Fund Manager Summary on Aspen Group Ltd (ASX:APZ)
In January 2026, Airlie Funds Management commented that Aspen Group Ltd (ASX:APZ) has been the best performer in its portfolio and remains compelling because it operates a capital‑efficient affordable housing platform that acquires land cheaply and has delivered strong historical returns. Across recent fund manager commentary there is a clear consensus that Aspen’s dual development and land‑lease operating model is well positioned to exploit structural tailwinds—the housing affordability squeeze, record low vacancy and a growing over‑65 cohort—with development margins reported around 30% and land‑lease returns roughly 6% on land cost; managers highlight a substantial approved pipeline (circa 1,100 sites) and a string of opportunistic, value‑accretive acquisitions (eg Bunbury, Wallaroo, Australind) plus a $70m equity raise that has materially lowered gearing and increased acquisition flexibility. Actionable insights for investors include monitoring Aspen’s ability to recycle development profits into new low‑cost land, the pace of settlements and pipeline conversion that drive near‑term earnings, and the company’s disciplined focus on ROIC when assessing future acquisitions; potential upside catalysts noted by managers include latent value in the growing land‑lease business and possible index inclusion that could boost passive demand. Key risks flagged are exposure to higher interest rates and rising construction and labour costs, dependence by some tenants on government rent assistance and any policy changes, execution and approval timing for masterplan communities (income often several years out), increased competition for land pushing up entry prices, and founder‑led succession risk. Overall fund managers weigh recent operational evidence and balance‑sheet strengthening more heavily and view Aspen as a scalable, capital‑efficient operator with identifiable growth levers—but recommend close attention to funding costs, execution of the development pipeline and any material policy or macro shifts that would compress margins or slow sales velocity.
Commentary From The Managers
There are 14 insights from 6 fund managers regarding their investment in Aspen Group Ltd (ASX:APZ) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Airlie Funds Management
16 Jan 2026
$5.73
Summary
- Airlie Funds Management believes Aspen's outlook is compelling and continues to hold because it is the portfolio's best performer, has delivered strong upside since purchase, and operates a scalable model for affordable rental housing.
- Performance: Aspen is up nearly 1.5x since we bought it and has been the portfolio's top performer this year.
- Business model: A platform to deliver affordable rental accommodation across Australia focused on scale and predictable demand.
- Target price point: Aimed at roughly $400 per week rent or about $400,000 for an outright sale to capture the affordable housing segment.
- Return profile: Demonstrated history of generating 20%+ returns on capital.
- Land strategy: Focus on acquiring land very cheaply to boost returns and margins.
- Bunbury example: Purchased a workers’ camp that cost $100m to build for $32m (~30 cents on the dollar), illustrating the land-value-led opportunity.
- Time horizon: Management sees a compelling runway of five, and potentially ten, years of growth and value creation.
Milford Asset Management
13 Jan 2026
$5.72
Summary
- Milford Asset Management believes Aspen Group offers defensive, affordable housing exposure and continues to hold because its disciplined strategy, aligned management and conservative balance sheet support steady, long‑term returns.
- Market need: Focused on the ~40% of Australians requiring homes under $400/week or $400,000 purchase price, providing durable demand even in softer economic conditions.
- Asset scale: Owns ~6,000 approved dwellings and land sites with a book value of ~AU$650m, plus land lease communities and park accommodation for income diversification.
- Income profile: Targets ~5% net rental yield, with high occupancy and low arrears; average rent ~$325/week (FY25), below market comps and with inflation‑linked growth room.
- Simple, repeatable strategy: Buy under‑rented/overlooked assets at attractive prices; modestly refurbish to lift appeal; operate for steady income; recycle capital by selling when yields compress and reinvesting into higher‑return opportunities.
- Capital recycling track record: Historically sells lower‑yielding assets to fund opportunities targeting 7–8% returns, a key long‑term value driver.
- Conservative development: ~80% of earnings from recurring rent; development business is modestly sized, supported by a large land bank, with average development profit margins ~32% and average ROIC ~20% over five years.
- Balance sheet strength: Low gearing and capacity to fund growth, reducing downside risk and supporting disciplined acquisition and development activity.
- Management alignment: Co‑CEOs John Carter and David Dixon own ~7% of stock and have >50% of pay linked to book value/stock performance, reinforcing prudent capital allocation.
- Key risks Milford Asset Management flags: succession risk in a founder‑led business; exposure to housing cycles, interest rates, construction costs and labour; potential policy risk where some tenants rely on government rental assistance.
- Macro context: Critical shortage of affordable housing and a less supportive interest rate outlook (upside risk in 2026) increase the attractiveness of Aspen’s defensive, affordable market position while also raising vigilance on rate sensitivity.
