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.
Outlook.
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.
