Highlights

• Statutory profit of $154.3 million and a distribution of 6.20 cents per security delivered for FY26.

• Management platform successfully internalised from Abacus Group on 30 June 2026, expected to be approximately 6% accretive to FFO per security on a pro forma annualised basis.

• Record 34,500 sqm of NLA added from four new stores and five expansions; portfolio NLA grew 5%.

• FY27 distribution guidance of 4.50 cps issued, with a widened 80-100% FFO Payout Ratio to fund growth pipeline.

Storage King Group (ASX:SKG) is a leading self-storage REIT operating the Storage King Brand across Australia and New Zealand. The group owns and operates a portfolio of self-storage facilities, developing and acquiring new stores to grow its net lettable area (NLA). Following the internalisation of its management platform from Abacus Group on 30 June 2026, SKG transitioned from an externally managed structure to a fully integrated operating model. Total Assets stand at $3.9 billion, with an established portfolio of 103 mature stores.

Recent Development

Released on 14 August 2026, SKG reported FY26 statutory profit of $154.3 million and a distribution of 6.20 cents per security. FFO from the established portfolio was $82.1 million, down 3.4% on FY25, with Total RevPAM (Revenue Per Available Metre) of $341 psm — up 0.7% overall, with Australian RevPAM growing 2.7% to $348 psm. New Zealand RevPAM declined 11.7% due to foreign exchange, Capital works completion, and weaker economic conditions. Portfolio occupancy was 90.2%, down 100 basis points, reflecting elevated discounting and competitive conditions.

The internalisation of the Abacus Group management platform completed on 30 June 2026, generating approximately $7 million in annualised cost savings and expected to be approximately 6% accretive to FFO per security. The proprietary Revenue Management System (RMS) is now live across all owned stores. SKG opened four new next-generation stores and completed five expansions, adding a record 34,500 sqm of NLA (5% portfolio growth). Three trading stores and three development sites were acquired for total consideration of approximately $78 million. FY27 distribution guidance of 4.50 cps was issued.

Sector Context

The Australian self-storage sector is experiencing competitive pressure as new Supply enters key markets, and elevated discounting is impacting occupancy-weighted revenue metrics. Despite this, SKG's strong brand recognition, high-quality locations, and deployment of the RMS platform provide competitive advantages in revenue optimisation. Longer-term, household mobility, downsizing by ageing populations, and SME storage Demand remain structural growth drivers. The Australasian self-storage sector is more fragmented than mature US or European markets, offering ongoing consolidation opportunities for scaled operators like SKG.

Risks and Uncertainties

Higher net finance costs are expected in FY27 as favourable legacy hedges roll off — the average cost of Debt is expected to rise above the FY26 FY26 average of 4.2%. Total Occupancy of 90.2% — down 100bps — and New Zealand RevPAM declining 11.7% highlight near-term operational headwinds. The widened FY27 payout ratio of 80-100% of FFO (from the implied FY26 distribution ratio) reduces short-term income visibility for income-focused investors. Development pipeline delivery of 16 stores over the medium term requires consistent capital discipline and construction execution.

Catalysts to Watch

The realisation of the full annualised FFO accretion from the management internalisation (approximately 6%) is the most immediately trackable FY27 catalyst. Improvement in New Zealand RevPAM — supported by the May 2026 completion of capital works — is expected to drive Earnings recovery there in FY27. The stabilisation of recently developed and acquired stores toward established metrics (the "stabilisation portfolio" pathway) represents a significant embedded earnings opportunity without additional capital. Progress on the 16-store development pipeline (approximately 110,000 sqm of NLA) over the medium term will be a key indicator of Long-term Growth delivery.

Final Thoughts

Storage King (ASX:SKG) has navigated a strategically significant FY26, completing the management internalisation and expanding the portfolio in a more competitive market. The Business enters FY27 with improved structural alignment, a growing proprietary RMS platform, and a substantial embedded growth opportunity from stabilising stores — though near-term earnings headwinds from finance costs and competitive conditions require investor patience.