Seven minutes after posting a $23 million profit for the HY22, Aspen Group announced it was proposing to buy the master planned community Coorang Quays, with about 3,000 homes/sites, at Hindmarsh Island, 83km south of Adelaide, SA.

Aspen Group, owned by John Carter and David Dixon, is proposing to merge with a private company Marina Hindmarsh Island Fund, which Aspen has managed since early 2019.

Marina Hindmarsh Island Fund owns and operates the $25 million Coorang Quays, which has residential, retirement (land lease) and park sections. It has 1,842 sites (90% occupied and providing income) and another 1,098 sites in the development pipeline including 132 land lease homes.

Coorang Quays includes Alexandrina Cove Lifestyle Village (pictured), which has approval for 160 sites in total (28 developed). Aspen Group said it expects to sell at least six sites per year at an average price of $350,000 with land rent of $160 per week. In addition, Aspen said it is considering building land lease homes in the 200-site park community.

Aspen, whose core customer can pay no more than $400 per week in rent and no more than $400,000 in purchase price, reported to the ASX an increase in profit of 259.5% before tax for the HY22. The profit before tax was $23,059 million, compared to $6,367 million 12 months earlier.

It has increased its total dwellings/sites by 31% over the six months to a total of 3,605. The average weekly rent is $260 and it said the demand for $300 weekly rent in metropolitan locations is “very strong”.

Aspen said it is “well positioned to grow Underlying Earnings and/or Net Asset Value per security over the medium term by at least 10% per annum.

“Land development pipeline has increased six-fold over the past 18 months at attractive entry prices, particularly land lease communities development profits on house sales plus NAV (Net Asset Value uplift from leasing the land sites.”

Aspen Group has fallen 5.17% on the ASX in the year to date (as of yesterday afternoon).