The Hot & Steamy Battle of Storage

Self-storage may not scream “drama,” but right now, it's the setting for a corporate showdown that has all the ingredients of a Netflix docu-drama - billionaires, boardroom power moves, and an $80 billion American gorilla muscling into the Australian market. No, seriously - this is all quietly happening in the storage world.

Let’s set the scene. Abacus Storage King, one of the big boys. Australia’s second-largest self-storage company, is suddenly the belle of the storage ball. With 126 owned locations and another 75 licensed or managed, it's not just full of boxes and forgotten "loved" items - it’s a $2.3 billion property player. Yet, for all its assets, the company has been trading at a 28% discount to its net asset value. What? Enter: the opportunists.

On one side, we have Nathan Kirsh, a 93-year-old billionaire who’s quietly been involved in Storage King for over a decade through his investment vehicle Ki Corporation. Still sharp as a tack & a keen businessman (one to be admired), Kirsh has teamed up with Public Storage, the largest self-storage operator in the U.S., which comes swaggering in with $80 billion in assets and the subtlety of, well, a gorilla in the storage facility world.

Together, they’ve made a move to privatize Abacus Storage King, offering shareholders $1.47 a share, a 26.7% premium on the last trade, but still about 8% short of the company's actual asset value. So basically: “We like your people's stuff & buildings, but not quite that much.”

Cue the storage drama... its getting exciting..

National Storage REIT another major big boy player in Australia’s storage scene, has entered the chat, quietly scooping up a 5.1% stake in Abacus Storage King - just for fun. Not to be outdone, it’s like they pulled up a lawn chair, popcorn in hand, just close enough to make everyone nervous with their next moves.

Now, Abacus Storage King’s board has formed an independent committee to assess the bid (read: decide if this is a good deal for everyone or just a lowball offer in a shiny wrapper that would make Christmas look boring). And it’s a tricky one, because Kirsh is already a major shareholder in the mix.

So essentially, the person making the offer is also kind of sitting on both sides of the table - like playing Monopoly and being the banker. Thought it was just supermarkets? Oh how you were wrong.. The monopoly of storage is real and growing.

Beyond the money and maneuvering, this is a classic story of undervalued assets, global capital, and a sector most of us only think about when we’re moving house, going through a crisis or trauma, travelling and many other needed moments within life that a storage unit is needed - ALOT less than what you would think.

But don’t be fooled, self-storage is hot property - its cool. Nearly 1 in 10 of Aussie adults use storage units these days, and with more than 2,000 facilities nationwide (and growing), the industry is booming. Investors have finally realized these big beige boxes are actually real estate gold mines.

So, will Storage King bow to the billionaires and the big gorilla? Will National Storage crash the storage party with a bigger offer? Or will the board hold firm and demand full value for their self-storage empire that has been carefully crafted and built?

Stay tuned. Because the Battle of the Boxes just got serious. And in the world of self-storage, there’s no room for weak or tight offers - just like there’s no room left in your garage.