This article is from the Australian Property Journal archive
HOME Consortium (HomeCo)’s spin-off Daily Needs Trust has made $322 million in retail asset purchases, including a portfolio of seven large format centres from its parent and a town centre near Geelong, Victoria, and has launched a $265 million entitlement offer to partially fund the acquisitions.
Four of the assets are located in Queensland, including Gold Coast centres in Upper Coomera and Bundall, and in Mackay and Toowoomba. A pair of assets are located in Melbourne’s Box Hill and South Morang, and in Sydney’s Marsden Park.
Among the anchors of multiple centres are Nick Scali, Amart, Anaconda, Spotlight and Goodlife.
The $266.4 million portfolio transaction between HomeCo and is recently listed trust is in line with the portfolio book value as at 31 December and a 6% discount to 30 June 2021 independent valuations of $283.72 million. The trust’s unitholder approval will be required at an extraordinary general meeting that is expected to be held in June.
Separately, Daily Trust Needs REIT will separately acquire acquiring Armstrong Creek Town Centre for $55.6 million, representing a 6.0% cap rate. The recently-completed neighbourhood centre opened for trade in September and is anchored by the only full-line Coles supermarket of its primary trade area, within the growing Geelong region, south west of Melbourne.
Daily Needs REIT will be undertaking a $265 million underwritten accelerated non-renounceable 1 for 2.36 entitlement offer at an issue price of $1.295 per unit.
HomeCo has committed to fully take up its entitlement for its 26.6% co-investment in Daily Needs REIT and Home Consortium Developments Limited (HCDL), an entity within the HomeCo stapled group, has committed to sub-underwrite $26.7 million (approximately 10% of the entitlement offer) of the retail component of the entitlement offer.
HomeCo’s managing director and CEO, David Di Pilla, said the sale of the large format portfolio continued “HMC’s transition towards a capital light fund manager with significant financial capacity to accretively recycle capital and grow funds under management to over $5 billion in the medium-term.”
The transaction increases HomeCo’s externally managed assets under management to $1.348 billion, an increase of 38% versus pre-transaction and 60% since the IPO OF Daily Needs REIT in November.
HomeCo will receive net proceeds of $198 million as a result of the deal and its gearing of 13.6% will be wiped.
HomeCo reaffirmed its full year funds from operations guidance of no less than $35.0 million, at 12.9 cents per security, and dividend guidance of 12.0 cents per security.
