At constant exchange rates, the Europe Same Store segment in the fourth quarter of 2004 generated increases in revenue of 7.7% and NOI before leasehold and indirect expenses of 2.0% over the fourth quarter of 2003. NOI after leasehold and indirect expenses in the quarter grew 0.5% from the same quarter in 2003. Strong revenue growth due to a combination of occupancy gains and rental rate growth was largely offset during the quarter by increased operating expenses, primarily related to special marketing efforts as management targets occupancy growth in the stores not yet at stabilized occupancy levels. At constant exchange rates, Europe Same Stores for the full year 2004 generated growth in revenue and NOI after leasehold and indirect expenses of 9.5% and 15.5%, respectively, over the previous year.
The average occupancy for the full year 2004 of the Europe Same Store pool (75%) is lower than the average occupancy of the Domestic Same Store portfolio during the same period (85%), in part because of the significantly younger average age of the stores in the European portfolio, with some stores in the Europe Same Store pool still in rent-up. The Company also believes its operating performance in Europe continues to be influenced by weaker economies in some of its European markets and by a temporary over-supply in certain markets from new developments by Shurgard and its competitors.
| Table 14: SHURGARD STORAGE CENTERS, INC. EUROPEAN YEAR TO DATE SAME STORE RESULTS European Same Store Results for year ended December 31, 2004, 2003 and 2002 (unaudited) As defined in 2004 (1) ——————————— Year ended December 31, ——————————— (in thousands except average rent) 2004 2003(5) % Change ———- ———- ——— Storage center operations revenue $ 73,241 $ 66,867 9.5% Operating expense: Personnel expenses 10,035 9,040 11.0% Real estate taxes 3,150 2,888 9.1% Repairs and maintenance 2,786 2,386 16.8% Marketing expense 4,972 4,297 15.7% Utilities and phone expenses 1,846 1,920 -3.9% Cost of Goods Sold 2,515 2,337 7.6% Store admin and other expenses 5,235 4,849 8.0% ———- ———- Direct operating and real estate tax expense 30,539 27,717 10.2% ———- ———- NOI 42,702 39,150 9.1% Leasehold expense 1,620 1,563 3.6% ———- ———- NOI after leasehold expense 41,082 37,587 9.3% Indirect operating expense (3) 8,781 9,610 -8.6% ———- ———- NOI after indirect operating and leasehold expense $ 32,301 $ 27,977 15.5% ========== ========== Avg. annual rent per sq. ft. (4) $ 21.52 $ 21.17 1.7% Avg. sq. ft. occupancy 75.0% 69.6% 7.8% Total net rentable sq. ft. 4,078,000 4,078,000 Number of properties 72 72 As defined in 2003 (2) ——————————— Year ended December 31, ——————————— (in thousands except average rent) 2003(5) 2002(5) % Change ———- ———- ——— Storage center operations revenue $ 44,523 $ 41,714 6.7% Operating expense: Personnel expenses 5,435 4,832 12.5% Real estate taxes 1,714 1,830 -6.3% Repairs and maintenance 1,447 1,287 12.4% Marketing expense 2,309 2,150 7.4% Utilities and phone expenses 1,084 996 8.8% Cost of Goods Sold 1,466 1,084 35.2% Store admin and other expenses 2,718 2,712 0.2% ———- ———- Direct operating and real estate tax expense 16,173 14,891 8.6% ———- ———- NOI 28,350 26,823 5.7% Leasehold expense 1,167 1,062 9.9% ———- ———- NOI after leasehold expense 27,183 25,761 5.5% Indirect operating expense (3) 5,328 5,480 -2.8% ———- ———- NOI