This dividend share now provides a massive 7.3% yield

In afternoon trade the Aventus Retail Property Fund (ASX: AVN) share price has edged 0.5% lower to $2.23 following the release of the big-box retail site operator’s full-year results.

For the 12 months ended June 30, Aventus delivered a 2.3% increase in funds from operations (FFO) to $89 million or 18.1 cents per unit. This was in line with the guidance given at its half-year results.

A key driver of this growth was once again the high occupancy levels achieved by its property portfolio. The company finished the year with an occupancy level of 98.7% and a stable weighted average lease expiry of 4.1 years.

This was supported by continued tenant remixing with leases negotiated achieving low incentives and positive leasing spreads. Like-for-like net property income rose 3.3%.

The solid performance allowed the board to increase its distribution to 16.3 cents per unit, up 2.4% on the prior corresponding period. This means that Aventus’ shares offer investors an incredibly generous distribution yield of 7.3%.

Finally, net property valuation uplifts of $78 million were achieved for the portfolio during the 12 months, bringing the value of its portfolio to $1.9 billion.


FY 2019 looks likely to be a reasonably flat year, which may explain why its shares have come under a little bit of selling pressure today.

CEO Darren Holland has provided FFO per unit guidance of 18.2 cents. However, this could increase to 18.4 cents per unit if unitholders approve a proposal to internalise its management functions.

On September 25 unitholders will be able to vote on whether the company buys out external management entity, APG, for $143 million in order to internalise management.

The board expects that internalising management will lead to 1.1% FFO accretion, 4% adjusted FFO accretion, and 6% value accretion.

Should you invest?

I think that Aventus is a great option for income investors. It may not be the most exciting share on the market, but I believe its stable business and generous dividend make it attractive.

In light of this, I would put it up there with National Storage REIT (ASX: NSR) and Shopping Centres Australasia Property Group (ASX: SCP) as top income shares to buy this month. Incidentally, Shopping Centres Property also released its results earlier this week. More on that here.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Shopping Centres Australasia Property Group. The Motley Fool Australia has recommended AVENTUS RE UNIT and National Storage REIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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