ABP has been a weak performer in this portfolio with returns underwhelming us to date. While the stock remains undervalued relative to its assets, there are plenty of property stocks listed that fall into this category and we need to be focussing our efforts in the areas that we believe will have the best returns from here. Abacus (ABP) has a strategy of acquiring high quality self-storage assets and after having raised capital, has room to spend around $600m before gearing reaches 30%, however finding opportunities to deploy this capital seems to be tough going. This lack of investment is prompting MM to think about our holding with the view of switching it to Dexus Property Group (DXS), a stock we’ve covered in recent notes (and included below). Valuations are up on self-storage assets and ABP are left with too much powder unspent here. We believe DXS has more upside than ABP.
MM is considering cutting Abacus (ABP) for the loss with the view of switching into Dexus (DXS).
Add To Hit List
