Listed property manager Abacus Property Group (ASX:ABP) is advancing plans to spin-off a $3 billion storage portfolio and has flagged its growth ambitions in the sector. The move is one of the first major raisings in the listed Australian Real Estate investment trust sector this year. The once capital hungry sector has been hammered by falling values in traditional asset classes, with both offices and shopping centres hit.

But investors are clamouring for exposure to sectors like storage, which are seen as able to weather the storm from an economic slowdown and have exposure to the e-commerce boom. The trust will be spun out of Abacus, which assembled the Storage King portfolio and it will be run as an external vehicle, with the capacity to grow. Abacus also disclosed it had sold a series of buildings in Brisbane and Melbourne, which it deemed non-core as it prepares for the float that will leave it as a fund manager and owner of passive office assets.

Abacus has kicked off an institutional investor engagement process in relation to the spin-off of the storage assets, which will create an ASX-listed REIT to be known as Abacus Storage King. Selling the buildings has meant there is a reduced requirement for capital to set gearing levels in Abacus and the storage trust, relative to what the company had previously planned. The new trust intends to raise about $225m of new equity if the proposal proceeds.

Abacus has appointed Barrenjoey and Morgan Stanley as advisers. Abacus is selling the three non-core commercial assets for a total of about $97.9m. The assets include 33 Queen St, Brisbane, 247 Adelaide St, and 187 Todd Rd in Port Melbourne.

Abacus MD Steven Sewell said the sales "reflect Abacus's ability to identify opportunities to optimise its investment portfolio and transact in a market -environment challenged by relatively low transaction volumes in the office sector". A decision to proceed with the proposed de-stapling and -equity raising remains subject to market conditions, the approval of the Abacus board, an independent expert opinion that the -de-stapling is fair and reasonable to shareholders, and a vote.