- Overall view: Milford Asset Management sees Aspen’s combination of market position, disciplined capital recycling, conservative balance sheet and aligned management as the core reasons to maintain a holding for long‑term, income‑oriented exposure to affordable residential property.
Perpetual Asset Management
31 Oct 2025
$5.28
Summary
- Aspen Group’s strong performance in October (+12.82%) reflects positive market sentiment.
- Acquisition of a greenfield master plan community site in Wallaroo, South Australia, secured at an attractive entry price.
- This acquisition represents a strategic expansion into a coastal location with significant council infrastructure investment.
- The development plan includes land lease sites, build-to-rent dwellings, and traditional land lots.
- Early-stage engagement from local council indicates a constructive approval pathway.
- While income generation is several years away, the transaction highlights Aspen's ability to source accretive off-market opportunities in supply-constrained regional markets.
- Post-acquisition, gearing remains conservative with a healthy pipeline of similar deals emerging.
- Aspen is executing its strategy of delivering affordable housing solutions in areas of acute undersupply.
- The company’s disciplined capital allocation and focus on scalable developments position it well for growth.
- Perpetual Asset Management continues to hold because Aspen is well-positioned to capitalize on sustained structural tailwinds in the residential accommodation sector.
Airlie Funds Management
30 Sept 2025
$4.68
Summary
- Aspen Group reported FY25 earnings that were +22% on pcp and ahead of market expectations.
- The stock has re-rated significantly since our initial purchase as the market gained greater visibility on the Company’s pipeline of affordable housing developments.
- There is greater confidence in the margins and returns that can be extracted from these developments.
- Airlie Funds Management continues to hold due to the Company’s capability to deploy capital into an underserviced part of the housing market.
Perpetual Asset Management
30 Sept 2025
$4.68
Summary
- Perpetual Asset Management notes that Aspen Group’s performance in September was strong, with a growth of 7.8%.
- Aspen acquired a greenfield master plan community site in Wallaroo, South Australia, secured at an attractive price from administration.
- This acquisition represents a strategic expansion into a coastal location with significant council infrastructure already in place.
- The development plan includes land lease sites, build-to-rent dwellings, and traditional land lots.
- Early engagement with local council suggests a constructive approval pathway for the development.
- While income generation is several years away, the transaction shows Aspen's ability to build a pipeline of rental and development assets.
- Aspen continues to source value-accretive opportunities in supply-constrained markets.
- Post-acquisition, Aspen maintains conservative gearing, positioning the company well for future execution of its strategy.
- The focus on affordable housing solutions in undersupplied areas aligns with market demand.
- Aspen’s disciplined capital allocation and emphasis on scalable developments in key growth corridors enable it to capitalize on structural tailwinds in the residential accommodation sector.
Airlie Funds Management
16 July 2025
$3.82
Summary
- Aspen Group (ASX: APZ) is a small-cap property platform addressing Australia’s housing affordability crisis and ageing population.
- The company operates in two segments: Development (building affordable homes with ~30% margins) and Operating (generating recurring income through land leases).
- Aspen is shifting towards lifestyle communities, selling homes to older Australians while retaining land ownership.
- The company acquires land and civils for around AUD 100k per site, constructs homes for AUD 280k, and sells them for AUD 400k, earning ~AUD 120k profit.
- Land is leased for ~AUD 180/week, generating net rental income of around AUD 6,200 annually, a 6% yield on land cost.
- This land-lease model allows older Australians to access affordable home-ownership without large upfront costs.
- Government support enhances this model, enabling Aspen to recycle capital efficiently and build a long-term annuity income stream.
- With rental vacancy rates at record lows, Aspen targets the bottom 40% of income earners, offering land-lease rentals under AUD 200/week.
- Government policy supports Aspen’s model, with the over-65 population projected to grow significantly by 2030.
- The management team, led by Joint CEOs David Dixon and John Carter, holds around 10% ownership, aligning interests with shareholders.
- Aspen has achieved ~20% compound annual growth in NAV and EPS, with underlying EPS up 15% in FY24 and forecast to grow 21% in FY25.
- The company has an approved pipeline of around 1,100 sites and aims for 140 settlements in FY26 and 170 in FY27.
- Trading at roughly 20× FY26 earnings with forecast mid-teens earnings growth, Aspen is viewed as scalable and capital-efficient.
- Jack McNally (on behalf of Airlie Funds Management) believes Aspen’s model effectively addresses affordability issues while delivering strong investment returns.
Airlie Funds Management
30 June 2025
$3.95
Summary
- Aspen Group (APZ.ASX) is a small-cap real estate platform addressing the housing affordability crisis and the ageing population in Australia.
