balance sheet. Finally, as Marc already elaborated earlier on, we have a very significant pipeline. At the end of December 2021, 10% of our net rentable sq m, up 1% since Q3, has been acquired, developed, is under construction, or has been signed. On the coming slides, let's now look at our move towards more digitalization of our business and a more data-driven approach will help us to make better decisions faster.
We are convinced that our investment in technology is enhancing the customer experience and addressing the prospect's expectations. Currently, at least 70% of our customers are reaching us through digital platforms. This is why we built a talented team that employs a sophisticated approach to web design optimization. Our e-rental solution is clearly a demonstration of our capacity to be ahead of the game. Going forward, we will be launching a customer pick app, allowing our customers to access their accounts, but also to access the properties via their phones as we are rolling out this year a fully automated and centralized gate system. We also continue to use the information we gather through our various customer accounts on how and when they use our properties to gain unique insights, improve customer experience, enhance our operational process, and streamline costs.
Our expertise and integrated systems allow us to take advantage of the scale of our platform, providing us with a unique opportunity to leverage technology and use data as an asset. Ultimately, this delivers exponential value to our customers, employees and shareholders. Slides 6-17 illustrate the success of our e-rental offer, which as Marc mentioned, we already have 24,000 customers at the end of December. It got 25% of all our movings. On the next page, we highlight the importance of technology to improve the overall sustainability and security of our building. Two elements that are top of mind for our customers, but also employees and shareholders. I will now hand over to Marc for the conclusion.
Thank you, Jean. You have seen really great numbers, great projects. Let's go now to the slide 19 and Jean, myself, we thought it was good to share with you this slide, which is a kind of wrap up of the situation. I take also the opportunity here to thank you for your trust in the IPO and also for your investments, for the ones who are shareholders, and also your positive comments that we had along the past three years. Just again, in a very, let's say short slide, these are the key points of, let's say, differentiation and also assets of Shurgard. The first one, nonetheless, yes, we are a unique platform and our leadership will continue to increase. Secondly, the quality of assets. We are in real estate here.
The buildings, two-thirds of our buildings are purpose-built, so dedicated to this industry, and they are young, and we are the owners of them. The platform we have, since now almost 8-10 years, is fully integrated, scalable, as we have demonstrated with our capacity to increase the margin. We continue as a proptech to invest in the IT infrastructure and the digitalization. The runway of the industry in Shurgard is fantastic. I mean, the density of population in the major cities of Europe continues to go up. Secondly, we have a clear and balanced market between supply and demand. Clearly the wave on which we are surfing, it's pretty big and long and powerful. Performance, I will not come back. I mean, the papers and the numbers are talking for themselves.
Expansion, we have a great team and people are working hard to deliver this 10% pipeline. By the way, we are the largest by the size, and by the way, we are the one who are growing the fastest relatively, but also in absolute number in square meters, which is a fantastic achievement. M&A, we are the most active player since 6-7 years. Vincent and his team is doing great thing. Here the know-how that we've been able to develop, whatever the size of the deals and the skills we have for the integrations are really unique, meaning the speed and the capacity to plug into our systems a newcomer into the Shurgard family. ESG-wise, while we continue our roadmap. Here we have this net zero carbon operational, net zero carbon objective by 2030.
We have done 100% of our EPC of all the portfolio, so the 250 properties. More than 80% of them have an A rating or A+, which is also, again, the proof of the quality of the buildings. BREEAM, we use BREEAM as a reference also for all our properties. Regarding the balance sheet, very strong and able to be leveraged and to be deployed, if we have to do necessary actions with it. Therefore, in the end, again, more and more reasons to continue to be a shareholder or to invest even more within Shurgard. Thank you for your attention and therefore happy to answer your questions.
Thank you, Marc and Jean. Now we open the line for your questions.
We will take our first question from Marcus Golesso with Bank of America. Please go ahead.
