In preparation of its HomeCo Daily Needs REIT, listed large-format retail landlord Home Consortium (HomeCo) has boosted its portfolio with the acquisition of two assets in Sydney’s west with a combined value of $220 million.
Under the latest deal, the David Di Pilla-backed group has bought the Glenmore Park Town Centre in western Sydney, worth about $150 million, and also agreed terms to buy a second Sydney metropolitan neighbourhood centre, said to be the Oran Park Podium, for combined value of $220 million.
Glenmore Park is a Woolworths, Coles and Aldi anchored centre with more than 40 per cent of gross income derived from supermarkets and over 30 per cent derived from healthcare and wellness services.
The two assets will add to the proposed HomeCo Daily Needs REIT float, which has a property portfolio of 16 assets valued at $800 million and will be managed by the parent HomeCo.
It is looking to list in November amid suggestions of a market value of about $500 million and is aimed at retail investors, similar to the Homeco float.
The parent HomeCo, whose hyper-convenience retail model grew out of Woolworths’ failed Masters hardware sites, was listed late last year. It has grown its funds under management to $1.2 billion and has seen an increase in asset value of about 5 per cent despite the global pandemic.
Former UBS banker Matthew Grounds, the Oatley family and Aussie Home Loans founder John Symond also backed the HomeCo float last year.
In the float presentation, HomeCo Daily Needs REIT has a forecast 5 per cent distribution yield, and a conservative capital structure with target gearing range of 30-40 per cent.
Brokers to the float will be Goldman Sachs and Macquarie Capital and the board will include property stalwarts Simon Tuxen, formerly at Westfield, and Simon Shakesheff from Stockland as independent non-executive directors.
The trust will have a deliberate focus on hyper-convenience and daily needs tenants and a strong diversification across tenants, sectors and geographies.
HomeCo chief executive Mr Di Pilla said the proposed HomeCo Daily Needs REIT was consistent with HomeCo’s stated “own, develop and manage strategy”.
“This has helped to establish the platform for HomeCo to unlock additional value and growth through further capital recycling and ongoing management fee streams from assets under management,” Mr Di Pilla said.
“The property acquisitions announced will provide the HomeCo Daily Needs REIT with additional exposure to key growth corridors within the western Sydney metropolitan area and will be important seed assets for the Daily Needs REIT.”
Source: Thanks smh.com