ABG - Abacus Group

[Bushman]

Looks like some of the smaller A-REITs are starting to be refinanced. ABP has just announced a placement to the Kirsch Group at 25 cents per share (nice for those who bought in today's closing price of $0.205 cents). They will also have a rights issue at 25 cents per share fully underwritten by the Kirsch Group.

Post placement/rights issue (raising $211.4m), the listed trusts gearing will be 22.3% and NTA at $0.69.

Some good news in the little A-REITs all being priced to fail. Cashed up privates are starting to see value and, in property terms, they are always the one buying at the bottom and selling at the top.

Interesting.

PS: Kirsch Group seems to investment vehicle for Nathan Kirsh, a South African investor who seems to have founded a NASDAQ listed IT company.

 

[roland]

Slow and steady wins the race!

I rolled over my dividends and now seeing a decent % profit.

I decided not to go for the share purchase offer, and I am sure that this helped keep a cap on the SP. Now that we are done with the new share issues I am hoping we will continue with the upward trend.

 

[nulla nulla]

Abacus doesn't seem to draw a lot of attention to itself in this forum, though there would be several people in the forum that have it on their watch list if not in their investment portfolio.



An increasing share price on relatively small volumes ran into a significant speed hump on weekending Friday 19/9/2014. Down 10% for the week, with over a quarter of the weekly fall occurring in the closing auction on Friday, Abacus would now be looking like a potential buy for the dividend/yield chasers. Mind you Charlie Aitken of Bell Potter in todays Sydney Morning Herald suggest A-REIT's have a further 10% downside potential? As always do your own research and good luck.

 

[financialreports]

The recent purchase of 710 Collins street could be counterproductive for long term shareholders. In my view, ABP needs to become more serious about reducing it's debt, even if it means forgoing acquisitions for some time.

 

[financialreports]

Although it doesn't appear the market agrees with my sentiment. The trading day following the Collins Street acquisition was marked by larger volumes and a price increase of 3%.

 

[nulla nulla]

Looks like the market liked the the opportunity back in September to climb on board, pushing the share price from the $2.49 low to $3.10 on xmas eve. 25% in 3 months?



Where to now?

 

[financialreports]

It has been an impressive ascent, but there might be some profit taking at the 3.00 level.

 

[divs4ever]