Yes, good morning. Thank you very much for the call and congratulations for the results. I have the first question on the dividend and your dividend freeze. I don't know if it's pure hazard, but in my understanding, the wording has changed a bit in your report, so you're not giving the number of years black on white anymore. I saw this sentence saying you will continue to review your dividend policy to ensure to remain competitive. Does it mean that the dividend freeze is set in stone or that there is actually some flexibility if results were better than you expect, for instance, for the dividend to change or to be increased?
Hi, Marcus. This is Marc. Thank you for the question. No, the fact has not really changed. I mean, do you hear me?
Yep.
Yeah. Okay, good. Sorry. No, the point here is just to say that yes, we have, as you said, frozen the dividend per share, and we keep, of course, the freedom to change that decision depending the situation we are facing. We know also that we are looking at the total shareholder return, which is the dividend plus the growth of the earnings, and we need to be competitive. Of course, it's a not forever decision, and depending the circumstances and situation, we're able to decide some changes there.
Okay, thank you. A question on your thoughts on potential REIT status in some of your countries. Is there anything you started or what are the possibilities you have for instance in the U.K. to gain a REIT status?
Clearly, all of you do know since the IPO that we are not a REIT. We have said that many times. Obviously we pay taxes in the different jurisdictions where we are operating, which is very logical because we know that, for example, the REIT status does not exist in the Nordics, that is Sweden and Denmark. Conditions to become a REIT depend on the countries are very different actually. We are looking at it and we have not yet decided what we will do. We are still studying the situation country per country, but of course it's a real point of attention as Marc Oursin mentioned in his last or pre-last release. Yes.
Okay. Thank you very much.
Thank you, Marcus.
And once again, to ask a question over the phone, please press star one on your touchtone phone.
Yeah.
We have a question from the webcast here. Maybe from KBC Securities. Why is there an acceleration of 90,000 sq m only in 2024, not earlier? What will change?
Okay. Thank you, Line , for the question. Again, I repeat. Back to the Investor Day, more or less, if you take the 90,000 sq m, which is the sum of organic growth of 70,000 sq m plus 20,000 sq m coming from M&A. This is the target as of 2024. Actually, it's mainly coming from the organic growth. Currently, we are doing, more or less, 35,000 sq m a year. And we said, you know, we need two years of ramp up because it's more or less it takes two years to get first a deal with the seller of a land, to get the building permit, to build the property, and that's why you have this ramp up.
If you look at this a different way, which is with number of properties, which is maybe a bit more simple. We in 2022 and 2021 were supposed to open five properties organically and to buy six properties from competition. Five and six, 11. In 2023, we should have seven organic properties. 5-7 plus still six coming from M&A, so 13. Total company going from 11- 13 in 2023. Then reaching 10 properties organically in 2024, plus six M&A, so 16, which does represent the 90,000 sq m. That's the plan.
Of course, if we can accelerate even more in 2023 of the number of stores, and to be closer to the 90,000 sq m or to have more opportunities to do M&A in 2023, of course, we'll do it. No worries on that. I mean, as I said, the balance sheet is there, and the skills are also there. If we can go faster, we will.
And once again, to ask a question over the phone, please press star one on your touchtone phone. We will pause a moment to allow any further questions to queue. And there are no further questions on the phone line at this time.
We have one.
We have a question on the webcast from Marios Pastou, Société Générale. Thank you. Please, could you provide details of rent growth and occupancy trends in the first two months of 2022?
Yes. Jean speaking. Hello, Mario. We see similar trends as what we're seeing in Q4 for the beginning of the year. Occupancy is relatively stable and similar trends in terms of rent growth. Okay.
Okay. We have also a question from the webcast from Andrew Gill, Jefferies. If your energy pricing hedge in the near future, are there further ways you can mitigate any increases aside from passing on higher rental increases to customers?
