The equipment rental & leasing industry comprises businesses that provide their equipment for a definite period to customers in exchange for fees. While the terms rental and leasing are often used interchangeably, leasing contracts tend to have longer durations and predefined renewals or ownership transfer conditions at expiration. We segmented the European market based on types of equipment offered: (i) industrial equipment, (ii) automotive, (iii) electronics and (iv) media & entertainment.

The European rental & leasing markets vary in terms of fragmentation. The automotive market is characterised by the strong consolidation in the short-term car rental segment and the increasing presence of car manufacturers in the longer-term leasing segment. On the contrary, the industrial segment remains moderately fragmented due to highly specific customer requirements influenced by location and project type, among other factors. A handful of European consolidators are well-positioned to aggregate such demand, benefiting from associated economies of scale.

Sponsor-led interest has been moderate with ~30% of identified assets backed by financial sponsors (April 2023). In particular, the electronics and media & entertainment segments demonstrate the highest penetration of institutional capital. Respectively, the investors are attracted by the (i) organic growth on the back of consumers shifting from ownership to flexible renting or leasing solutions and (ii) long-term demand visibility from a niche customer base.

Relevant ESG topics primarily revolve around environmental issues. Leasing is regarded as an inherently sustainable business model, reducing carbon footprint thanks to higher utilisation rates and extended useful life of equipment. Additionally, the players can further strengthen the green transition by focusing on responsible recycling and disposal and increasing share of green equipment offered in their fleets.