Abacus announces equity raising to replenish investment capacity
Abacus Property Group (ASX:ABP) (Abacus) today announces it is undertaking:
– a fully underwritten $200 million institutional placement (Placement); and
– a non-underwritten security purchase plan (SPP or Security Purchase Plan) to eligible
securityholders in Australia and New Zealand to raise up to $15 million1
to replenish investment capacity for continued deployment into acquisitions yet to settle and into the
identified development and expansion pipeline in its Self Storage portfolio (together, the Equity Raising).
Strategic Rationale
Abacus has accelerated growth initiatives and its transformation into an asset backed, annuity style
investment house with a strategic focus in the key sectors of Self Storage and Commercial real estate, as
evidenced in the recently released HY22 results.
– Material portfolio transformation achieved with approximately $3.2 billion2,3 deployed since FY17
including over $1.8 billion into Self Storage
– In calendar 2021 Abacus’ established Self Storage portfolio4 delivered 9.3% average rent growth.
These strong growth trends have continued into 3Q22. In addition the pace of lease up at newly
developed and stabilising centres in 3Q22 is above budgeted levels
– Over $1 billion3 deployed into key sectors during FY22 to date, alongside resolution of legacy
residential loan positions
– HY22 result delivered FFO per security growth of 8.2% on 1H21 and 4.9% on 2H21
The Placement positions Abacus to continue its strong momentum upgrading portfolio quality via
development, expansions, and acquisitions.
– Strong Self Storage income growth in HY22 has been strongly supported by macro tailwinds, with
established portfolio4 RevPAM growth of 11.7%
1 Abacus may (at its absolute discretion) decide to scale-back applications under the SPP.
2 Includes equity accounted investments and other assets.
3 Includes $401 million of acquisition: 77 Castlereagh Street, Sydney NSW, 56 Prescot Parade, Milperra NSW (Riverlands), 181 James
Ruse Drive, Camellia NSW (Camellia) and $53 million of Self Storage sites excluding transaction costs (post balance date
transactions).
4 Established portfolio: 63 mature stores open at 1 July 2020.
2
– Abacus has an identified development and expansion pipeline of $266 million (cost to complete) that
is expected to boost portfolio quality and future income. Development projects are expected to
deliver c.90,000 sqm of NLA across 13
5 stores, and the expansion of 21 stores in high-demand
markets will provide c.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 also
has a strong record of acquiring high quality, value accretive CBD Commercial assets
– Following settlement of post balance date transactions and the Placement, Abacus will have >$320
million6 of capacity to fund its acquisition and development pipeline and to take advantage of further
acquisition opportunities
– The material increase in free float market capitalisation from the Placement is expected to improve
Abacus’ index rankings and liquidity. The Placement structure facilitates introduction of new
institutional securityholders to Abacus’ register
Placement
The offer price per new stapled security has been set at $3.38 (Issue Price), which represents a:
– 5.1% discount to last closing price of $3.56 per Abacus stapled security on 17 March 2022
– 3.7% discount to the 5-day VWAP of $3.51 per Abacus stapled security on 17 March 2022
– 5.3% FY22 DPS yield7
The Placement is fully underwritten by Barrenjoey Markets Pty Ltd and Shaw and Partners Limited.
New stapled securities issued under the Placement will rank equally with existing Abacus stapled securities.
Following settlement of post balance date transactions and the Placement, Abacus’ gearing will be 30.9%.
On completion of the Placement Abacus’ pro forma NTA per stapled security is expected to be $3.70.
Security Purchase Plan
Eligible Abacus securityholders8 on the register at 7pm (Australian Eastern Daylight Time) on 16 March 2022
in Australia and New Zealand will be invited to subscribe for up to $30,000 of new stapled securities at the
same price as new stapled securities issued under the Placement, free of any brokerage or transaction
costs. The SPP will not be underwritten.
New stapled securities issued under the SPP will rank equally with existing Abacus stapled securities.
Further information on the SPP will be lodged with the ASX and sent to eligible unitholders on or around 24
March 2022.
Summary and Outlook
Abacus is positioned as a strong asset backed, annuity style A-REIT focused on the ownership and
management of Commercial and Self Storage real estate and operation of storage locations.
Abacus’ Managing Director, Steven Sewell, said, “With replenished investment capacity and a balance sheet
set with conservative gearing, the Group is positioned to deliver on our Self Storage development pipeline
and take advantage of high quality growth opportunities that will enhance the Group’s ability to deliver
recurring income and value creation over the medium to long term.”
5
Includes 3 post balance date transactions.
6 Based on target maximum gearing of up to 35%.
7 Based on distribution guidance of at least 18.0 cents per stapled security for FY22 which reflects a payout ratio in the range of 85-95%
of FFO. The FY22 guidance is predicated on business conditions continuing to normalise in the second half of FY22 and no further
COVID-19 disruptions.
8 Eligible securityholders are registered Abacus stapled securityholders as at 7pm (Australian Eastern Daylight Time) on 16 March 2022,
who have a registered address in Australia or New Zealand, do not hold Abacus stapled securities on behalf of a person who resides
outside Australia or New Zealand and are not in the United States or acting for the account or benefit of a person in the United States.
3
Including the impact of the Placement and based on information currently available and barring any
unforeseen events, Abacus is pleased to reaffirm its distribution guidance of at least 18.0 cents per stapled
security for FY229
.
Timetable
Event Date (Sydney time)
Announcement of the Equity Raising Thursday, 17 March 2022
Placement
Placement bookbuild Thursday, 17 March 2022
Announcement of outcome of the Placement Friday, 18 March 2022
Settlement of new stapled securities issued under the Placement Tuesday, 22 March 2022
Allotment and trading of new stapled securities issued under the Placement Wednesday, 23 March 2022
SPP
Record date for SPP Wednesday, 16 March 2022
(7:00pm)
SPP offer period Thursday, 24 March 2022 to
Thursday, 14 April 2022
SPP results date Wednesday, 20 April 2022
Allotment of new stapled securities issued under the SPP Tuesday, 26 April 2022
The timetable is indicative only and subject to change. All times represent Australian Eastern Daylight Time.
Abacus reserves the right with the consent of the Underwriters to amend any or all of these events, dates
and times subject to the Corporations Act 2001 (Cth), ASX Listing Rules and other applicable laws. The
commencement of quotation and trading of Abacus’ new stapled securities is subject to confirmation from
ASX.
Additional information
Additional information about the Placement and SPP, including certain key risks, is contained in the investor
presentation released to the ASX today.
All dollar values are in Australian dollars (A$) and financial data is presented as at 31 December 2021 unless
otherwise stated.
END

DYOR

i hold ABP ..

am currently up 19% on this , so this offer isn't that appealing ( av. SP about $2.98 )

BUT i will watch in case the SP goes noticeably under the SPP price

 

[Dona Ferentes]

ABP was 6.8% higher after a successful completion of the first stage of a $225 million equity raise for its soon-to-be-listed offshoot Abacus Storage King. ABP also announced it’s going to pay a 9.4c dividend at the end of the month

 

[finicky]

I put in a bid for 2,000 @ 2.75 late in trading today.
Greg Canavan dropped a report on it just as the trading halt hit a few days ago.
He sees the self storage arm of the business as significantly undervalued relative to its book value.
Buying now doesn't get me into the SPP for the spin-off entity, Abacus Storage King (ASK), but it would get me one ASK share for one ABP share.