after indirect operating and leasehold expense $ 21,855 $ 20,281 7.8% ========== ========== Avg. annual rent per sq. ft. (4) $ 19.28 $ 18.66 3.3% Avg. sq. ft. occupancy 75.5% 73.5% 2.7% Total net rentable sq. ft. 2,736,000 2,736,000 Number of properties 47 47 (1) Amounts have been translated from local currencies at a constant exchange rate using the average exchange rate for 2004 for the 2004 to 2003 comparison and at 2003 average exchange rates for the 2003 to 2002 comparison. (2) Amounts have been translated from local currencies at a constant exchange rate using the average exchange rate for 2003 for the 2003 to 2002 comparison. (3) Indirect operating expense includes certain shared property costs such as district and regional management, national contracts personnel and marketing, as well as certain overhead costs allocated to property operations such as business information technology, human resources and accounting. It does not include internal real estate acquisition cost or abandoned development expense. Indirect operating expense is allocated to storage centers based on number of months in operation during the period. (4) Average annual rent per square foot is calculated by dividing actual rent collected by the average number of square feet occupied during the period. (5) The 2003 results were not consolidated in our Consolidated Financial Statements. Table 15: SHURGARD STORAGE CENTERS, INC. EUROPEAN 2004 ANNUAL COMPARISON Annual comparison for European same store of 2004 versus 2003 and the annual comparison for European same store of 2003 versus 2002 (unaudited) Percent change of 2004 compared to 2003 —————————– 2004 Number of Average Properties Occupancy Revenue NOI Occupancy Rate —————————– —– ——— —– Belgium 15 77.1% 4.2% 5.4% 1.5% 1.8% Netherlands 15 69.6% 10.6% 9.8% 10.3% 1.2% France 16 82.3% 11.6% 14.3% 11.0% -0.2% Sweden 17 72.2% 10.9% 10.4% 9.3% 2.1% Denmark 2 73.7% 22.5% 37.9% 16.8% 2.4% United Kingdom 7 72.9% 7.1% -0.6% 4.7% 2.6% ———- ———- ——- —– ——— —– Europe Totals 72 75.0% 9.5% 9.1% 7.8% 1.7% ========== ========== ======= ===== ========= ===== Percent change of 2003 compared to 2002 —————————– 2003 Number of Average Properties Occupancy Revenue NOI Occupancy Rate —————————– —– ——— —– Belgium 14 77.3% 1.2% -4.0% -0.9% 4.5% Netherlands 6 75.4% 10.7% 12.9% 5.2% 4.7% France 11 78.5% 14.2% 21.8% 6.1% 6.5% Sweden 11 70.9% -0.8% -5.8% 1.4% -3.0% United Kingdom 5 74.7% 7.0% 11.7% 7.3% 0.2% ———- ———- ——- —– ——— —– Europe Totals 47 75.5% 6.7% 5.7% 2.7% 3.3% ========== ========== ======= ===== ========= ===== Table 16: SHURGARD STORAGE CENTERS, INC. DOMESTIC YEAR TO DATE SAME STORE VINTAGE TABLE Domestic Same Store Vintage Analysis for the year December 31, 2004, 2003 and 2002 (unaudited) (In Total Net millions) Rentable Total sq. ft. Storage when Average Occupancy Number of Center all phases —————– Properties Cost (1) are complete 2004 2003 2002 ———— ———- ———– —– —– —– Same Store since 2004 60 $222.6 4,449,000 78% 74% 63% Same Store since 2003 30 137.2 1,845,000 84% 79% 69% Same Store since 2002 or prior 321 1,242.6 20,750,000 86% 85% 85% ————- ———- ———– —– —– —– Same Store total 411 $1,602.4 27,044,000 85% 83% 81% ============= ========== =========== ===== ===== ===== (In thousands) Average Annual Rent (per sq. ft)(2) Revenue ———————– —————————– 2004 2003 2002 2004 2003 2002 ——- ——- ——- ——— ——— ——— Same Store since 2004 $8.15 $7.84 $7.20 $30,937 $27,534 $14,658 Same Store since 2003 13.18 12.58 12.50 22,048 20,287 17,881 Same Store since 2002 or prior 12.04 11.82 11.84 235,084 227,576 226,125 ——- ——- ——- ——— ——— ——— Same Store total $11.53 $11.30 $11.47 $288,069 $275,397 $258,664 ======= ======= ======= ========= ========= ========= (In thousands) NOI (after leaseholds expenses) —————————— 2004 2003 2002 ——— ——— ———- Same Store since 2004 $18,810 $15,800 $7,349 Same Store since 2003 11,596 10,593 8,301 Same Store since 2002 or prior 160,413 154,748 155,562 ——— ——— ———- Same Store total $190,819 $181,141 $171,212 ========= ========= ========== (1) Total capitalized costs to storage centers since the store was acquired or developed. (2) Average annual rent per square foot is calculated by dividing actual rent collected by the average number of square feet occupied during the period. Table 17: SHURGARD STORAGE CENTERS, INC. EUROPEAN DEVELOPMENT European Development Performance Vintage Analysis for the year ended December 31, 2004, 2003 and 2002 (unaudited) (in Total Net Average Occupancy millions) Rentable —————– Number Total sq. ft. For the year ended, of Storage when all December 31, Prop- Center phases are —————– erties Cost (1) complete 2004 2003 2002 ——— ——— ———- ——– —– —– Opened in 2004 Germany 4 $ 28.0 202,000 5.0% – – France 4 24.7 217,000 1.9% – – Denmark 2 15.4 101,000 10.2% – – United Kingdom 3 32.4 123,000 28.9% – – ——— —— ———- ——– —– —– Total opened in 2004 13 $100.5 643,000 9.3% – – ========= ====== ========== ======== ===== ===== Opened in 2003 Belgium 1 $ 3.8 46,000 51.8% 4.9% – Netherlands 7 42.2 351,000 30.3% 2.1% – Germany 5 38.2 268,000 25.8% 2.6% – France 7 46.9 371,000 25.1% 3.1% – Sweden 2 12.5 94,000 36.2% 7.8% – Denmark 1 8.4 50,000 53.1% 9.5% – United Kingdom 3 34.0 149,000 34.4% 4.2% – ——— —— ———- ——– —– —– Total opened in 2003 26 $186.0 1,329,000 30.4% 3.5% – ========= ====== ========== ======== ===== ===== Opened in 2002 Belgium 2 $ 7.8 101,000 46.8% 33.7% 11.7% Netherlands 7 44.0 368,000 49.1% 29.7% 5.1% France 7 46.9 376,000 59.5% 35.0% 10.2% Sweden 3 20.2 151,000 66.5% 40.8% 12.5% Denmark 2 15.7 106,000 60.6% 25.1% 2.1% United Kingdom 3 35.4 163,000 61.2% 27.2% 3.7% ——— —— ———- ——– —– —– Total opened in 2002 24 $170.0 1,265,000 56.6% 32.2% 7.6% ========= ====== ========== ======== ===== ===== New Store Total 63 $456.5 3,237,000 36.5% 14.0% 7.6% ========= ====== ========== ======== ===== ===== Same store: —————— Opened in 2001 Belgium 1 $ 4.0 51,000 65.7% 53.5% 25.8% Netherlands 9 51.7 484,000 64.1% 54.2% 32.3% France 5 35.9 280,000 80.2% 65.2% 40.5% Sweden 6 35.7 315,000 69.4% 55.6% 28.3% Denmark 2 14.4 110,000 73.7% 63.1% 42.0% United Kingdom 2 22.2 102,000 61.8% 56.2% 47.1% ——— —— ———- ——– —– —– Total opened in 2001 25 $163.9 1,342,000 69.4% 57.7% 34.7% ========= ====== ========== ======== ===== ===== Opened in 2000 and before Belgium 14 $ 72.4 855,000 77.8% 77.3% 78.1% Netherlands 6 37.5 345,000 77.2% 75.4% 71.7% France 11 63.2 585,000 83.4% 78.5% 74.0% Sweden 11 68.0 677,000 73.5% 70.9% 70.0% United Kingdom 5 47.6 274,000 77.0% 74.7% 69.6% ——— —— ———- ——– —– —– Total opened before 2001 47 $288.7 2,736,000 77.8% 75.5% 73.5% ========= ====== ========== ======== ===== ===== Same Store Total 72 $452.6 4,078,000 75.0% 69.6% 60.1% ========= ====== ========== ======== ===== ===== (In