Abacus Property Group (ASX: ABP) refuses to let the dust settle in Australia's storage market, snapping up the remaining 75 per cent of Storage King for total control of the self-storage operating platform.
Abacus will use existing debt facilities to fund the $50 million deal which is expected to be completed by late-November.
The purchase builds on the Sydney-based investment group's appetite for self-storage facilities, including a minority holding at National Storage REIT (ASX: NSR).
Abacus managing director Steven Sewell emphasised the importance of the Storage King brand to his company with Abacus' value of self-storage assets exceeding $1.2 billion and comprising 40 per cent of its balance sheet.
The company first invested in the market in 2005.
As at June 30, Storage King managed more than 170 locations with more than 50,000 customers and a total of 380 full and part time team members.
"A more integrated management business is critical to driving our Self Storage business and enhancing associated asset returns," Sewell said.
"As part of this transaction, current Storage King CEO Michael Tate will join the Abacus executive leadership team, and in his unchanged role will continue to drive and grow the Storage King business, with the benefit of the asset backing and management support of Abacus."
As part of the announcement of the Storage King deal, Abacus also announced it had shelled out $45.1 million for another four self-storage properties in Melbourne, Wollongong and Sydney.
The Stephen Sewell-led group also revealed it had settled on a further six properties in Perth, Sydney and Melbourne for a total of $45.2 million.
It comes almost six months after Abacus planted a 7 per cent stake in competitor National Storage REIT.
That move followed a hotly contested, but ultimately unsuccessful, three-way battle to wrest control of the Brisbane-based National Storage.
Earlier this year National Storage revealed that New York-based private equity firm Warburg Pincus, US-based Public Storage and Hong Kong's Gaw Capital Partners (GCP) were interested in purchasing the company.
However, all three bidders declined to proceed.
Following declines during the pandemic, Abacus said occupancy levels at its properties had increased to 89.7 per cent at 30 September.
Business News Australia
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