“Big furniture and whitegood items are emotional purchases where customers still prefer to touch and feel.
“Customers research online but the come into the stores to make the final purchase.”
For the six months ending December 31, the group reported a 10.8 per cent lift in funds from operations, the most accurate measure for real estate investment trust, to $52.5 million and the like-for-like growth of 3.1 per cent in net operating income (NOI).
Aventus floated in mid-2015 and has 38 per cent of its portfolio exposed to what is termed, “everyday needs”, being Coles supermarkets, pet stores, food and fitness centres. The remainder is split between homewares, hardware, appliances and electrical, such as JB HI-FI and furniture.
The average Aventus centre is now valued at more than $100 million, which is a 55 per cent increase since listing, with around 27,000 square metres of area and over 30 tenants per centre, across 20 centres in Melbourne.
The highest growth in the reporting period has been at its Marsden Park and Tuggerah centres in Sydney and Cranbourne in Melbourne. It has a large land bank for expansion in and around its centres.
Large format is also attractive as it offers rents at about $317 per sq m compared to larger general shopping centre rents of closer to $10,000 per sq m.
Its main competitor is the newly-listed Home Consortium, although its centres are much smaller.
Darren Leung, an analyst at Macquarie Equities said while like-for-like NOI moderated slightly, the income stream of the vehicle remains solid.
“The stock is supported by a tenant base that should benefit from an improving residential cycle and an upside from the funds management business,” Mr Leung said.
During the half Aventus forged into the funds management sector with the creation of the Aventus property Syndicate, or APS 1.
“The purpose of this transaction was to recycle capital and to diversify our income, and Aventus retained a 25 per cent interest in the centre, and we gained a new income stream in the form of external management fees, Mr Holland said.
Aventus reported an interim distribution of 8.5¢. The securities were up 0.7 per cent to $2.89.