thousands) Average Annual Rent (per sq. ft) (2) (3) Revenue (2) ———————— ————————– For the year ended, For the year ended, December 31, December 31, ———————— ————————– 2004 2003 2002 2004 2003 2002 —— —— —— ——- ——- ——- Opened in 2004 Germany $17.00 $ – $ – $ 193 $ – $ – France 21.77 – – 106 – – Denmark 18.95 – – 250 – – United Kingdom 19.56 – – 753 – – —— —— —— ——- ——- ——- Total opened in 2004 $19.17 $ – $ – $ 1,302 $ – $ – ====== ====== ====== ======= ======= ======= Opened in 2003 Belgium $14.49 $ 9.43 $ – $ 369 $ 24 $ – Netherlands 19.93 14.97 – 2,266 125 – Germany 14.20 7.62 – 1,069 61 – France 22.24 20.58 – 2,430 287 – Sweden 17.41 13.05 – 717 119 – Denmark 21.98 20.23 – 670 119 – United Kingdom 40.05 36.06 – 2,317 279 – —— —— —— ——- ——- ——- Total opened in 2003 $21.64 $18.11 $ – $ 9,838 $ 1,014 $ – ====== ====== ====== ======= ======= ======= Opened in 2002 Belgium $12.28 $12.18 $11.48 $ 625 $ 454 $ 122 Netherlands 18.82 18.95 14.76 3,614 2,266 152 France 19.93 20.56 19.89 5,183 3,142 632 Sweden 20.05 18.07 17.13 2,277 1,319 255 Denmark 21.44 20.76 10.70 1,503 607 5 United Kingdom 40.32 42.88 34.91 4,526 2,226 109 —— —— —— ——- ——- ——- Total opened in 2002 $22.14 $21.49 $17.85 $17,728 $10,014 $ 1,275 ====== ====== ====== ======= ======= ======= New Store Total $21.82 $21.15 $17.85 $28,868 $11,028 $ 1,275 ====== ====== ====== ======= ======= ======= Same store: —————— Opened in 2001 Belgium $15.42 $14.77 $14.02 $ 573 $ 449 $ 209 Netherlands 17.94 17.97 17.45 5,906 5,061 3,032 France 22.05 21.84 21.30 5,554 4,449 2,867 Sweden 18.24 17.50 17.77 4,612 3,602 1,875 Denmark 21.23 20.73 20.33 1,888 1,542 998 United Kingdom 41.01 41.85 37.87 2,876 2,706 2,082 —— —— —— ——- ——- ——- Total opened in 2001 $20.76 $20.68 $20.75 $21,409 $17,809 $11,063 ====== ====== ====== ======= ======= ======= Opened in 2000 and before Belgium $15.87 $15.61 $14.91 $11,684 $11,317 $10,949 Netherlands 22.26 21.45 20.47 6,383 6,052 5,457 France 26.29 26.25 24.66 14,271 13,323 11,702 Sweden 20.80 20.37 20.92 11,821 11,222 11,143 United Kingdom 32.40 31.18 31.13 7,673 7,144 6,687 —— —— —— ——- ——- ——- Total opened before 2001 $21.85 $21.36 $20.64 $51,832 $49,058 $45,938 ====== ====== ====== ======= ======= ======= Same Store Total $21.52 $21.17 $20.68 $73,241 $66,867 $57,001 ====== ====== ====== ======= ======= ======= (In thousands) NOI (2) (4) (after leasehold expenses) ——————————– For the year ended, December 31, ——————————– 2004 2003 2002 ——- ——- ——– Opened in 2004 Germany $ (887) $ – $ – France (625) (2) – Denmark (259) – – United Kingdom 84 – – ——- ——- ——– Total opened in 2004 $(1,687) $ (2) $ – ======= ======= ======== Opened in 2003 Belgium $ 110 $ (93) $ – Netherlands (357) (829) – Germany (915) (941) – France (783) (790) – Sweden (92) (314) – Denmark 232 (222) – United Kingdom 456 (204) – ——- ——- ——– Total opened in 2003 $(1,349) $(3,393) $ – ======= ======= ======== Opened in 2002 Belgium $ 89 $ (145) $ (255) Netherlands 1,253 51 (580) France 1,658 (5) (791) Sweden 1,008 186 (413) Denmark 560 (191) (254) United Kingdom 2,274 361 (274) ——- ——- ——– Total opened in 2002 $ 6,842 $ 257 $ (2,567) ======= ======= ======== New Store Total $ 3,806 $(3,138 ) $ (2,567) ======= ======= ======== Same store: —————— Opened in 2001 Belgium $ 317 $ 143 $ (57) Netherlands 2,532 1,907 (4) France 3,073 2,010 809 