This article is from the Australian Property Journal archive
ABACUS Property Group has recorded a statutory profit of $84.7 million in FY20, down 58.2% from $202.7 million in FY19.
Funds from operations (FFO) was down 3.6% to $124.6 million, from $129.2 million in FY19. FFO per security fell 13% to 19.38 cents from 22.28 cents in FY19. Distribution per security (DPS) was flat at 18.50 cents.
Managing director Steven Sewell said in light of COVID-19 the emphasis of the group is now on sustainable, active asset and development management of its investments.
The office and self storage operating performance solid, especially in COVID-19 context.
Commercial portfolio contributed FFO of $70.2 million from a portfolio valued at $1.7 billion. Active leasing and asset management delivered like for like office rental growth of 2.3%.
But fourth quarter rent collection was impacted by COVID-19. The office portfolio was resilient with 90% of Q4 rents collected and $1.7 million of waivers provided, and retail also impacted with 49% of Q4 rents collected and $0.7 million of waivers provided.
The $1.2 billion self storage portfolio FFO contributed $60.2 million. Despite being impacted by the COVID-19 pandemic, RevPAM was flat across the self storage established portfolio over FY20, driven by quality of locations and operating platform strength.
Independent valuations were conducted over 54% of commercial investment properties and 62% of self storage facilities during the year, resulting in a net decrease in investment property values of $41 million. The self storage portfolio recorded a gain of $28 million or 2.8%, while the commercial portfolio recorded a loss of $69 million or 4.1%.
“Following the successful execution of a strategic repositioning, Abacus is now a strong asset backed, owner and manager with a focus on the office and self storage sectors.
“Acknowledging the uncertainty caused by the COVID-19 pandemic, Abacus remains positive on its differentiated AREIT positioning in the office and self storage sectors. We expect active asset and development management together with responsive customer communication will deliver attractive risk adjusted returns for our stakeholders over the medium to long term,”
“With 87% of total assets now deployed in office and self storage investments, the size, nature and market positioning of these key sector investments will permit the group to deliver recurring income and value creation.
“Given the prevailing market conditions, the Abacus board expects that the distribution for FY21 will reflect a payout ratio of between 85 – 95% of FFO.” Sewell concluded.
