Abacus locks up $200 million in funding for self storage portfolio expansion

Abacus locks up $200 million in funding for self storage portfolio expansion

Australian property group Abacus (ASX: ABP) has today completed a $200 million institutional placement, with the company bullish on the future of self storage facilities as it announces plans to expand in the space.

The raise saw Abacus issue 59.2 million new securities at an offer price of $3.38 per share, representing a 5.1 per cent discount to the last closing price on Thursday afternoon.

“We are very pleased with the support received for the Placement. We thank our existing securityholders for their ongoing support and welcome a number of new institutions to the Abacus register which is expected to increase free float market capitalisation and improve Abacus’ index ranking and liquidity,” Abacus managing director Steven Sewell said.

Abacus hopes to secure an extra $15 million via a share purchase plan, taking its war chest to $215 million as it seeks to expand in the self storage arena.

The company already owns a variety of different brands in the space, including Storage King which it took over fully in 2020 for $50 million.

In total, Abacus says it has spent $1.8 billion on self storage facilities since FY17, and in calendar 2021 its portfolio delivered 9.3 per cent average rent growth.

The company says the segment’s income growth in the latest half was supported by macro tailwinds, and as such it has identified an expansion pipeline of $266 million that is expected to boost portfolio quality and future income.

The pipeline includes 90,000 sqm of net lettable area across 13 stores, and the expansion of 21 stores in high-demand markets to add an additional 35,000 sqm of additional area.

“Acquisition opportunities have the potential to further improve portfolio diversification, including outstanding Self Storage acquisition momentum with a robust pipeline of opportunities,” Abacus said.

“Abacus also has a strong record of acquiring high quality, value accretive CBD Commercial assets.”

It marks the continuation of a strategy the company has been quite bullish on in recent years, and comes after the company spent $483 million on 28 self storage stores and development sites in the six months to 31 December 2021 alone.

In its last update, Abacus says its self storage portfolio is valued at $2.5 billion, and includes 121 stores.

This puts it on the heels of industry leader National Storage (ASX: NSR), which has total assets worth $3.44 billion, from which it generated $117.8 million in revenue as of 1H22.

Not to be outdone, Abacus has a 9.9 per cent stake in NSR, which at today’s market price is worth around $303 million.

Shares in Abacus are down 5.62 per cent to $3.36 per share at 10.37am AEDT.

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