 

[finicky]

Picked up some more ABP @ 1.615
My understanding, unless I'm screwing up, I will receive one destapled Abacus Storage King (ASK) share for one ABP share. ASK should list some time in August. Apparently self storage assets are usually valued at book value and are more valuable by that metric than office properties. Plus Storage King has growth aspirations that will be funded by the float. All from Greg Canavan on Fat Tail Advisory. I've never owned a REIT before.
I think ABP went ex div today? Haven't checked.

Held

 

[finicky]

... meant bought @ 2.615 of course

 

[divs4ever]

Picked up some more ABP @ 1.615
My understanding, unless I'm screwing up, I will receive one destapled Abacus Storage King (ASK) share for one ABP share. ASK should list some time in August. Apparently self storage assets are usually valued at book value and are more valuable by that metric than office properties. Plus Storage King has growth aspirations that will be funded by the float. All from Greg Canavan on Fat Tail Advisory. I've never owned a REIT before.
I think ABP went ex div today? Haven't checked.

Held

that is how i read the ann. , the main gotcha with REITs is no franking credits

haven't been watching today about the ex-div.

have held these for while but added some extra recently

good luck

( am still pondering which , if any to buy extra of after the split

 

[finicky]

BIt of a bump in ABP today as shareholder voting is happening for destapling ABP into two entities, one of which is "the most recognised self storage brand in Australia", says management, to be listed under asx code: ASK. In times of upheaval, like renters having to queue up like supplicants for over-priced crap accomodation, it suggests a 'bright future' for self storage units - I've experienced the sheer desperate necessity of them myself; next and only other option was the tip for my possessions. It's not getting any better foreseeably.
Trying to confirm whether a buy of one ABP today still gets you one ASK in the destapling - must I guess, otherwise there'd be more than a dollar drop in the ABP price rather than a 3.5% rise intraday. Strange - there's been plenty of forenotice about this, since before it was cum a good dividend, yet buyers are boosting it today.

Oh, and kudos to @Bushman who drew notice to this stock at the start of the thread when ABP was 21c! and it was 2 months before the bottom of the GFC. Another good poster lost with no acknowledgment of his post.

Held

 

[finicky]

ABG @ 1.09

This is now under ticker ABG after 'destapling'. It's self storage assets have been hived off to new listing Abacus Storage King (ASK)

Added 2,000 @ 1.10 this morning. Flying blind on it and relying on Greg Canavan's assessment and value estimation. A couple of days ago, when ABG was trading at 1.20, he estimated that its share price was 0.40 (sic) of its NTA! ABG retains 19.9% of Storage King (ASK) post the destapling.
ASK is also trading at a big discount against its NTA - better than 25%.

The chart's pretty useless now because of the break up into ABG and ASK. The 15m chart hasn't given a buy signal.

Held

 

[divs4ever]

0BG @ 1.09

This is now under ticker ABG after 'destapling'. It's self storage assets have been hived off to new listing Abacus Storage King (ASK)

Added 2,000 @ 2.10 this morning. Flying blind on it and relying on Greg Canavan's assessment and value estimation. A couple of days ago, when ABG was trading at 1.20, he estimated that its share price was 0.40 (sic) of its NTA! ABG retains 19.9% of Storage King (ASK) post the destapling.
ASK is also trading at a big discount against its NTA - better than 25%.

The chart's pretty useless now because of the break up into ABG and ASK. The 15m chart hasn't given a buy signal.

Held

yes i bought some @ $1.09 to go with the holding i bought as ABP and ABPDA , this morning ( also bought some extra ASK since the de-stapling )

it will be interesting to see if this results in some changes at the top level , since each stock was allegedly valued above $1.40 before the de-stapling , somebody is awry in their valuations ( the board or the sellers )

 

[finicky]

Greg Canavan sees it as market confusion after the break up together with everyone scared off office trusts

 

[finicky]

ASK is finding some low volume support on the 15 minute chart anyway.

15 MINUTE

 

[divs4ever]

Greg Canavan sees it as market confusion after the break up together with everyone scared off office trusts

as do i , which is why i am carefully nibbling , HOWEVER ABG is a diversified REIT with a variety of property assets not just office blocks

and ASK is in a niche i have little exposure to , but wish to increase that exposure ( and i keep missing my NSR targets )

 

[finicky]

Final result out and ABG up 8% early in the day.
Result presented is for before the separation of commercial property and self storage into separate entities, so includes both of what are now listed as ABG and ASK.
ABG up despite headline result of statutory profit (for ABG and ASK combined) of only $25.5m, down a massive 95% on FY22 due to a hefty 10.5% devaluation of the commercial property portfolio. Despite the capital devaluation, like for like income increased modestly for retail and office property.
The Funds From Operations (FFO) number (ABG + ASK) is up 3% and distribution up 2.2%.

Side-light: company suggests tailwinds for self storage (now listed as ASK) of: population growth, housing density and, interestingly to me, e-commerce. I hadn't before considered that self storage might be used for e-commerce 'logistics' but makes sense.

Held