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- Since its IPO in November 2020, HomeCo Daily Needs REIT (HDN) has exceeded its FY21 public disclosure statement (PDS) expectations
- The real estate investment trust’s FY21 funds from operations (FFO) of $21.4 million was up 14 per cent versus PDS FY21 FFO of $18.8 million
- HDN enjoyed an 82 per cent increase in its portfolio value since its IPO to $1.6 billion through acquisitions, development and asset revaluations.
- The company has reaffirmed its FY22 FFO/unit guidance of 8.3 cents with an FY22 distribution per unit guidance of eight cents
- Shares in HDN are up 3.08 per cent to $1.51 at 12:30 pm AEST
HomeCo Daily Needs REIT (HDN) has outperformed its FY21 public disclosure statement (PDS) guidance since listing in November 2020.
The real estate investment trust’s FY21 funds from operations (FFO) of $21.4 million was up 14 per cent versus its PDS FY21 FFO of $18.8 million.
The expanding company enjoyed an 82 per cent increase in its portfolio value since its IPO to $1.6 billion through a combination of acquisitions, development and asset revaluations.
Fund portfolio manager Paul Doherty said notwithstanding the backdrop of COVID-19, the company made progress through an active approach to asset management, development and acquisitions since its IPO.
The company has been acquisitive since its November 2020 IPO, contracting $586 million in acquisitions, increases its portfolio from 17 to 28 properties.
Among the purchases was the HomeCO large format retail portfolio of seven assets for $266.4 million, as well as Town Centre Victoria Point for $160 million.
HDN chair Simon Shakesheff said the retail landscape is rapidly evolving thanks in part to COVID-19.
“The shift to omnichannel retailing is a global megatrend and retailers are increasingly leveraging their existing store networks as the optimal solution for both in-store and on-line fulfilment,” he said.
“We are seeing this playout across the portfolio via multiple channels including click & collect, micro-fulfilment and home delivery.”
Despite the oncoming evolution, Mr Shakesheff said the company’s portfolio was resilient.
“We have maintained a high quality and defensive exposure across our target sub-sectors, and we have achieved 99% unadjusted cash collection6 since IPO,” he said.
“The portfolio is well positioned for the current environment with more than 80% national tenants and 88% of assets in metro locations.”
HDN’s portfolio is 99.3 per cent occupied, 0.8 per cent more than outlined in the PDS with 99 per cent unadjusted cash collections from November to June 2021.
The portfolio’s weighted average lease expiry has dropped slightly, from 8.1 years in December 2020 to eight years in June 2021 with no more than 10 per cent of income expiring in any one year before FY26.
The company enjoyed a 14 per cent like-for-like supermarket moving annual total growth with two supermarkets in turnover rent and three within 10 per cent.
Its development pipeline increased to around $130m and HDN expects it to deliver an attractive return on invested capital and FFO growth.
HDN has reaffirmed its FY22 FFO/unit guidance of 8.3 cents with an FY22 distribution per unit guidance of eight cents.
Shares in HDN were up 3.08 per cent to $1.51 at 12:30 pm AEST.
