With the booming demand for self-storage space in the UK, could Safestore Holdings (LSE:SAFE) be one of the best stocks to buy now for my portfolio?
FTSE 250 pick
Safestore is the UK’s largest provider of self-storage. It is also the second largest provider in Europe. It has 125 locations throughout the UK and 47 in London alone. In total it has 176 stores across five countries.
The self-storage market is on a growth trajectory and Safestore is in a position to reap the rewards of this in my opinion. As I write, Safestore’s shares are trading for 1,107p per share. A year ago shares were trading for 786p per share, which means its share price has increased by 40% in 12 months. All my potential best stocks to buy now are on an upward trajectory.
Trading update and performance
On Tuesday, Safestore released its Q3 trading update. It made for excellent reading as strong trading continued and full-year guidance was upgraded. Safestore reported that in Q3 2021, revenue and storage revenue was up compared to the same period last year. In all its markets, the UK, France, and Spain, total revenue increased. Occupancy rates were also up.
In addition to the positive financials of Safestore’s update, it also confirmed growth and expansion plans. It is moving forward with new locations in all its key markets. This included expanding and converting existing locations to enhance its offering as well as new build locations. I am particularly buoyed when firms I am looking to invest in have clear growth plans.
Safestore has a good historic track record of performance. I understand that past performance is by no means a guarantee of the future but I personally look at it as a gauge when looking at a firm’s investment viability. I do this for all the picks I believe could be the best stocks to buy now.
Safestore’s total revenue, gross profit, and total equity have been increasing year-on-year for the past four years. This includes 2020, which was a difficult period for all firms due to the pandemic.
The best stocks to buy now have risks too
The rise in demand for storage space is directly linked to the economy. A strong housing market and people needing extra space is one reason. In addition to this, businesses requiring space to store stock as e-commerce explodes and stores implement distancing measures have also helped. If the economy and its recovery were to falter, Safestore could be affected financially.
Overall, I believe Safestore could be a good addition to my portfolio. It has a good track record and is well positioned to benefit from the increased demand in storage space. With its international reach and growth plans, I think it is one of the best stocks to buy now for my portfolio.