Carpentry and Woodworking - Enclosure or closet for water heater

I have a small electric water heater (3 1/2 ft tall) in a new addition. It is an eye sore. I want to cover it with some sort or enclosure or closet.

Please help. What should I do? Thank you.

I have the same thing in my rental cabin. Only it is conveniently at the end of a hallway leading to the bathroom. All I did was place ledgers and nailers around the perimeter and sparsely screwed in paneled plywood. The paneling is what is in the cabin already, so it matches the walls surrounding it.
Primarily it must remain accessible for maintenance and removal, so don't go build a big box that may block your ability to remove it.

And just for fun, install it in a drain pan. If it leaks, no one will know until the floor falls out, at least the pan will save the floor. But check local code, if any.

Sort of like wetting your pants in a dark suit. Takes a while to notice.