Diversified property player Aspen Group Ltd says its solid balance sheet and conservative debt position has placed the group in a "sound position", despite the volatility and uncertainty prevailing in the listed property sector.
In a group business update released to the Australian Securities Exchange today, Aspen said its gearing position remained at conservative levels with total debt facilities of $219 million representing a gearing position of 35 per cent- consistent with the group's stated long term gearing range of 30 per cent to 40 per cent.
This facility is not due to expire until October 2011.
Aspen managing director Angelo Del Borrello said the combination of quality property assets and active asset management had enabled it to benefit from the firm commercial property market in key locations across Australia.
Independent revaluations were recently undertaken on three of its properties resulting in the portfolio increasing $36.6 million to $377.8 million, in line with strong leasing activity and firm market conditions.
Aspen's total debt comprises core debt of $117 million which is fully hedged against increases in interest rates for a further three years.
The additional $102 million of debt represents variable rate facilities used to fund acquisitions for the group's funds management entities, with these borrowings repaid through equity raisings for each of the underlying funds.
Mr Del Borrello said "on repayment of the $102 million facility provided to our funds, the group's gearing position would fall below its long term gearing range to 22 per cent. This provides Aspen with a significant and strong platform to pursue opportunities expected to arise from the current credit tightening and associated market volatility."
Aspen said it planned to launch new funds in the second half of FY08 under the Aspen Villages and Aspen Communities banners, following the acquisition of $62 million in seed assets over the past six to 12 months.
Aspen shares shed 9 cents or 4.5 per cent to close at $1.90 today.
