This article is from the Australian Property Journal archive
EXCLUSIVE: DAVID Di Pilla’s HMC Capital-managed HomeCo Daily Needs REIT is quietly acquiring a western Sydney mall in a deal with supermarket giant Woolworths.
Industry sources told Australian Property Journal that HomeCo will step in to acquire Plumpton Marketplace from Woolworths after Woolworths settles on its $180 million acquisition of the mall from Lendlease.
Industry sources said a confidential deal was struck between the two parties in which Woolworths would initially acquire the coveted sub regional centre, as reported last week, but HomeCo would be the eventual owner.
The confidential agreement is a win-win scenario for both parties for two big reasons. Firstly the deal will avoid any potential tax implications in regards to stamp duty related with the acquisition. At the same time, it also guarantees that Woolworths maintains its foothold in the area as rival Coles nips at its heels.
Woolworths and its discount department store Big W have been serving the area since 1994 when it originally built the centre, and its lease at Plumpton Marketplace is due to expire in 10 years with no further options.
Its rival Coles is moving in on its turf, as there is a currently DA approval for a new Coles supermarket and Kmart development close by.
The deal between the parties does not come as a surprise, given that the HomeCo and Woolworths have a cozy relationship. Within HomeCo’s $4.939 billion, 49-property portfolio, Woolworths is the largest tenant, accounting for 7.3% of HomeCo’s gross income, ahead of Coles with 4.3%.
Australian Property Journal reached out to HomeCo for comment. HomeCo declined to discuss details of the arrangement and maintained that Woolworths is the current buyer.
Australian Property Journal also reached out to Woolworths, and the supermarket giant did not deny or confirm on the specifics of the arrangement.
“We’ve been a tenant in the Plumpton Marketplace, through our Woolworths and Big W businesses, since it opened in 1994.
“We look forward to continuing our operations within this centre and to continuing to service the local community for many years to come,” a Woolworths spokesperson told Australian Property Journal.
Meanwhile the return of capital to the retail property market and ongoing stabilisation of cap rates has helped lift the value of HomeCo Daily Needs REIT’s portfolio by $131 million to $4.939 billion, representing a circa 3% increase on the June 2024 portfolio value. This comprised of $79 million net valuation gain driven by strong net operating income growth and cap rate stabilisation to 5.64%. Net of acquisitions and capital expenditure incurred during the period was $53 million.
Fund manager Paul Doherty said this is the second consecutive period the trust has recorded positive net revaluation gains.
“HDN’s portfolio is now benefitting from both positive net operating income growth and cap rate stabilisation, reflecting the attractive investment characteristics of the daily needs asset class. HDN’s point of difference remains our value accretive and tenant-demand led development pipeline, underpinning future growth over the long-term,” said Doherty.
“We are optimistic on the outlook for our portfolio underpinned by increasing investor demand for daily needs retail assets,” HMC Capital managing director, real estate and HDN CEO, Sid Sharma added.
