Aspen is developing and managing accommodation in 3 different sectors : residential, retirement (land lease communities) and holiday parks. Across 6 states (except Tasmania). With a large exposure to WA (42 % of the portfolio) and a small exposure to VIC (4 %) and QLD (6 %). 71 % of the portfolio is in metropolitan areas (ex. Lindfield in NSW). The largest part of their earnings* (66 % to 80 %) comes from the managing business.
Aspen is now managing over 5,100 dwellings. They claim that their target customers are the 40 % of Australian households who have an annual income of less than 90 K$. During FY 24, the average rent per week for their customers was 348 $ for residential, 217 $ for lifestyle/retirement and 333 $ for holiday parks. Regarding their development business, the average sale price achieved was 470 k$ for their lifestyle business (218 k$ for residential lot business).
For me, the most interesting valuation metrics is probably their NAV**, as it reflects the real value of their property portfolio (and not an historic one). Between June 20 and June 24, their NAV per share has increased by 89 % or + 17 % per year. There has been a rather good correlation between the share price and NAV since FY 20.
The main driver for NAV growth in FY 24 (and the previous years ?) was not the regular earnings from management and development, but the impact of property revaluation. Only 50 % of their property assets have been valued independently during FY 24 (cf annual report 24, page 48). The company's policy is to value independently every property at least every 3 years.
So this stock offers a net dividend*** yield of 3.9 %. It is also valued close to its NAV (2.39 $ per share), which is growing significantly every year.
Going forward, a potential scenario is a stability of their management business (very defensive given the average rent) and further property revaluation if interest rates continue to go down. The company estimates that a decrease of 50 bp for the cap rate would increase their investment properties assets by around 9 %.
N.B. Article below a bit old (Jan 23), but useful to understand what they do
* before net fair value gain on investment properties (significant part of their annual profit). ** breakdown of NAV : 48 % from residential, 18 % from lifestyle (retirement) and 34 % from holiday parks. *** unfranked dividend
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