Highlights

• Abacus Group shares gained 1.775% to AU$0.860 in the latest trading session.
• The company has agreed to sell a 19.60% interest in Storage King Group, with gross proceeds of AU$284.8 million.
• Proceeds from the transaction are expected to reduce debt and bring gearing to approximately 30%, supporting future growth opportunities.

Abacus Group Shares Rise on Storage King Sale

Abacus Group (ASX: ABG) shares rose 1.775%, or AU$0.015, to AU$0.860 in the latest trading session. The movement follows the company’s 18 September 2026 announcement regarding the sale of its interest in Storage King Group (ASX: SKG). Abacus Group has agreed to divest a 19.60% holding, with total gross proceeds expected to reach AU$284.8 million at an average price of AU$1.11 per security.

Strategic Sale to Simplify Portfolio

According to the announcement, the Storage King investment was no longer considered a core component of Abacus Group’s long-term strategy following the internalisation of the business. The company said the transaction is intended to simplify its operating structure, strengthen its capital position and allow greater concentration on its core Commercial Portfolio. Under the transaction, 10.37% of the Storage King interest will be sold to Ki Corporation at AU$1.20 per security, representing an 11.6% premium to Storage King’s 17 September closing price of AU$1.075. The remaining 9.23% interest will be sold through an underwritten block trade at AU$1.00 per share.

Debt Reduction and FY27 Distribution

The transaction is expected to have a direct impact on Abacus Group’s balance sheet. The company plans to use the net proceeds to repay debt, with gearing projected to fall to approximately 30%. The sale is also expected to reduce net tangible assets by 7 cents to AU$1.52 per security. For FY27, Abacus Group maintained distribution guidance of 6.70 cents per security, which is expected to sit at the upper end of its 80%-90% payout ratio. The company also expects 67% of the FY27 distribution to be fully franked, subject to the relevant approval.

Outlook

The Storage King divestment is expected to give Abacus Group greater financial flexibility as it moves towards its strategy as a specialised Commercial REIT. The company plans to direct the net proceeds towards debt repayment, with gearing projected to decline to around 30% based on its 30 June 2026 balance sheet, adjusted for the June distribution and debt repayment. This lower gearing is expected to provide additional capacity for future growth opportunities. The transaction also allows Abacus Group to streamline its portfolio by exiting an investment that it no longer considers central to its long-term strategy. The company intends to concentrate its resources on its core Commercial Portfolio, with a particular focus on investment opportunities across the Sydney and Brisbane office markets.

From a shareholder perspective, Abacus Group expects its FY27 distribution guidance to remain at 6.70 cents per security, which is projected to be at the upper end of its 80%-90% payout ratio. Around 67% of the FY27 distribution is expected to be fully franked, although this assumption is subject to approval for the remaining 5.88% Storage King interest sale to Ki Corporation. The sale therefore represents a significant portfolio transition for Abacus Group, combining the release of capital from its Storage King investment with debt reduction and a renewed focus on its Commercial Portfolio. The company’s ability to deploy the strengthened balance sheet towards future opportunities, particularly within its targeted office markets, will remain an important area for investors to monitor.

Note- All data presented is based on information available at the time of writing.

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