Sweden 2,133 1,399 (223) Denmark 873 633 107 United Kingdom 1,633 1,557 1,035 ——- ——- ——– Total opened in 2001 $10,561 $ 7,649 $ 1,667 ======= ======= ======== Opened in 2000 and before Belgium $ 7,549 $ 7,322 $ 7,630 Netherlands 3,983 4,020 3,561 France 7,993 7,596 6,248 Sweden 6,475 6,366 6,748 United Kingdom 4,521 4,634 4,153 ——- ——- ——– Total opened before 2001 $30,521 $29,938 $ 28,340 ======= ======= ======== Same Store Total $41,082 $37,587 $ 30,007 ======= ======= ======== (1) The actual completed cost of these projects are reported in U.S. dollars translated at the December 31, 2004 exchange rate of $1.36 to the euro. Operating results (see note (2) below) are reported at the average exchange rate for the year 2004 which was $1.24 to the euro. As these exchange rates are different we believe it does not allow for an accurate measure of property investment yield. We believe the application of a constant exchange rate to both the property cost and operating results would provide a more meaningful measure of investment yield. The cost of the storage centers excludes the excess cost of approximately $247 million we paid for part of our ownership interest acquisition in Shurgard Europe in 2003. (2) The amounts have been translated from local currencies at a constant exchange rate using the average exchange rate for 2004. (3) Average annual rent per square foot is calculated by dividing actual rent collected by the average number of square feet occupied during the period. On the year of opening the average annual rent is lower as the store had not been opened a full year. (4) Expenses in some instances may include certain pre- opening costs Table 19: SHURGARD STORAGE CENTERS, INC. STORE ASSET VALUES AND OPERATING INFORMATION For the three months ended December 31, 2004 (Unaudited) Weighted average (in thousands Net except for No. of ownership Rentable Occupancy Gross Book number of Square properties) Properties interest Feet (Q4 Avg) Value (7) ———- ——— ——— ——— ———– Same Store —————- Domestic wholly owned or leased (1) 328 100% 21,105 85% $1,264,519 Domestic consolidated joint ventures (2) 83 79% 5,939 83% 337,863 European consolidated subsidiary (4) 72 87% 4,078 77% 618,821 ———- ——— ——— ——— ———- Total Same Store 483 94% 31,122 84% $2,221,203 ========== ========= ========= ========= ========== New Store —————- Domestic wholly owned or leased developments (1) 22 100% 1,283 67% $ 119,395 Domestic consolidated joint ventures developments (2) 12 73% 728 61% 53,467 Domestic acquisitions (3) 27 96% 1,950 80% 153,784 European consolidated subsidiary developments (4) 30 87% 1,550 60% 296,200 European 20% development ventures developments (5) 32 17% 1,649 30% 225,466 European acquisition (3) 1 100% 38 88% 15,713 Domestic Properties under leasing arrangements (6) 3 0% 211 61% 22,481 ———- ——— ——— ——— ———- Total New Store 127 71% 7,409 60% $ 886,506 ========== ========= ========= ========= ========== TOTALS 610 89% 38,531 79% $3,107,709 ========== ========= ========= ========= ========== (in thousands Fair except for Applicable Q4 Q4 Leasehold value number of properties) debt ( 8 ) Revenue NOI (9) Expense of debt ———- ——— ——– ——— ——— Same Store —————- Domestic wholly owned or leased (1) $ 50,793 $ 59,399 $40,441 $1,116 $ 51,022 Domestic consolidated joint ventures (2) 154,046 13,335 9,066 25 161,184 European