Morningstar | Cut to Aveo’s FVE on Risk of Slowing Sales and Development Trajectory
Aveo is one of Australia's largest owners and developers of retirement living units, with 89 villages and around 11,000 independent-living units and serviced apartments. Most of the group's earnings are derived from deferred management fees, or DMFs, which are paid when residents depart a retirement unit or serviced apartment. Earnings upside will come from a greater volume of newly developed retirement units, which are sold to incoming residents. The rollout of the Freedom model that provides all-of-life care services will provide a boost to earnings by increasing the portfolio turnover rate and the frequency with which DMFs accrue. Negative press regarding Aveo in June 2017 has affected its reputation and the overall retirement industry. It seems likely to take a few years to recover. Aveo operates a stapled security structure, comprising a unit in the trust and a share in the management company.Aveo Group is engaged in the development for resale of land and residential, retail, commercial and industrial property, the investment in, and management of, income producing retail, commercial and industrial Property, commercial, industrial and residential building and construction for the Group, and funds and asset management. As of June 30, 2016, Co. operated in two segments: Retirement, which develops and operates retirement villages and aged care facilities to produce rental and other income; and Non-retirement, which develops residential, commercial and retail property.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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