Abacus lifts its stake in National Storage REIT

Abacus Property Group has bumped up its stake in the National Storage REIT.

National Storage REIT was hard hit in the market rout prompted by the coronavirus Picture: Shae Beplate

The listed Abacus Property Group has signalled plans to kick off consolidation activity in the beaten down real estate investment trust sector by bumping up its stake in the National Storage REIT.

The $1.3bn storage company was hard hit in the market rout prompted by the coronavirus as a major US suitor walked away from a takeover, but it may now be a bargain-priced target for its local rival.

Abacus on Friday confirmed it was behind a series of trades this week that boosted its stake in the self-storage company to 7.1 per cent, giving it a seat at the table in any takeover activity.

The storage company was set to be taken over by US giant Public Storage at $2.40 a share, but the coronavirus crisis forced the suitor to pull back. Hong Kong’s Gaw Capital and private equity firm Warburg Pincus also chased the storage company. They had put up all-cash schemes in February that priced National Storage at $2.20 a share. But their interest was trumped by the US group before all the proposals were pulled due to the virus-related turmoil.

Abacus has been acquiring shares in National Storage since March 19, a day after Public Storage pulled back from a deal. The crisis prompted National Storage to undertake a $300m equity raising to fortify its balance sheet.

Abacus had been on the register but was cut out of the storage company’s raising and its recent buying signals its desire to have a say in its future.

Abacus has a $3.3bn property portfolio, of which about $1.1bn is in the self-storage business, which is externally managed by Storage King, in which Abacus owns a stake.

“The fundamentals for the asset class are cyclical given the discretionary nature of the expenditure,” Macquarie analysts said. “Valuation is not attractive though we acknowledge the share price is currently below the last bid.”

National Storage shares closed up 2c at $1.69.