This article is from the Australian Property Journal archive
DESPITE a challenging economic backdrop, Abacus Storage King (ASX: ASK) has returned strong results, with the self storage asset class remaining resilient.
Abacus Storage King delivered a statutory net profit of $138.2 million for the full year ended 30 June 2024.
The group delivered funds from operations of $81.1 million, or 6.36 cents per security and a distribution in line with guidance at 6.0 cents per security. And NTA of $1.58 per security.
FY24 saw established store RevPAM increase by 4.6% to $327psm from $313psm in FY23.
This result was driven by rental rate growth of 3.8% to $360psm from $347psm in FY23 and a 60 basis point increase in occupancy to 91.0% from 90.4%.
“The continued growth in RevPAM is a result of our portfolio of right sized, urban locations combined with our sector leading operating platform, Storage King,” said Steven Sewell, managing director at Abacus Group.
“Despite the inflationary headwinds, we expect our portfolio to continue to benefit from a range of tailwinds over the short to medium term, including organic growth as the self storage category continues to mature in Australia and New Zealand, acquisition opportunities in a heavily fragmented sector and the longer term platform initiatives to drive growth in brand, customer and revenue management.”
While WACR tightened two basis points to 5.55% from 5.57% in FY23.
Over the year, ASK acquired eight operating stores and three development sites for $137 million, which added 35,100sqm of NLA or 5% of portfolio.
With the group acquiring a long-term Mr Donut site in Melbourne’s south-east bayside region, paying $13 million for the vacant facility back in May.
ASK maintains a significant development pipeline expected to deliver 18 new stores across an estimated NLA of 103,000sqm over the short to medium term.
Pro forma gearing was at 27.5%, with the group’s target range of 25% to 35%, with pro forma funding capacity at more than $350 million.
Average cost of debt was at 3.5% and is expected to increase to an average cost of debt of 3.75% in FY25 with minimal debt expiry over FY25 to FY26.
“FY24 was a strong first financial year for ASK as a standalone entity. We remain disciplined on directing capital towards assets that provide potential for enhanced income growth and the creation of medium to long term value,” said Evan Goodridge, CFO at Abacus Group.
“It was particularly pleasing to execute a credit approved underwriting commitment and transition to an unsecured debt platform, which will unlock significant value and once again evidences a strong show of support from our lenders.”
ASK provided a FY25 distribution guidance of 6.1 cents per security and is targeting a full year payout of 90% to 100% of FFO.
