Abacus Property Group have announced a fully underwritten capital raising of $200m to replenish its investment capacity for continued deployment into acquisitions yet to settle and into the identified development and expansion pipeline in its Self Storage portfolio.
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.
The Groups’ recent HY22 results included;
- Material portfolio transformation achieved with approximately $3.2 billion deployed since FY17 including over $1.8 billion into Self Storage
- In calendar 2021 Abacus’ established Self Storage portfolio 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 billion 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 capital raising enables Abacus to continue this momentum and upgrading the portfolio quality via development, expansions, and acquisitions.
- Strong Self Storage income growth in HY22 has been strongly supported by macro tailwinds, with established portfolio RevPAM growth of 11.7%
- 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 135 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 million 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
The offer price per new stapled security has been set at $3.38, 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 yield
The capital raising is fully underwritten by Barrenjoey Markets Pty Ltd and Shaw and Partners Limited.
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.
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.”