ASK - Abacus Storage King

[System]

Abacus Property Group is proposing to establish Abacus Storage King, a new ASX listed Self Storage operating platform and real estate investment group which will own, operate and manage the Storage King operating platform and own a $3.1 billion Investment Portfolio, comprising of $2.6 billion Self Storage Properties and $0.5 billion of Other Investments.

It is proposed that Abacus Storage King will be established through a De-stapling of Abacus Property Group such that, following the De-stapling and prior to completion of the Offer:

• Abacus Group: Abacus Property Group Securityholders will hold the same direct interest in Abacus Group; and
• Abacus Storage King: Abacus Property Group Securityholders will have a combined:

— indirect (look-through) interest in Abacus Storage King via Abacus Group’s investment in Abacus Storage King; and
— direct interest in Abacus Storage King Securities.

Through the combined indirect and direct interest, Abacus Property Group Securityholders will not have their existing interest in Abacus Storage King diluted prior to completion of the Offer.

There may be dilution for Abacus Property Group Securityholders arising from the Offer depending on their respective levels of participation in the Offer.

Abacus Property Group Securityholders will, as a result of the De-stapling, each hold one Stapled Security in Abacus Group and one Stapled Security in Abacus Storage King for each Abacus Property Group Security held on the De-stapling Implementation Date.

If the Proposal proceeds, Abacus Property Group as it currently exists will become two separately listed vehicles with different investment attributes and characteristics:

• Abacus Group (the ticker ‘ASX:ABP’ until shortly after the Normal Trading Date when it is expected to be changed to the new ticker ‘ASX:ABG’): will continue to own and manage its high quality, eastern seaboard focused $2.4 billion Commercial Portfolio, which is diversified by market, asset grade, asset life cycle, customer industry and customer profile. Abacus Group aims to direct capital towards assets that provide potential for income growth and ultimately create value for Abacus Group Securityholders.

Abacus Group will also externally manage and hold a minority interest of 19.9% in Abacus Storage King; and

• Abacus Storage King (ticker ASX:ASK): will have a GAV of $3.1 billion. It will own, operate and manage the Storage King operating platform and own a portfolio of 131 high quality and metropolitan focused Self Storage Properties, including 110 trading stores with 582,861 sqm of NLA81 and 21 developments with a valuation of $2.6 billion and WACR of 5.54%, and have $0.5 billion of Other Investments including $238 million or 7.2% interest in another ASX listed Self Storage REIT. Abacus Storage King will be externally managed by Abacus Group and have a majority independent Board of Directors.

It is anticipated that ASK will list on the ASX during August 2023.

Abacus Group

Abacus Group - Investing for your future, Creating spaces for now. Leaders in Australian property investment, management and value creation...

abacusgroup.com.au

 

[divs4ever]

yes , decisions , decisions

where did i bias my cash ? into the Storage arm ( ASK ) or the original business during the price dip ( if any )

after all it had little storage exposure when i first bought into ABP , this deal is more or less a bonus for me

 

[finicky]

Charts of Abacus Storage King (ASK) and National Storage REIT (NSR) compared.

Following premises need to be checked by anyone interested in a buy as I made my best shot calcs of ASK metrics from their recent annual financial report and my normal modus op is to just use summary financial stats conveniently provided by CommSec.

First up I'll remind that at the time of 'destapling' the self storage assets (ASK) out of Abacus Property Group (ABG) they successfully did a fully underwritten pro rata raise at 1.41. Price closed today @ 1.13.

I've read but not checked that NSR is the biggest company of its kind in Australia while Storage King is second. Market Caps are about 3:1

National Storage REIT is trading at 10 -11 x Book Value of $0.20 and makes a median ROE of around 50%
Abacus Storage King has no stats, being listed for only a few months. But I get from their recent accounts that Equity is $261m with 894m shares, giving a book value of $0.29
If we assume ASK operates at half the profitability of NSR it's still be worth about $1.50, but what if it's just as profitable as NSR when it settles down? Or somewhere inbetween? Of course I have nfi how profitable ASK will actually be.

