Abacus clears Storage King stake to sharpen commercial property focus

$284.8 Million Exit Recasts Abacus’s Portfolio

Abacus Group (ASX:ABG) is exiting its 19.60% holding in Storage King Group (ASX:SKG) for gross proceeds of $284.8 million, marking a decisive retreat from an investment it no longer regards as core. The proceeds will be used to repay debt, taking gearing to approximately 30% and leaving Abacus more tightly focused on its commercial property portfolio.

The sale combines a strategic transaction with Ki Corporation and an underwritten institutional block trade. Ki will buy 10.37% of SKG for $1.20 per security, a premium of 11.6% to SKG’s 17 September close of $1.075 and 10.8% to its five-day volume weighted average price.

Block Trade Completes the Institutional Exit

The remaining 9.23% will be sold through a block trade underwritten by Barrenjoey Markets at $1.00 per security. That price is 7.0% below SKG’s latest close and 7.7% below its five-day volume weighted average price, highlighting the different pricing attached to the strategic and institutional portions of the exit.

The block trade is expected to settle on 22 September 2026. Ki’s initial 4.49% acquisition, worth $70.8 million, is expected to settle on 23 September, subject to completion of the block trade. The remaining 5.88% sale to Ki requires an ordinary securityholder resolution because it is treated as a substantial-asset disposal to a related party under ASX Listing Rule 10.1. A vote is expected at Abacus’s annual general meeting in late November.

Debt Reduction Comes With an NTA Cost

Abacus expects the transaction to reduce net tangible assets by 7 cents to $1.52 per security, based on its 30 June 2026 balance sheet adjusted for the June distribution and debt repayment. The company said the lower gearing will provide capacity for future growth opportunities in its Sydney and Brisbane office-focused commercial portfolio.

FY27 distribution guidance remains 6.70 cents per security, now expected to sit at the top end of the group’s 80% to 90% payout ratio. The guidance assumes approval of the remaining 5.88% sale to Ki, while 67% of the FY27 distribution is expected to be fully franked. That makes the November vote more than a procedural milestone: it is also an assumption underpinning the stated distribution position.