Abacus Property Group (ABP) this month reported a solid result boasting a 58% increase in profit and is anticipating around a 6.6% yield for FY07. The only broker in the FNArena database to cover Abacus – Macquarie – rates the group as Outperform.
Abacus Property and Charter Hall ((CHC)) have acquired a 19.9% strategic interest in Australian Unity Office Fund ((AOF)) for $95.6m, equivalent to $2.95 per unit. Australian Unity Office has since released a notice to ASX stating it has received an unsolicited takeover proposal.
The broker initiates coverage of Abacus Property with an Outperform rating, believing the investment fundamentals are becoming more attractive as the business transitions away from being a real estate trader towards acquiring assets offering recurring revenues, specifically self-storage, which the broker sees as continuing to grow strongly.
Citi analysts have used a general sector update on AREITs to express their scepticism about why retail AREITs have rallied. Their preference is with those who offer exposure to office, industrial and funds management.
Abacus confirms the City of Sydney is conducting due diligence ahead of a possible purchase of a CBD building which Abacus bought a year ago for $55m, the broker notes. The press suggests a price of $75-78m.