AVJennings (ASX:AVJ), a major residential property developer across Australia and New Zealand, released its first-quarter business update for FY25 today, reporting a 29% increase in settlements compared to the prior corresponding period. In total, the company settled 122 lots valued at $50.4 million, a notable rise against Q1 FY24 figures. The growth in settlement volume — up 82% year-on-year — reflects increased land sales, though the average revenue per lot was lower due to the shift towards land rather than "built-form housing" (ie, completed residential units ready for occupancy as opposed to land-only sales).
In total, AVJennings signed 93 unconditional contracts for built-form housing valued at $34.5 million, down from 162 retail contracts signed in both Q1 FY24 and Q4 FY24. This decrease reflects both varied market conditions and a limited supply.
CEO and Managing Director Phil Kearns noted, “We are making good progress with our objective of modernising and transitioning the business through disciplined capital management, optimising our project pipeline, and leveraging our Pro9 walling system. This approach, alongside our active pursuit of capital partnering opportunities, positions us well to drive future growth and enhance shareholder value”.
The Pro9 walling system is a prefabricated construction technology developed by the Australian company Pro9, with whom AVJennings has a joint venture. The technology combines a custom-engineered, load-bearing steel frame with efficient insulation and durable sheathing, resulting in resilient walls with high fire resistance. This system is designed to achieve high energy ratings and can significantly shorten build times, enabling structures to reach "lock-up" stage in as little as seven days from the slab. The Pro9 system is generating interest within the industry and government due to its potential to help address housing shortages and climate goals.
AVJennings reported no new land acquisitions during the quarter, resulting in a reduction of total lots under control to 9,707.
The company is concentrating its efforts on stronger-performing markets such as Southeast Queensland and South Australia, while adopting a cautious approach in areas like Victoria, which is showing only early signs of recovery. In New Zealand, the company noted an improvement in market sentiment following recent cash rate cuts by the Reserve Bank of New Zealand.
