Abacus adds 22 Self Storage Assets worth $370m

20 October 2021

Abacus Property Group has been active of the 1st quarter of FY22 to grow its portfolio of Self Storage locations and to manage operating conditions in its Commercial portfolio due to the Covid-19 related impacts across Australia and New Zealand.

Abacus Managing Director, Steven Sewell commented “Demonstrating the benefits of portfolio diversification, first quarter performance was solid with continued momentum in our Self Storage portfolio, particularly pleasing to see. Following an active quarter with deployment of $370 million of capital into the Self Storage sector, Abacus remains conservatively geared at 30.4%, with sufficient liquidity reserves to enable it to strategically invest where it judges there is long term value and a clear path to income growth.”

The Group continued to acquire new Self Storage locations and in the quarter to 30 September 2021, has transacted on 22 assets for $370 million. Of these acquisitions $271 million have already settled with the remaining $99 million due to settle by end FY22.

Breaking down these 22 acquisitions, 11 were existing Storage King managed stores, five were independently managed and the remaining six are development sites. Highlighting our investment focus on stores located in the top three Significant Urban Areas (SUA), 12 properties (70% by value) are located in the Sydney SUA.

The Group also completed two facilities at Rowville, VIC and Woonona, NSW offering 10,000 sqm of additional space.

Trading conditions in the Self Storage portfolio further improved during the quarter to 30 September 2021, following on from the strong results demonstrated in FY21.

Established portfolio metric1Q22 AverageFY21 Average
Occupancy by area92.4%91.2%
Average Rent per square metreAUD $306AUD $285
Revenue Per Available Metre (RevPAM)AUD $283AUD $260

The established portfolio occupancy levels increased to 92.4% up from 91.2% at 30 June 2021 while Average Rent per square metre and RevPAM grew to $306 and $283 up from $285 and $260 respectively at 30 June 2021 as trading conditions continue to strengthen nationally.

In the Commercial portfolio, over 5,900sqm of Office leasing was completed across 11 transactions with a further 1,790sqm of Retail leasing was also completed during the quarter.

Key metric30 September 202130 June 2021
Office occupancy (by area)95.5%95.5%
Office weighted average lease expiry (by income)3.8 years3.9 years
Office average incentives30%29%
Retail occupancy (by area)93.6%92.7%
Retail weighted average lease expiry (by income)6.4 years5.4 years

While Covid-19 related disruptions in a number of key Office markets have impacted leasing transaction volumes, occupancy within the Abacus portfolio was flat with the weighted average lease expiry (WALE) remaining stable. Leasing incentives marginally increased. 

Covid-19 related border closures and lockdowns presented a challenging quarter in the Abacus Retail portfolio. Despite this backdrop, portfolio occupancy increased to 93.6% from 92.7% at FY21 and WALE extended out to 6.4 years up from 5.4 years as at FY21 due to the acquisition of Myer Melbourne. On a like for like basis, quarter end occupancy was 91.9% and the WALE was 5.2 years.

With the easing of restrictions across our Retail portfolio markets we expect to see consumer and customer confidence gradually return.

Rent collection was resilient with 97% of Commercial portfolio rents collected in the first quarter.