Big box Aventus centres defy the downturn
Aventus Group has notched up the best rent collection rate during the pandemic for retail landlords so far with its portfolio of homemaker centres retaining their appeal for shoppers.
Through the height of the coronavirus-caused disruption, from the start of March until the end of June, Aventus collected 87 per cent of billed rent.
Rent relief totalled around $6 million, through a combination of deferral and abatements. That represents less than 4 per cent of the Aventus’ property income for the 2020 fiscal year.
During the course of July, it has collected around 84 per cent of rent billed.
Chief executive Darren Holland, who co-founded the property platform with Brett Blundy, its largest shareholder, said the focus of the $2.1 billion portfolio’s 20 large-format centres made them more resilient than typical shopping malls.
“Australians are spending more time at home than they ever have,” he told The Australian Financial Review.
“They are entertaining, they are learning and they are working from home more so than ever before, so the uptick and the sales growth in household goods in the last three months has been unprecedented.
“Our retailers are a beneficiary of that.”
The ban on international travel had also helped divert spending into households during the pandemic, Mr Holland said. Another factor contributing to Aventus centres’ resilience was that most of its tenants had large store footprints, while the centres mostly did not include internal arcades.
“Social distancing is easy in an Aventus centre. We don’t have tight, busy malls,” he said.
Aventus funds from operations – the preferred earnings measure in the property sector – rose 4.2 per cent to $100 million. Statutory profit fell 48.6 per cent to $53.7 million, taking into account write-downs in the value of its property portfolio.
In other highlights, foot traffic in Aventus malls, excluding Victoria, has increased 9 per cent or more above pre-COVID-19 levels across the portfolio over the three months from June. Except for Victoria, all Aventus’ retailers are open.
“Operating metrics have held up well relative to peers, with the best retail cash collection to date (87 per cent) and minimal exposure to Victoria (16 per cent),” Macquarie analysts wrote in a client note.
Re-leasing spreads on new lease agreements, including deals done during the pandemic, were positive overall while incentives came in at less than 5 per cent, a relatively strong result for the sector.
“It’s rare in this environment,” Mr Holland said. “It goes to the affordability and sustainability of large-format rents.”
