Abacus spends to grow with $160m Storage King portfolio buy
Abacus Property Group has announced its third major asset acquisition in just over two months, paying $160 million for a portfolio of five Storage King sites in Sydney’s northern suburbs.
The deal follows its purchase of a one-third stake in Myer Bourke Street Mall in central Melbourne for $135.2 million last week and the $44 million acquisition of another four self-storage sites in May.
At that time it also paid $103.5 million for the 60 per cent of the Oasis Broadbeach Shopping Centre on the Gold Coast it did not already own, and revealed the divestment of $63 million of non-core assets.
So far this year Abacus has spent $440 million on property acquisitions after raising $402 million in late 2020.
Abacus now owns outright 101 Storage King facilities that are worth some $1.46 billion, in addition to 100 per cent of the Storage King brand and management business, which operates more than 160 sites across all mainland Australian states.
Managing director Stephen Sewell said the new sites in Chatswood, Artarmon, St Leonards, Dee Why and Pymble will be funded by debt and encompass more than 25,000 square metres of net lettable area.
“The assets are within tightly held catchments, benefiting from significant self-storage demand generated from above average household incomes, large proportions of renters and continually increasing density from apartment development,” Mr Sewell said.
It also “demonstrates the sustained acquisition pipeline generated from the Storage King platform,” he said.
“This transaction aligns with our strong asset-backed annuity style business model where capital is directed towards assets in key sectors that provide potential for enhanced income growth and ultimately create value.”
Analysts reacted positively to the latest deal, which is earnings accretive.
Macquarie Research has an “outperform” on the ASX-listed business and noted Abacus “is continuing to deploy [its] balance sheet, which will aid earnings growth. Increasing exposure to quality self-storage is also a positive in our view.
“However balance sheet capacity is reducing, while valuation looks challenging.” The Abacus share price remained steady following the announcement.
