- After raising $265 million last month, Home Co Daily Needs REIT (HDN) once again asks for funds for a fresh acquisition
- The company is hoping to raise $70 million in a fully underwritten by institutional placement to purchase a shopping centre in Queensland
- Funds raised will be used towards the $160 million purchase price for the Town Centre Victoria Point property
- The company said the issue price of $1.45 represents a three per cent discount on the last close price of $1.495
- HomeCo Daily Needs is trading at $1.50 in the midst of a trading halt
HomeCo Daily Needs REIT (HDN) looks to raise $70 million to acquire the Town Centre Victoria Point, Queensland for $160 million.
The new round of funding comes after the company completed a $265 million non-renounceable entitlement offer just last month.
That round of funding went towards acquiring seven assets from Home Consortium spanning across Victoria, Queensland and New South Wales.
The shopping centre is located 30km south-east of the Brisbane CBD and is anchored by major tenants Woolworths, Bunnings, Healius and Endeavour Group.
Town Centre Victoria Point enjoys a 98 per cent occupancy rate with a weighted average lease expiry of 7.1 years and a gross leasable area of 20,892 sqm.
The purchase price of $160 million represents a 4.75 per cent fully leased yield with a 12-month rental guarantee from the settlement, which is expected in August.
HDN Fund Portfolio Manager Paul Doherty said the opportunity to acquire an asset such as this was rare and that it complements its strategy and existing portfolio well.
This well-located flagship convenience property is anchored by high quality, strongly performing tenants on long term leases with attractive organic growth,” he said.
“In addition, the property offers significant long-term potential to drive enhanced returns through development by capitalising on the property’s significant expansion potential.”
HDN is undertaking a fully underwritten by Macquarie Capital institutional placement to raise $70 million at an issue price of $1.45 to fund the acquisition.
The company said the issue price represents a three per cent discount on the last close price of $1.495.
New units will be entitled to the distribution for the quarter ending September and will rank equally with existing shares.
The company said the acquisition is immediately accretive to HDN’s previous FY 22 funds from operation/unit guidance of 8.3 cents per unit, which was reaffirmed last month.
Balance sheet gearing is expected to be at the mid-point of HDN’s target gearing range of 30–40 per cent, according to HDN.
HomeCo Daily Needs is trading at $1.50 in the midst of a trading halt.