Company Reports

Abacus agreed to sell its 20% interest in Storage King for AUD 285 million via two block trades: 9% to an undisclosed party at AUD 1.00 per Storage King security, and the rest to Ki Corporation at AUD 1.20 per security. On average, the sale price is AUD 1.11.

Abacus Group owns and manages a property portfolio of mostly offices and two retail assets. The group also has exposure to the self-storage sector through Storage King, a REIT that was destapled from Abacus Group in 2023. Since the destapling and up until June 2026, Abacus was the manager of the self-storage REIT. Following an internalization agreement, Storage King moved management in-house from fiscal 2027. In September 2026, Abacus agreed to sell its 20% interest in Storage King for AUD 285 million (though a portion of the trade is subject to securityholder approval at Abacus' annual general meeting in November 2026).

Abacus' fiscal 2026 funds from operations were AUD 9.1 cents per security, down 2% year on year. Distributions were flat at AUD 8.5 cents per security. Management expects a 21% drop in distributions next year, to AUD 6.7 cents per security.

Abacus Group owns and manages a property portfolio of mostly offices and two retail assets. The group also has exposure to the self-storage sector through Storage King, a REIT that was destapled from Abacus Group in 2023. Since the destapling and up until June 2026, Abacus was the manager of the self-storage REIT. Following an internalization agreement, Storage King moved management in-house from fiscal 2027. While Abacus still holds a 20% interest in Storage King, we expect it to sell down the stake over time, depending on the self-storage REIT's security price.

Storage King is to part ways with its external manager Abacus Group from June 30, 2026. The self-storage operator will pay AUD 19 million to Abacus to internalize its management.

Abacus Group owns and manages an office-centric property portfolio, with a small number of retail assets. The group also has exposure to the self-storage sector through Storage King, a REIT that was de-stapled from Abacus Group in 2023. Following the de-staple, Abacus has been the manager of the self-storage REIT and retains a 20% stake. Through this structure, Abacus shares a portion of Storage King’s profits and is also remunerated as its external manager.

Abacus' first-half funds from operations were broadly flat year on year at AUD 4.5 cents per security. Fiscal 2026 guidance is unchanged, and management anticipates no growth in distributions, guiding to AUD 8.5 cps, which is 85% to 95% of FFO.

Abacus Group owns and manages an office-centric property portfolio, with a small portion of retail assets. The group also has exposure to the self-storage sector through Abacus Storage King, a REIT that was de-stapled from Abacus Group in 2023. Post de-staple, Abacus is the manager of the self-storage REIT and remains invested in it with a 20% stake. Through this structure, Abacus shares a portion of Storage King’s profits and is also remunerated as its external manager.

Abacus Group owns and manages an office-centric property portfolio, with a small portion of retail assets. The group also has exposure to the self-storage sector through Abacus Storage King, a REIT that was de-stapled from Abacus Group in 2023. Post de-staple, Abacus is the manager of the self-storage REIT and remains invested in it with a 20% stake. Through this structure, Abacus shares a portion of Storage King’s profits and is also remunerated as its external manager.

We initiate coverage on Abacus Group, which owns and manages a portfolio of office and retail properties. Abacus also manages, and has a 20% equity interest in, Abacus Storage King, a self-storage REIT de-stapled from the group in 2023.

As foreshadowed in our research report published on June 24, 2024, we cease coverage on Abacus Group. We provide analyst research and ratings on more than 1,600 companies globally and periodically adjust our coverage according to client demand, investor interest, and staffing.

We will discontinue analyst coverage of Abacus Group on or about July 15, 2024. Accordingly, we place Abacus Group under review. We provide analyst research and ratings on over 1,600 companies globally and periodically adjust our coverage according to investor interest and staffing.

Abacus Group’ primary assets were historically an office portfolio of mostly secondary assets, and one of Australia’s top three portfolios of self-storage assets. The REIT split into two listed entities in mid-2023, with Abacus Storage King focused on storage, and this vehicle, Abacus Group, focused on commercial property.

On its own, Abacus’ fall in occupancy to 92.6% in the December 2023 half, down from 95.0% six months earlier, is concerning given a marketwide oversupply of offices. But rent increases support our confidence in the outlook for no-moat Abacus.

Abacus Group’ primary assets were historically an office portfolio of mostly secondary assets, and one of Australia’s top three portfolios of self-storage assets. The REIT split into two listed entities in mid-2023, with Abacus Storage King focused on storage, and this vehicle, Abacus Group, focused on commercial property.

The federal government’s migration review was released on Dec. 11 and it suggests high population growth remains the status quo. The review tinkers with various visa rules, but contains no major reduction in migrant numbers, suggesting high migration will persist, relative to precoronavirus levels and versus other developed countries.

Abacus Group’ primary assets were historically an office portfolio of mostly secondary assets, and one of Australia’s top three portfolios of self-storage assets. The REIT split into two listed entities in mid-2023, with Abacus Storage King focused on storage, and this vehicle, Abacus Group, focused on commercial property.

Abacus’ primary assets were historically an office portfolio of mostly secondary assets, and one of Australia’s top three portfolios of self-storage assets. The REIT split into two listed entities in mid-2023, with Abacus Storage King focused on storage, and this vehicle, Abacus Group, focused on commercial property.

We reduce our fair value estimate for no-moat Abacus Group by 8% to AUD 1.75. We’ve taken a fresh look, with the separation of its storage assets and operating platform into a separate entity, Abacus Storage King. Abacus Group retains a 20% stake in the storage entity and is remunerated as its manager, but the former's primary interest is now commercial property. Two thirds of the commercial portfolio are from 15 offices, the other third is retail and other properties.

We place our fair value estimate for Abacus Group under review following its fiscal 2023 result. We plan to perform a more detailed assessment of the group now that it has completed the separation of Abacus Storage King into a listed REIT. Abacus Group delivered funds from operations of AUD 19.8 cents per security. Distributions for the fiscal year totalled AUD 18.4 cps, up 2.2%. The REIT faces some short-term headwinds, but long-term fundamentals look reasonable.