This article is from the Australian Property Journal archive
HOME Consortium has added a trio of medical and healthcare assets on the eastern seaboard, taking seed assets for its HealthCo fund for $480 million as it moves towards spinning off a new healthcare real estate investment trust and an unlisted healthcare property fund.
HealthCo expects to list in the second half of this year and has a further $300 million of additional assets under due diligence. HOME Consortium (HomeCo) last month doubled its targeted initial equity raising for the spin-off to $1 billion across both the listed and unlisted funds.
Among its new acquisitions are Health Hub Morayfield for $110 million, which is said “provides HealthCo with a significant and recently developed integrated healthcare ecosystem asset in one of Australia’s fastest growing regions”. It was acquired on a capitalisation rate of 5.40% and includes a GP clinic, pharmacy, radiology and other allied health services, in addition to childcare services.
It has also secured $23.2 million of childcare centres that will be warehoused on balance sheet prior to the proposed establishment of an ASX-listed and unlisted fund later this calendar year.
Those centres are include a Busy Bees facility in the inner Brisbane suburb of Woolloongabba, bought for $13.0 million and on a capitalisation rate of 5.50%, and in Sydney’s Five Dock, leased to G8 Education-owned Greenwood and acquired for $10.2 million, on a cap rate of 5.50%.
Home Consortium (HomeCo)’s offloaded a non-core large format retail centre, also in Morayfield, for $28.4 million. The sale price was 3.5% above 31 December book value, reflecting the heightened popularity of the large format sector. It follows the recent sale of an LFR property in Bathurst for $17.0 million.
It the asset recycling initiatives are “consistent with strategy to transition to a capital light fund manager with scalable platforms for growth”.
Following the transactions and the recent large format asset sales of $266.4 million to its Daily Needs REIT, HomeCo’s directly owned portfolio of large format assets will decrease to $154.6 million.
“HomeCo will continue to actively manage its remaining LFR assets held on balance sheet and will continue evaluating asset recycling opportunities, including sale to HDN or sale to third parties, to deliver optimum long term securityholder returns,” it said.
HomeCo managing director and chief executive officer, David Di Pilla said the group remains on track to establish HealthCo later this year.
“Pleasingly, we continue to execute our strategy in a capital efficient manner through active capital recycling. Our balance sheet is well capitalised with minimal debt, providing us with significant capacity to secure additional assets for HealthCo including several which are currently under due diligence.”
HomeCo maintains its targeted 10% to 15% investment over the long-term in HealthCo and will contribute $250 million of stabilised seed assets – $350 million on an as-complete basis – currently held on HomeCo’s balance sheet.
HomeCo reaffirmed its full year funds from operations guidance of no less than $35.0 million, or 12.9c per security, and its FY21 dividend guidance of 12.0c per security.