consolidated subsidiary (4) 313,797 19,691 11,783 426 313,797 ——– ——– ——- —— ——– Total Same Store $518,636 $ 92,425 $61,290 $1,567 $526,003 ======== ======== ======= ====== ======== New Store —————- Domestic wholly owned or leased developments (1) $ – $ 2,847 $ 1,175 $ 120 $ – Domestic consolidated joint ventures developments (2) 3,807 1,498 668 – 3,837 Domestic acquisitions (3) 36,095 4,517 2,798 – 36,232 European consolidated subsidiary developments (4) 140,614 6,175 2,650 69 140,614 European 20% development ventures developments (5) 137,764 2,920 (691) 61 137,764 European acquisition (3) – 430 247 – – Domestic Properties under leasing arrangements (6) – 584 297 – – ——– ——– ——- —— ——– Total New Store $318,280 $ 18,971 $ 7,144 $ 250 $318,447 ======== ======== ======= ====== ======== TOTALS $836,916 $111,396 $68,434 $1,817 $844,450 ======== ======== ======= ====== ======== 1 Includes owned and leased properties in which we have a 100% interest. 2 Includes properties in which we own an interest less than 100% but that are consolidated in our financial statements. The store information and results reflected the full 100% amounts. Our pro-rata share in the same store pool is approximately 79% and our pro-rata share in the new store pool is represents approximately 73%. 3 Includes all stores acquired in 2004 and 2003. 4 Includes properties developed under Shurgard Europe in which we hold an 87.23% interest. 5 Includes properties developed under First and Second Shurgard in which we hold a 17.4% interest. 6 Three storage centers are operated through a leasing arrangement with a California developer for which the storage centers assets are consolidated in our financial statements but not the store operations. 7 Gross Book Value represents the cost of developing properties at the time they were developed, not the value at which partners interests in the properties may have been acquired for at a later date. The actual completed cost of these projects are reported in U.S. dollars translated at the December 31, 2004 exchange rate of $1.36 to the Euro. Operating results are reported at the average exchange rate for the year ended December 31, 2004 which was $1.24 to the Euro. As these exchange rates are different we believe it does not allow for an accurate measure of property investment yield. However, we believe the application of a constant exchange rate to both the property cost and operating results may provide a more meaningful measure of investment yield. 8 Applicable debt represents debt secured against each asset pool. Represents Net Operating Income after Direct Expenses. The indirect expenses not included in NOI for Domestic 9 Same Store, European Same store, Domestic New Store and Europe Store are the following (in thousands except indirect expense per revenue dollar): Indirect expense Q4 indirect per revenue expense Q4 revenue dollar —————- —————– ————— Domestic Europe Domestic Europe Domestic Europe ——– ——- ——– ——– ——– —— Same Store $4,702 $2,483 $72,734 $13,335 $0.06 $0.19 —— —— ——- ——- —– —– New Store $ 646 $2,798 $ 9,446 $ 9,525 $0.07 $0.29 —— —— ——- ——- —– —– SOURCE: Shurgard Storage Centers, Inc. Shurgard Storage Centers, Inc. Dev Ghose or Stuart Blackie, 206-624-8100 or Broadgate Consultants, Inc. Alan Oshiki, 212-232-2222 (Media Contact) Copyright Business Wire 2005 News Provided by COMTEX |