Key Highlights

  • Storage King Group (ASX:SKG) reported statutory profit of $154.3 million for FY26 and declared a total distribution of 6.20 cents per security.
  • Management internalisation was completed on 30 June 2026, with approximately $7 million in annualised cost savings expected and pro forma FFO per security accretion of about 6%.
  • Established portfolio RevPAM increased 0.7% to $341 per square metre, while Australian RevPAM rose 2.7% to $348 per square metre.
  • FY27 distribution guidance is 4.50 cents per security, with the group targeting an 80%-100% Payout Ratio as higher financing costs emerge.

Storage King Group (ASX:SKG) reported its financial results for the year ended 30 June 2026, with statutory profit reaching $154.3 million. The group also declared a distribution of 6.20 cents per security for FY26. The reporting period was marked by the completion of management internalisation, continued portfolio expansion and Investment in Revenue management capabilities.

Total Assets increased 8.1% from FY25 to $3.9 billion, while net tangible assets rose 1.7% to $1.77 per security. Weighted average Capitalisation rate stood at 5.42%, three basis points below the prior year.

Funds from operations were $82.1 million, representing a 3.4% decline from FY25. Total established portfolio RevPAM increased 0.7% to $341 per square metre, while total rental rate rose 1.3% to $378 per square metre. Established portfolio occupancy was 90.2%, 100 basis points lower than the previous year.

Management Internalisation Changes Operating Structure

A central development during FY26 was the completion of Storage King Group's management internalisation from Abacus Group on 30 June 2026. The transition moves the Business from an externally managed structure to an integrated operating model.

The company expects the transaction to generate approximately $7 million in annualised cost savings and approximately 6% accretion to FFO per security on a pro forma annualised basis. The company has also retained key self-storage management personnel through the transition.

The internalisation coincides with the implementation of Storage King’s proprietary Revenue Management System across all owned stores. The system is designed to support pricing optimisation and provide a data foundation for future revenue and analytics initiatives.

Australian Operations Offset New Zealand Weakness

Operating performance differed across the group's geographic markets. Australian established portfolio RevPAM increased 2.7% to $348 per square metre, with growth recorded across Australian regions.

New Zealand established portfolio RevPAM declined 11.7% to A$295 per square metre. The company attributed the decline to foreign exchange movements, weaker economic conditions and capital works conducted across the portfolio. Those capital works were completed in May 2026, increasing available storage capacity entering FY27.

Total established occupancy remained at 90.2% despite greater discounting and increased competition for new customers. The group reported an Operating Margin of 62% during the year.

Development and Acquisitions Expand the Portfolio

Storage King invested $78 million across three operating stores and three development sites during FY26, adding approximately 10,000 square metres of net lettable area.

Four next-generation stores were opened and five expansions completed, together representing approximately 34,500 square metres of additional NLA. Three operating stores were also acquired for approximately $55 million, while three development sites were acquired for approximately $23 million.

The medium-term development pipeline comprises 16 planned stores representing approximately 110,000 square metres of NLA, equivalent to around 15% of the portfolio. A further 23,000 square metres, or approximately 3%, is planned through expansions.

Funding Costs Become a Key FY27 Factor

Storage King entered FY27 with gearing of 33.7%, within its stated 25%-40% target range, and approximately $400 million of additional gearing capacity based on the upper end of that range.

The FY26 average cost of Debt was reported at 3.1%, while including capitalised interest the average cost was 4.2%. The company expects higher net finance costs in FY27 as historical hedges progressively roll off, debt is drawn to support development and capitalised interest associated with stabilising developments becomes relevant.

The company has consequently provided FY27 distribution guidance of 4.50 cents per security, with a targeted payout ratio of 80%-100% of FFO.

Conclusion

Storage King Group's FY26 results mark a transition toward an internally managed structure while the group continues expanding its store and development pipeline. Australian operating metrics increased despite competitive conditions, while New Zealand performance remained a constraint. The completed internalisation, revenue management system and substantial development pipeline provide the key structural features of the FY27 operating framework, although higher financing costs are expected to influence near-term distributions. The company's stated focus for the next period is therefore centred on converting recently developed and acquired assets into established Earnings while maintaining capital flexibility for further growth.