ASK Held

NSR DAILY

ASK DAILY

 

[finicky]

Reporting 1QFY24 and confirming guidance for FY24. Trading has marked it down a few cents so I added 3,000 @ 1.105, which might have been a bit eager given distribution FY24 is guided at 6cps which is only +5% and without the benefit of franking. Can't say it's an exciting buy but seems safe.

NTA is $1.56
Occupancy down a bit comparing QFY24 to 1QFY23: 90.4% vs 91%
But rent/area is up comparing same Quarters: $353 vs $334 psm

Here's the factors they hope will drive their industry:

 

[divs4ever]

got a bundle courtesy of the ABP split added some more in the hectic early trading days

would rather 'wait and see ' but another dip below a dollar might have me reaching for my trusty calculator

i still have hopes for this , but my hopes have been wrecked before ( and not a flood of income coming in to allow a reckless 'splash of cash ' )

 

[houtman]

I bought some of these today courtesy of my sale of REP, preferred a REIT with lower gearing and higher NTA.

Waited for these to drop below $1, which they did, but I had no available funds at the time.

ASK (Mcap $1.4B) is the 2nd largest storage unit company in Australia, NSR(MCap $3B) is the largest.

There are acronyms aplenty in REITs reporting, all too much for me.

ASK has an NTA of $1.57/share and NSR has NTA of $2.48/share, so I have gone with ASK.

 

[divs4ever]

DIVESTMENT OF STAKE IN LISTED PEER

Abacus Storage King (ASX:ASK) today announced that it has successfully divested the remaining stake in its listed Self Storage peer.

Further details will be available as part of Abacus Storage King’s FY24 results to be released on Tuesday 13 August 2024.


Investor & Media Enquiries

Cynthia Rouse Executive General Manager Investor Relations and Corporate Communications+61 2 9253 8600

i hold ASK

 

[houtman]

DIVESTMENT OF STAKE IN LISTED PEER

Abacus Storage King (ASX:ASK) today announced that it has successfully divested the remaining stake in its listed Self Storage peer.

Further details will be available as part of Abacus Storage King’s FY24 results to be released on Tuesday 13 August 2024.


Investor & Media Enquiries

Cynthia Rouse Executive General Manager Investor Relations and Corporate Communications+61 2 9253 8600

i hold ASK

On page 5 of 31/12/23 they mention $173m remaining stake in a listed self storage peer.
We have 1.314B shares on issue so about 13c per share.

Special divie would be nice. Unexpected though.

 

[divs4ever]

On page 5 of 31/12/23 they mention $173m remaining stake in a listed self storage peer.
We have 1.314B shares on issue so about 13c per share.

Special divie would be nice. Unexpected though.

i would expect they would use it to pay down debt , or pick up a parcel of land for their next facility

but who knows maybe they have some other plans,like buy out a smaller ( non-listed ")competitor

 

[finicky]

Thanks for reminding me of this, I tend to ignore it. Only thing I have to add fwiw is that the DAILY chart is looking ok to me and higher looks more likely than not. A break through of the 1.25+ zone this time as better than 50/50. I'm seeing 1.35 as a good chance as the troughs in price, starting Oct 2023 are trending upwards and momentum indicators have headroom.

Held
No current intention of adding

DAILY All Data

 

[divs4ever]

Thanks for reminding me of this, I tend to ignore it. Only thing I have to add fwiw is that the DAILY chart is looking ok to me and higher looks more likely than not. A break through of the 1.25+ zone this time as better than 50/50. I'm seeing 1.35 as a good chance as the troughs in price, starting Oct 2023 are trending upwards and momentum indicators have headroom.

