Aspen Group (ASX: APZ), a property group focused on affordable accommodation and residential communities, has announced an upgrade to its FY26 pre-tax underlying earnings guidance. The company expects earnings of 20.1 cents per security, a 20% increase on the FY25 result and 6% above initial guidance. This revision reflects the continued strong momentum across Aspen Group’s operations, driven by robust rental income and development profits.
The upgrade is underpinned by increasingly acute housing shortages across Australia. Aspen notes that national rental listings are approximately 25% below average, with rental vacancy rates dropping to a record low of 1.5%. The company believes that the opportunities for Aspen are substantial within Australia’s $11 trillion housing market, particularly at the more affordable end. Rental revenue for 1Q FY26 increased by 15% to $19.7 million, with net rental income (NRI) up 26% to $10.9 million.
Development activity also contributed significantly to the improved outlook. There were 30 settlements in 1Q FY26, a 25% increase compared to the prior corresponding period, all of which were Lifestyle houses. FY26 year-to-date settlements and contracts on hand total 112, surpassing total settlements for all of FY25. Development profit increased 24% to $4.0 million with an average profit margin of $135k per house, or 31%.
Aspen also announced that it has entered into contracts to acquire a large strata-titled commercial component of 99-115 Flinders Street Surry Hills NSW, near its current leased premises, for its new Sydney headquarters. The company anticipates an effective tax rate range of 0-5% of the Group’s total pre-tax Underlying Earnings in FY26. A further update will be provided at Aspen’s Annual General Meeting on 20 November 2025.
