After finalising a $4 billion buyout for National Storage REIT, Brookfield and GIC Private Limited could already be turning their attention to their next sector opportunity. Speculation suggests the North American private equity firm and the Singapore sovereign wealth fund have informally engaged with NSR's rival, the $1.94 billion Abacus Storage King, about a potential future buyout of that business. Any deal is not expected to be imminent, as it would take some time to bed down the latest acquisition, but it could be on the horizon for the near term.
Abacus Storage King may want a 15% premium to its net tangible assets of $1.74, taking the transaction size to $2.63 billion or $2.26 per share. Now Abacus Storage King, run by the listed Abacus Group, is considering internalising its management. Sources believe GIC and Brookfield will retain NSR's 10% in Abacus Storage King as a strategic foothold for a deal down the track.
Storage assets have been seen as one of the more resilient asset classes in a downturn for the real estate sector, with low operating costs and strong profit margins.
