Abacus Profits from Commercial & Storage Sectors
Abacus announced its results for the half-year ended 31 December 2018 this week.
Group statutory profit of $127.8 million in HY19, up 9%
Abacus underlying profit of $72.0 million, down 7%
Distribution per security (DPS) of 9.25 cents, up 2.8%
Abacus Funds from operations (FFO) of $65.3 million, down 18%
FFO per security of 11.3 cents, down 18%
Net tangible assets (NTA) per stapled security of $3.29, up 3.5%
Gearing at 22.8%, down 50 basis points on FY18
$33.8 million FFO contribution, from Commercial portfolio valued at $1.365 billion
Like for like rental growth in Office up 9.2%, driven by eastern seaboard CBD
Acquisitions completed within the Commercial portfolio during the half including:
50% interest in "Kingsgate", a quality fringe office asset in Brisbane OLD, in partnership with Heitman LLC
50% interest in fringe office development site in Church Street, Richmond VIC, in partnership with Salta Properties.
Self Storage portfolio
$23.6 million FFO contribution, with Self Storage portfolio valued at $835 million
16.1 % compound annual growth in Self Storage AUM, since HY14
Strong passing yield of 7.0% on established portfolio
Multi-pronged growth strategy in Self Storage with $153 million of acquisitions, developments and operating platform initiatives including acquisition of a minority 25% stake in Storage King, driving self storage profitability and synergistic benefits.
Valuations across the portfolio provided a boost to profits with a $60M (3.2%) gain in total asset value to $2,200M.
Abacus is positive on its outlook and market positioning in the Office and Self Storage sectors, expecting these activities to drive attractive risk adjusted returns for our stakeholders in the short to medium term. The Group remains cautious on the Residential and discretionary Retail sectors.
The Group's capital allocation priorities are confirmed as:
Increasing our investment in longer dated core plus and develop to core Office assets
Increasing our investment in Self Storage
Exploring capital partnering opportunities with experienced groups
Abacus confirms distribution guidance of 18.5 cents per security for FY19.
ABP Trading Chart vs ASX200 AREITs
Blue - ABP
Purple - ASX200 AREITs