Safestore Holdings (LSE:SAFE) PLC has been downgraded by Deutsche Bank to ‘hold’ from ‘buy’, with the broker cutting its price target to 700p from 880p as it reassessed the outlook for the self-storage sector.
Deutsche Bank pointed to tougher trading conditions and a weaker near-term operating backdrop, reducing its expectations for Safestore as demand and pricing conditions remain under pressure.
The downgrade comes after Safestore reported first-half revenue of £120.6 million in June, up 6.9% year on year, supported by new-store openings and like-for-like growth across its portfolio. Adjusted diluted EPRA earnings per share rose 2.1%, while adjusted EBITDA reached £67.9 million.
However, the broader sector backdrop has become more challenging, with investors increasingly focused on occupancy, rental-rate growth and the pace at which recently opened stores can mature.
Safestore has continued expanding across the UK and continental Europe, with its development pipeline concentrated in supply-constrained markets including London and Paris.
The reduced Deutsche Bank target still sits above recent trading levels, but the move to a neutral recommendation signals a more cautious view on the timing and strength of Safestore’s earnings recovery.
The revised stance also highlights the importance of execution as Safestore works to fill new capacity.