Market

According to the Company's management, the self-storage industry is primarily driven by significant life events that lead individuals to seek additional space. These events include for example moving, home renovations, entering into a relationship or marriage, divorce or separation, hobbies that require large number of pieces of equipment, inheritance, starting a family and changes in business operations.

According to the Company's management, demand for self-storage services is fuelled by megatrends that drive structural growth, including ongoing urbanisation, abundance of goods, shrinking apartment sizes, increasing demand for space, and aging population.

Pitäjänmäki, Helsinki

Growth drivers

According to Cityvarasto’s management, in the coming years market demand will be driven in particular by urbanization, demographic changes, and housing constraints.

1. Urbanisation and changing demographics

One main driver of the self-storage industry's transformation in Finland is urbanisation, which is particularly strong in the Helsinki Metropolitan Area. The region's population is projected to increase by approximately 130,000 people by 2040 (Source: Statistics Finland), leading to increased housing demand and affecting the housing prices. According to the Company's management, as apartments become smaller and storage options within residential buildings diminish (Source: Statistics Finland), popularity of external self-storage solutions is expected to increase. The estimated population growth of Helsinki, Tampere and Turku exceeds that of many major European cities.

In addition to the growing and densifying population in major Finnish cities, the average household size across Finland is
expected to decrease from the current 1.97 persons per household to 1.89 in 2045. This would translate to approximately 370,000 new households in 2045 (Source: Housing production need 2025–2045 report by VTT and Statistics Finland). According to the Company's management, smaller household sizes may positively drive moving volumes further supporting the demand of Cityvarasto's services.

An ageing population is expected to result in changing demographics. The number of over 65-year-olds is expected to increase approximately by 200,000 by 2040, an increase of approximately 15 per cent from 2024. Similarly, the number of people aged between 40 and 65 is expected to increase by approximately 300,000 (Source: Statistics Finland, Population projection 2024). The increase in middle aged and older people combined with smaller apartments is plausibly one driver for increased demand for self-storage as they require additional storage to store the belongings that have been accumulated throughout their lives.

2. Housing constraints

The average size of apartments has decreased since 1996, measured by issued building permits. The size of newly built apartments by construction year cohort reflects a similar trend, showing that the average apartment size in Helsinki, Espoo and Vantaa has shrunk by 9 per cent,13 per cent and 10 per cent, respectively, measured for apartments built between 2015–2019 compared to 2020–2024 (Source: Statistics Finland, Population projection 2024). With smaller apartments, there is less space for people to store their belongings, which, according to the Company's management, could increase the need for storage space.

Housing prices have risen since 2010, however, the appreciation of houses has been split unevenly between growth centers and the rest of Finland. As shown below, housing prices increased by three per cent in Finland as a whole, but in Helsinki, Turku and Tampere they grew by 22 per cent. Similarly, rent levels in Finland have grown consistently over the past 15 years. During the same time period, the rent increases in Helsinki, Turku and Tampere have been proportional to those in Finland as a whole. In Helsinki, Tampere, and Turku, the average rent has increased by EUR 3.9 per square metre and in Finland overall, the average rent has increased by EUR 3.5 per square metre since 2015 (Source: Statistics Finland).

Barriers to entry

In Cityvarasto's view, the self-storage market is characterised by several meaningful barriers to entry that protect established operators and hinder new operators' entering the market. Larger operators, such as Cityvarasto, benefit from economies of scale, enabling investments in automation, logistics, and digital platforms that improve operational efficiency and customer experience. The ability to offer a consistent, high-quality service across locations further strengthens customer loyalty. Achieving a strong market presence with an extensive service platform and brand awareness in the self-storage market is essential as people store their belongings in the self-storage companies' premises.

Furthermore, according to the Company's management, the sector requires deep local market knowledge, particularly regarding the sourcing, evaluation, and conversion of suitable properties, which can be difficult and time-consuming for new market operators to acquire. Urban zoning constraints present additional challenges, as municipalities tend to favor mixed-use developments over self-storage when allocating land, creating a structural supply-demand imbalance. This is especially acute in densely populated areas where demand is strongest, yet land availability is limited. New-build operators also face uncertainties tied to urban development, such as zoning approvals and delayed consumer uptake, further raising the threshold for market entry. Cityvarasto has addressed this imbalance by strategically converting underutilised properties into self-storage facilities. According to the Company's management, the Company’s conversion model enables the Company to enter mature locations in line with its property acquisition strategy.