This article is from the Australian Property Journal archive
NEW kid on the block, HomeCo Daily Needs REIT has entered into a binding contract to acquire Marsden Park Shopping Centre.
The Coles-anchored metro Queensland convenience asset was purchased for $48 million, representing a 6.7% cap rate. With the acquisition being fully debt funded.
This acquisition comes after the continued resilience of convenience-based retail amidst a turbulent retail market, in large part due to the COVID-19 global pandemic.
With neighbourhood convenience and essential services-based shopping centres, particularly in the sub $100 million market, in high demand thanks to the security and long term returns they provide.
With a weighted average lease expiry of 8 years and 14% site coverage on the 5.8-hectare land holding, the acquisition also boasts 530 car spaces and a tenant mix of 53% non-specialty neighbourhood tenants, 25% specialty neighbourhood tenants and 22% health and services tenants.
HomeCo Daily Needs REIT has seen a 19% like-for-like increase in foot traffic compared to previous corresponding period.
Amongst anchor sales, Woolworths and Coles supermarket comparable sales growth across the Daily Needs REIT portfolio in the first quarter of 37%, driven by relatively new asset portfolio with metro skew.
Unadjusted cash collection of contracted rent is improving after 96% unadjusted cash collection in October, with November 2020 currently at 93.6% but on track to collect in the range of 98%-99%.
Daily Needs REIT debt facility is on track to be upsized from $400 million to $500 million, with liquidity of $215 million to execute on developments and further acquisitions, post-acquisition.
The result of this fully debt funded acquisition will be a FY21 forecast FFO accretion of 4.5% and gearing post-transaction of 30.8%, compared to the current gearing of 26.2%.
The trust debut on the ASX yesterday after Home Consortium raised $325 million last month. Daily Needs REIT shares closed at $1.34.