- The business operates in two segments: Development (earning ~30% margins) and Operating (generating recurring rental income).
- Aspen has shifted focus towards lifestyle communities, responding to growing demand and contributing a rising share of profits.
- The land lease model allows Aspen to sell homes while retaining land ownership, generating stable rental income.
- Aspen's management, led by David Dixon and John Carter, is highly experienced and aligned with shareholders, holding almost 10% of the company.
- Aspen initiated a position at ~$2.50, viewing it as a multi-year opportunity with ~20% CAGR in NAV and underlying EPS.
- The land lease model separates dwelling ownership from land ownership, making it attractive for older Australians.
- With low rental vacancy rates and rising rents, Aspen's typical product rents for under $200 per week, significantly lower than market rates.
- Aspen targets the bottom 40% of income earners, aligning with government efforts to address low-cost housing undersupply.
- The population over 65 is projected to grow, increasing demand for affordable, low-maintenance housing.
- Aspen's management has a history of disciplined execution, with ~20% annual growth in earnings per share over the past five years.
- Current pipeline includes 1,100 approved sites, with plans to double this and significant settlement targets for FY26 and FY27.
- Aspen trades on 20x FY26 earnings, with expected midteens earnings growth in the medium term.
- In May, Airlie Funds Management toured Aspen’s communities, including Sierra, Australind, and Meadowbrooke, showcasing their revitalization efforts.
Firetrail Investments
30 June 2025
$3.95
Summary
- Firetrail Investments continues to hold its position in Aspen Group Ltd.
- Aspen rallied after raising $70 million in May to strengthen its balance sheet.
- The funds will assist Aspen in pursuing both organic growth and acquisitions.
- Aspen entered exclusive due diligence on a $20 million Adelaide metro portfolio, expected to boost earnings.
- This acquisition is anticipated to support future growth.
- Gearing is set to fall from 27% to 17%, providing the company with more financial flexibility.
- Management reaffirmed its target of 10% annual EPS growth, indicating confidence in Aspen’s scalable model.
Perpetual Asset Management
30 June 2025
$3.95
Summary
- Aspen Group delivered a strong return over the quarter (+43.4%).
- Investors responded positively to the company’s clear strategic direction.
- Aspen is exposed to Australia’s pressing structural theme: housing affordability.
- The portfolio includes lifestyle and residential communities offering dwellings below the national median.
- Site rents are well beneath government support thresholds, enhancing social relevance and economic resilience.
- Aspen completed a $70 million institutional placement and raised an additional $18 million via an oversubscribed Security Purchase Plan.
- Proceeds are aimed at strengthening the balance sheet and funding selective acquisitions.
- A flagged $20 million portfolio acquisition in Adelaide is planned.
- The strength of investor demand reflects confidence in Aspen’s scalable business model and disciplined capital deployment.
- With ongoing rental inflation, low vacancy rates, and constrained affordable housing supply, Aspen is well positioned to grow earnings.
- Aspen delivers a defensive income stream supported by long-term demographic and economic tailwinds.
Milford Asset Management
30 June 2025
$3.95
Summary
- Milford Asset Management notes a strong performance from Aspen Group, which increased by 16.9% following a successful equity raise.
- Aspen Group is recognized as a leading provider of quality affordable accommodation for the 40% of Australians with a household income under $100k per annum.
- The company is involved in the ownership, development, and operation of various types of communities, including residential, retirement, and holiday parks across Australia.
- Milford Asset Management continues to hold its position in Aspen Group due to these strong fundamentals and growth potential.
Cooper Investors
30 June 2025
$3.95
Summary
- Cooper Investors continues to hold Aspen Group (APZ) due to its strong performance and value potential.
- Last year, they "high graded" affordable housing exposure by transitioning from Eureka Group to Aspen Group.
- Aspen has shown multiple earnings upgrades and has made value accretive acquisitions.
- The stock was initially underappreciated, presenting a significant opportunity for growth.
- There is latent value in Aspen’s rapidly growing land lease business, which remains largely unnoticed.
- The company has strategically assembled its land bank, enabling it to offer affordable price points for quality products.
- This affordability leads to high sales velocity, minimal capital tie-up, and strong returns.
- Aspen’s ability to deploy capital opportunistically is expected to create significant value over time.
- Recent projects, like the rejuvenation of a derelict Perth apartment block, have yielded returns exceeding 50%.
- Aspen’s acquisition of a lithium producer’s workers’ accommodation asset was made at a significant discount to its original capital investment.
- The depreciation schedule of the asset aligns closely with the purchase price, providing a tax shield.
- Despite the dominance of large capitalisation stocks, smaller companies like Aspen can benefit from this dynamic.
