Abacus Storage King (ASX:ASK) management used its half-year FY2026 results briefing to highlight continued RevPAM growth in its established portfolio, rising net tangible assets and an active development and acquisition program, while also outlining early-stage discussions about potentially internalizing its management function.
Operating performance and portfolio metrics
Managing Director Steven Sewell said the Storage King business “continues to perform well” with ongoing revenue per available square meter (RevPAM) growth, supported by what he described as sector-leading operating metrics. The company reported net tangible assets (NTA) of AUD 1.76 per security, up from AUD 1.74 at June and AUD 1.60 a year earlier, which Sewell attributed to strong demand for self-storage assets and elevated institutional investor interest in Australia and New Zealand.
On the operating side, the 104-store established portfolio recorded RevPAM growth of 1.5% versus the prior corresponding half and maintained occupancy of 90.5%. Sewell noted all Australian regions delivered positive RevPAM growth, while New Zealand remained softer. Excluding New Zealand, RevPAM growth in Australia alone was 2.9%.
Half-year financial results and distribution
CFO Evan Goodridge reported funds from operations (FFO) of AUD 41 million, or AUD 0.0312 per security, and a half-year distribution of AUD 0.031 per security. He said 25% of the distribution was delivered as a fully franked dividend. While the distribution was “near the upper end” of the company’s stated 90%–100% payout ratio range for the half, Goodridge said the company was forecasting a “positive second-half skew,” which would bring the full-year payout closer to the midpoint of the range.
Reported FFO declined 5.3% compared with FY2025, but Goodridge said that adjusting for a one-off AUD 3.9 million gain in the prior year from the sale of a remaining investment in a listed peer, underlying earnings were stable period-on-period.
Revenue in the established portfolio grew 2.8%, which management characterized as solid given competitor discounting and weaker economic conditions in New Zealand. On a like-for-like basis, the Australian portfolio grew revenue by 4.4%, which Goodridge said demonstrated pricing power in metropolitan locations under the Storage King brand. Revenue in the acquisition portfolio increased by AUD 0.3 million and the stabilizing portfolio by AUD 2 million, reflecting what management described as income acceleration as assets transition to Storage King management and lease toward maturity.
Operating expenses increased by AUD 4.1 million, driven primarily by non-controllable costs, including land tax (up 27%) and other statutory expenses (up 13% like-for-like). Despite this, Goodridge said the operating margin held steady at 61% since the second half of FY2025.
Capital structure, debt and market conditions
Goodridge said the group refinanced its AUD 1.25 billion unsecured debt facility in December 2025, reducing margins by about 15 basis points to 1.2% and extending tenor by one year across all tranches. ASK’s reported weighted average cost of debt for the half was 3%, a figure that excluded approximately AUD 6 million of interest capitalized into the active development pipeline. Including capitalized interest, Goodridge said the marginal cost of debt for the half was around 4%.
Management noted a shift in interest rate expectations. Goodridge said markets were pricing in further rate rises over the next 12 months, and ASK expects full-year cost of debt to rise by about 50 basis points to around 3.5% on a reported basis (or around 4.5% including capitalized interest). In Q&A, Sewell said he currently expects peak rates to stabilize in calendar year 2028. ASK reported it is hedged at 74%.
Gearing was 31.9%, within the target range of 25%–40%, and management cited funding capacity of around AUD 500 million. Total store asset value increased AUD 137 million to AUD 3.5 billion, driven by AUD 58 million of acquisitions, AUD 52 million of capex and AUD 27 million of valuation growth.
Goodridge also said self-storage capital markets remain competitive, with increased institutional capital flows contributing to cap rate compression of two basis points to 5.43% over the past 12 months, despite a rising interest rate environment.
Development pipeline, acquisitions and regional trends
ASK said it expects nearly 120,000 square meters of new lettable area in the short to medium term. During the half, the company opened two developments: Knoxfield (Victoria) and a satellite facility integrated into its Chatswood store in Sydney. Sewell said two further development openings are expected in the second half: Wollongong (New South Wales) and Mordialloc (Victoria).
The company invested AUD 58 million across two trading store acquisitions (Coburg in Victoria and Morayfield in Queensland) and two development sites (Port Melbourne and St Albans). In Q&A, management said the acquisitions were at passing cap rates around 1%–2% below expected mature cap rates due to rental upside, and noted expansion potential at the Coburg/Brunswick East asset.
Fund manager Nikki Lawson said the established portfolio’s 1.5% RevPAM growth was driven by 2.9% growth in Australia and offset by a 7.1% decline in New Zealand. She said Australian performance reflected strong existing customer rate increases supporting rental rate growth, partially offset by a deliberate decision to “give up some occupancy” amid aggressive competitor discounting. Lawson added that while incentives continue, face rents began improving from September, with Queensland described as an early mover.
On New Zealand, Lawson said the business had “temporary headwinds,” citing a weak economy, weaker net migration, currency declines and remedial actions at some assets. She told analysts that roughly a third of the New Zealand portfolio is undergoing remedial work, with occupancy reduced at five stores to allow works to proceed, and that impacts would persist for months into the second half. Despite this, she said street rates had started lifting in New Zealand in the last quarter and management remained positive on the long-term value of the New Zealand investment.
Platform initiatives and internalization discussions
Management highlighted the rollout of a proprietary revenue management system (RMS), now implemented across all established stores following a 2025 trial. Lawson said early results in the initial phase-one stores showed base rates widening relative to non-RMS stores, though with short-term volatility as under-rented units are repriced. She said the first iteration of RMS would “fully impact” across the business from May 2026, with store managers working alongside a centralized revenue management team.
Lawson also cited marketing and customer metrics, including nearly 150,000 “quality inquiries” over the last six months and a conversion rate of 25%, despite a deliberate strategy to avoid following heavy discounting in the market. She reported a customer net promoter score (NPS) of 73 and said churn remained stable.
Separately, Sewell said the company had commenced discussions with Abacus Group regarding a potential internalization of ASK’s management function, emphasizing that discussions are at an “early stage” with no certainty of a transaction. He said the board believes the business has reached a scale where it is appropriate to assess whether internalization could better support long-term growth ambitions. In response to analyst questions, management did not provide quantitative cost savings and said it would update the market when more details are available.
ASK reaffirmed FY2026 distribution guidance of AUD 0.062 per security, with management citing sector fundamentals, portfolio quality and the strength of the Storage King operating platform.
About Abacus Storage King (ASX:ASK)
Abacus Storage King owns, operates, and manages a self-storage operating platform in Australia and New Zealand. The company is based in Sydney, Australia. Abacus Storage King operates as a subsidiary of Abacus Storage Operations Limited.
