Abacus Group (ASX:ABG) Reworks Property Portfolio After Storage King Transaction

Aditi Sarkar

19 September 2026 09:59 PM AEST

Abacus Group (ASX:ABG) Reworks Property Portfolio After Storage King Transaction

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Highlights

Abacus Group (ASX:ABG) agreed to sell its entire 19.60% stake in Storage King Group for total gross transaction proceeds of $284.8 million.
Net transaction proceeds are intended for Debt repayment, with pro forma gearing expected to fall to around 30%.
The proposed transaction is projected to reduce net tangible properties by 7 cents to $1.52 per security.
FY27 distribution guidance continues to remain 6.70 cents per security, now expected at the top end of the 80%-90% payout range.

Abacus Group (ASX:ABG) has entered an agreement to sell its entire 19.60% stake in Storage King Group (ASX:SKG), marking another step in its shift towards a specialised commercial property properties. The proposed transaction is projected to generate total gross transaction proceeds of $284.8 million. Abacus Group plans to apply the net transaction proceeds to debt repayment, as retaining its existing FY27 distribution guidance.

The disposal follows the internalisation of Storage King Group's management arrangements previously in 2026. That process changed the relationship between the two listed groups and left Abacus Group's minority stake outside its stated longer-term strategy. The transaction therefore combines asset portfolio simplification with a measurable change to Leverage and asset backing.

How the Storage King disposal is structured

The disposal comprises a strategic transaction to Ki Corporation and an underwritten institutional block trade. In combination, the transactions cover Abacus Group's full 19.60% stake and produce gross transaction proceeds of $284.8 million. One portion of the Ki Corporation transaction continues to remain conditional on approval by Abacus Group securityholders because it involves a related party under ASX Listing Rule 10.1.

The conditional component represents a 5.88% stake in Storage King Group. Abacus Group expects securityholders to vote on that component at its Annual General Meeting in late November 2026. Until approval is obtained and settlement occurs, the financial effects attributed to that portion remain prospective. This distinction matters when assessing the timing of the expected debt reduction and the final completion of the disposal.

Debt reduction and the NTA trade-off

Abacus Group plans to use the net transaction transaction proceeds to repay borrowings. On a pro forma basis, using the 30 June 2026 Balance Sheet and adjusting for the June distribution and transaction transaction proceeds, gearing is projected to decline to around 30%. This would compare with posted gearing of 36.2% at 30 June 2026 and would move the group additional below its stated ceiling of 40%.

Lower gearing can reduce financing exposure and create additional balance-sheet capacity, but the transaction in addition carries an asset-backing cost. Abacus Group expects net tangible properties to decrease by 7 cents to $1.52 per security. The transaction therefore exchanges an Equity stake in a self-storage REIT for lower debt and a more concentrated commercial property properties. Investors will need to assess that trade-off via subsequent financial statements once the relevant settlements are reflected in posted figures.

Distribution guidance and asset portfolio direction

Abacus Group retained FY27 distribution guidance of 6.70 cents per security. Following the transaction announcement, the group expects that distribution to be at the top end of its targeted payout range of 80%-90% of funds from operations. It in addition expects 67% of the FY27 distribution to be fully franked. These figures remain guidance and are subject to operation conditions and completion assumptions, including approval of the conditional Ki Corporation tranche.

After the disposal, Abacus Group's strategy centres on its commercial asset portfolio, with an emphasis on office properties in Sydney and Brisbane alongside its retail exposure. The narrower structure may make deployment of Capital easier to evaluate, as it in addition reduces exposure to self-storage. Future reporting will show whether debt repayment improves stake costs and free Cash Flow as anticipated, and whether the remaining asset portfolio can support the stated payout settings.

FAQs

Q: What has Abacus Group agreed to sell?

A: Abacus Group has entered an agreement to sell its entire 19.60% stake in Storage King Group via a strategic transaction and an institutional block trade.

Q: How much will the Storage King disposal generate?

A: The proposed transactions are expected to generate total gross transaction proceeds of $284.8 million before costs.

Q: How will Abacus Group use the transaction proceeds?

A: The group plans to apply the net transaction proceeds to debt repayment, with pro forma gearing expected to decline to around 30%.

Q: What is the expected effect on net tangible properties?

A: Abacus Group expects the disposal to reduce NTA by 7 cents to $1.52 per security.

Q: Does the transaction change FY27 distribution guidance?

A:The group retained guidance of 6.70 cents per security and expects the distribution to be at the top end of its 80%-90% payout range, subject to its stated assumptions.

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