Held
No current intention of adding

DAILY All Data
View attachment 181029

ignore ??

i got some of these via the demerger and preferred adding these over the parent group

to me safe/personal storage was a better niche than aging retail centres , and offices

sure it will take a while to see if this can be self-sustaining ( and resist take-overs )

held and watching fairly closely

cheers

 

[finicky]

@divs4ever ignored because valuing it was too hard for me. There's ASK's share of equity from the destapling of the original ABP into ABG and ASK and then added ASK equity from its cap raise. No history as a separate entity of course. So it was easier to add a few on the flimsy basis of a casual chart reading then let it drift off the radar.
My original source was Greg Canavan anyway, and he dropped it from his recs list because of a dimming belief that his call on peaking rates was correct (the reason he liked unpopular AREITs)

 

[divs4ever]

@divs4ever ignored because valuing it was too hard for me. There's ASK's share of equity from the destapling of the original ABP into ABG and ASK and then added ASK equity from its cap raise. No history as a separate entity of course. So it was easier to add a few on the flimsy basis of a casual chart reading then let it drift off the radar.
My original source was Greg Canavan anyway, and he dropped it from his recs list because of a dimming belief that his call on peaking rates was correct (the reason he liked unpopular AREITs)

am expecting the financials to look sad as many tax write-downs will be claimed

there could be some property values decline

but since office space looks stressed, retail space troubled , homes and units looking stretched , and industrial space being questioned only 'data center ' REITs being popular storage looks like collateral damage in the short term .. but is that opportunity waiting

BTW i am currently focusing on REITs with healthcare exposure , but not exclusively so

i tend to use REITs as bond proxies

 

[finicky]

Odd that ASK reached 1.35 (almost) then keeled over so heavily. One notion I have is that price has returned to the 'best fit' lower line of an uptrending channel. Daily moves have gone indecisive which is good but momentum is not giving a strong clue to a rally, just oversold. I feel a rally is more likely than not but low conviction. Is it about weakening expectation of a lower rate in Oz?

Held
Holding

From Market Matters afternoon report

• Abacus Storage King (ASK) +0.84% issued a solid SepQ trading update and raised FY25 distribution guidance to 6.2c (previously 6.1c).

DAILY

 

[divs4ever]

not really a sexy niche , and NSR ( i don't hold ) has the score on the board

so the question is , do folks 'downsize ' and rent a storage shed , or stash the 'collectibles ' in a secure look up OR are so stretched they need to sell down to squash the outgoings

( i hold ABG and ASK )

 

[finicky]

Via Market Matters today:

• Abacus Storage King Raised to Buy at Moelis & Company; PT A$1.36

 

[divs4ever]

Abacus Storage King announced unfranked ordinary distribution of A$0.031 per security for six months ending 31 December 2024, with record date of 31 December 2024 and with payment date of 28 February 2025.

The Company's distribution reinvestment plan will not apply to this distribution

i hold ASK



if they can sustain a 6 cent div. per year ( 2 x 3 cents ) , i will be a content holder , indeed

 

[finicky]

@divs4ever, chart is looking pretty ratty now, it's put paid to my notion of a broad uptrending channel as price has fallen out of that channel.
This note from Market Matters today seems relevant while not mentioning ASK specifically:

• Property stocks have been on the nose in the last week or so, and our preferred exposures are back to attractive levels, with Mirvac (MGR) now sub $2, National Storage (NSR) back at $2.37 and Centuria Capital (CNI) sub $1.85.

DAILY

 

[divs4ever]

well property stocks usually rely on leverage and also the tenants to pay regularly to service the debt , and that works as long as vacancies don't rise too high

but commercial real estate relies on healthy corporate tenants , and how healthy are some of those corporates, currently

now ASK is largely travelling in uncharted waters , are the tenants , normal public , or small/medium businesses or a mix

( at one stage i used to rent storage and suggest a mixture is reasonably accurate .. heck one shed even had a resident band that stored and sometimes recorded/practiced in their unit , other units housed collectibles , usually vehicles but who knows those were only the ones i saw open when i was going about my stuff )

so how will ASK handle troubled times , i think i prefer them over commercial office space but crikey times could get rough