Abacus Property Group will add the remaining 75 per cent interest of Storage King to its $1 billion-plus self storage portfolio.
The property group is unconditional on the remaining interest after picking up the first 25 per cent of the business in the 2019 financial year.
Storage King licences and manages more than 170 locations and Abacus’ self-storage portfolio now has a revenue per available square metre at pre-Covid levels, at $251 per square metre with average rent at $283 per square metre.
This transaction for the ASX-listed group adds to 10 additional self-storage properties expected to settle before the end of this year worth close to $100 million, in Melbourne, Sydney, Perth and Wollongong.
Abacus managing director Steven Sewell said these transactions align with the group’s strong asset-backed, annuity-style business model where capital is directed towards assets in key sectors that have potential for enhanced income growth and ultimately create value.
“The acquisition of the Storage King operating platform was identified as a key strategic imperative for Abacus, given our ownership of self-storage assets exceeds $1.2 billion and comprises 40 per cent of our balance sheet.
“A more integrated management business is critical to driving our self-storage business and enhancing associated asset returns,” Sewell said.
Current Storage King chief executive Michael Tate will join the Abacus executive leadership team and consideration of $50 million is being made for the balance of the business.
The appetite for alternative assets has been on the increase during Covid, including childcare, data centres and self storage.
Storage King’s Tate will join The Urban Developer Alternative Real Estate vSummit on Thursday, 12 November alongside Sam Kennard of Kennards Self Storage and Linda Sharkey from Cushman & Wakefield.
The Abacus trading conditions for its self-storage portfolio are moving, with a rebound in occupancy which is now at 89.7 per cent, and strengthened in all markets except Victoria.