- Both Aspen and Regis are poised for potential index inclusion in the next 6–12 months, which could enhance their market performance.
Oracle Advisory Group
31 Mar 2025
$2.79
Summary
- Aspen Group Ltd focuses on "value for money" accommodation under a build to rent model.
- The company operates under the radar, steadily enhancing its strengths.
- Management emphasizes return on invested capital (ROIC) for each project to deliver strong returns for shareholders.
- Post the quarter balance date, Aspen made a significant acquisition of a budget-housing community in W.A, which is expected to benefit investors long-term.
- Aspen and Ingenia are positioned well to tap into a demographic sweet spot: budget-conscious buyers and renters.
- There is a lack of supply in this demographic, making Aspen well-positioned to capitalize on this trend throughout the decade.
- Housing supply issues are not resolved quickly, leading to above-average returns in this sector for the foreseeable future.
Oracle Advisory Group
31 Dec 2024
$2.46
Summary
- Oracle Advisory Group has updated their investment thesis on Aspen Group Ltd (APZ).
- Aspen is a property company outside of the ASX REIT index.
- The company has demonstrated strong historical growth and a promising outlook.
- Aspen’s focus on Return on Invested Capital (ROIC) enhances its investment appeal.
- The founder-led management team is seen as a key differentiator.
- Aspen's emphasis on affordable housing positions it uniquely in the market.
- There is a strong belief that Aspen could continue to generate high returns well above its cost of capital.
- This potential is expected to create significant shareholder value.
- Aspen has shown solid performance since Oracle Advisory Group first invested in the company.
Firetrail Investments
30 Nov 2024
$2.59
Summary
- Firetrail Investments continues to hold because of Aspen Group's position as an affordable accommodation provider.
- Aspen Group has outperformed following its AGM.
- The company delivered a positive trading update and upgraded its FY 2025 guidance, projecting a +16% increase in underlying EPS compared to the previous year.
- Aspen highlighted momentum in its development business, indicating it is on track to more than double production in FY 2025, supported by stabilizing build times and construction costs.
- In its rental business, vacancies remain minimal, and the rental pool is growing at +10% pa.
- Passing rents across Aspen’s current portfolio are generally below market, which is expected to continue to underpin future growth.
- Aspen's focus on affordable housing positions it well to capitalize on the rising demand for cost-effective accommodation in Australia.
- This focus contributes to its robust performance and outlook for the coming fiscal year.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Frequently Asked Questions
Who is investing in Aspen Group Ltd (ASX:APZ)?
Fund managers including Oracle Advisory Group, Cooper Investors, Airlie Funds Management, Firetrail Investments, Milford Asset Management and Perpetual Asset Management have invested in Aspen Group Ltd (ASX:APZ).
Why do fund managers invest in Aspen Group Ltd?
Fund managers invest in Aspen Group Ltd due to its focus on affordable housing and its unique land-lease model that separates home ownership from land ownership. This strategy not only targets the budget-conscious demographic but also benefits from government rent assistance, enhancing affordability. Aspen's strong margins of around 30% on home sales, coupled with stable rental income from land leases, provide a solid risk/reward profile. Additionally, the company is well-positioned to capitalize on enduring trends in housing demand, particularly among older Australians.
What happened to Aspen Group Ltd (ASX:APZ)?
Fund managers are investing in Aspen Group Ltd due to its strong financial performance, highlighted by a 22% increase in FY25 earnings, which exceeded market expectations. The company is strategically expanding its affordable housing developments, particularly with a recent acquisition in Wallaroo, South Australia, that positions it well in a supply-constrained market. Its focus on disciplined capital allocation, conservative gearing, and scalable developments in key growth areas presents a solid opportunity to meet the ongoing demand for affordable housing.
What is the short interest in Aspen Group Ltd (ASX:APZ)?
The short interest in Aspen Group Ltd (ASX:APZ) is 1.19% which makes it the 194th most shorted stock on the ASX. Of the 227.7M shares that Aspen Group Ltd has on issue, 2.7M have been sold short.
What does Aspen Group Ltd (ASX:APZ) do?
Aspen Group Ltd. engages in property investment and development. It operates through the following segments: Residential, Retirement, Tourism and Mixed-Use, Corporate, and Other. The Residential segment consists of two lindfield apartment buildings and the Perth residential portfolio. The Retirement segment consists of three land lease communities, four Lanterns, sweetwater grove, and mandurah gardens. The Tourism and Mixed-Use segment includes parks that cater to a broad range of customers on varying lease terms. The Corporate segment caters to corporate resource clients and contractors. The Other segment includes corporate overheads and income, interest income, and interest expense. The company was founded in 1981 and is headquartered in Sydney, Australia.