This article is from the Australian Property Journal archive
ALTERNATIVE asset specialist Home Consortium (HMC) is bullish about reaching $10 billion funds under management by 2024 as it upgraded its full-year guidance.
HomeCo is now expecting full-year FFO to be at least 29.0c per security, up from the previous guidance of 26.0c, and marking a 121% increase FY21. It has been selling down its properties as it reinvents itself as a fund manager.
It reaffirmed full-year distributions of 12.0c with and interim distribution of 6.0c.
Managing director and CEO David Di Pilla said the first half was “another transformational period” for the group with about $3.5 billion of gross transactions, including the acquisition of Brett Blundy’s Aventus Group by the HomeCo Daily Needs REIT (HDN), and the listing of HealthCo Healthcare and Wellness REIT (HCW).
The merger of HDN and Aventus has created a $4.4 billion portfolio of large format and convenience retail centres.
“These highly strategic transactions will generate significant long-term value for shareholders and further demonstrate HMC’s ability to originate and execute large-scale transactions. Our ambition is to be Australia’s leading diversified alternative asset manager,” Di Pilla said.
“HMC is well capitalised with low gearing and has significant liquidity to support our growth ambitions. We are well positioned to grow assets under management to over $10 billion by 2024.”
HomeCo was formed in 2016 from the $725 million purchase of warehouses left empty by the collapse of hardware chain Masters. It listed on the ASX late in 2019 and spun out HDN a year later.
External assets under management grew 280% to $5.2 billion during the first half, driven by $2.9 billion of net acquisitions, $700 million from the float of HCW and net revaluation gains of $400 million.
HomeCo owns $157 million of direct property investments, including $137 million of large format retail assets and a $20 million joint venture interest in Camden stages 1-3.
First half FFO grew 51% on the prior corresponding period to $31.9 million or 11.0 cps, and a pre-tax profit of $78.3 million was posted.
The next phase of growth for HomeCo will include the establishment of HomeCo Capital Partners Platform.
“The outlook for higher interest rates and inflation is driving increased market volatility and a repricing of risk assets in both Australia and globally. The proposed establishment of HMC Capital Partners later this financial year will provide another growth platform and source of capital to take advantage of increased market volatility and target unique high conviction investment opportunities,” Di Pilla said.