Okay. Hi, Andrew. This is Marc speaking. Actually, two questions. The first one regarding the energy, so no worries guys there. You know, we changed all our contracts as of January 2021 for three years, meaning the prices we have are blocked for 2021, 2022, 2023 full year for all the electricity, which is two-thirds of our consumption, and for natural gas, which is more or less a third. There is still a portion coming from central heating, especially in the Nordics, that you have to bear, you know. You cannot negotiate with the city hall. You just take the cut and that's it. Fortunately for us, this is only 0.3% of our revenue. It's a tenth of the total megawatt that we are consuming.
The impact of the potential increase on natural gas is extremely minor in our P&L for the coming two years. Same thing for electricity. The second part of your question is about the increases globally. Your question is inflation. How are you able to put through your top line in a way or to mitigate in a way the impact of increases on the cost base through inflation? Here, actually, Andrew, I think we are relatively comfortable with that. Why? We have demonstrated that we're able to increase our customers every year around 8%-10%. We have the capacity to do that quite simply.
Therefore, if inflation is really picking up in the cost base, we will be able to pass it through, and therefore, to the top line and not having an impact which is too major in the P&L.
Thanks, Marc. We have another question from Frédéric Renard, Kepler Cheuvreux. Could you elaborate on the NTA per share growth and what you expect for the coming year? For you, Jean.
Yes, Frédéric . The growth is coming mainly from rental rate increase. We have seen our rental rates going up as you saw, and that's driving the value. That's one of the elements, the most important one. The second element driving the value is the cap rate compression. We have seen also over the years the compression of the cap rate and continues to be the case. Indeed, those cap rate compression are also supported by acquisitions that have been happening in the sector in the last few months. We expect to continue to see similar trends going forward as our rates are continuing to grow.
I mean, we have a rating, price increase and pricing power to continue to push the rates up. We also expect continued compression of the cap rate based on transactions that are happening in the sector. Similar trends going forward. That's our expectation.
Thank you, Jean. Another question from Alberto Lobo, Bankhaus Lampe, on the acquisition side, how hot, yeah, is the market, and how do you see cap rate evolving?
Well, Alberto, sorry for that. The market is active, clearly. And again, here, whatever the countries, you have some stuff that could be potentially on the market or in certain discussions. Secondly, the pressure on the price is, yes, it's there, no doubt. You know, Jean just mentioned that the cap rates have been compressed in 2021. Obviously the sellers are looking at our valuation, at least for the ones who are publicly traded.
I'm sure that the brokers are doing their job well, which means that they're looking at these numbers from us and our peers and saying to their potential seller, "You know, guys, you should go for something of that time." Even if apples cannot be compared with bananas and of course, but that's the job of the brokers. In a nutshell, yes, the market is active. Secondly, yes, there is a pressure on the price.
We did have a question over the phone line. We can go to Andrea Catalano with PD C Securities . Please go ahead.
Yeah, my question was on yield compression, but I think it's been already addressed just now. Maybe perhaps just giving a bit of a more sense on the actual figures on the expected compression. Thank you.
We don't know what the expected compression is. I mean, the valuations are done by external parties, and we don't know what acquisitions will be going forward. Jean, maybe what we can, and I suppose, Andrea, that you know that, but if you compare different classes of assets among real estate in Europe, obviously, logistics, for example, if you look at the past five years and you compare self-storage, logistics, offices, retail, whatever, the trend on which we are is going down. That's true. Should it continue? Probably. By how much? We just don't know.
All right, thanks.
You're welcome.
There are no more questions on the phone lines at this time.
Yeah. We have a question from Nathan de Varjas, Berenberg. What percentage of your revaluation at least is coming from cap rate compression?
That's not something we have disclosed, but we can give you an idea that about 25 basis points increase in, you know, cap rate will have about 4% impact on our valuation.
Once again, that is star and one on your touchtone phone if you would like to ask a question. We will pause another moment to allow any further questions to queue.
Okay. Thank you. Thank you all for joining us today. We look forward to reconnecting in this venue soon.
Thank you, Caroline.
Thank you.
Have a good day. Bye-bye.
Have a good day. Bye-bye.
Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at this time.