HomeCo $325m IPO to ramp up shopping centre footprint

HomeCo $325m IPO to ramp up shopping centre footprint

The group that snapped up Woolworths' (ASX: WOW) Masters stores three years ago for $800 million is now an ASX-listed company with plans to develop nine more shopping centres across Victoria, Queensland, New South Wales and Western Australia.

Sydney-based HomeCo (ASX: HMC) was expected to start trading at 1pm AEDT today with an indicative $325 million initial public offering (IPO) at $3.35 per share, but shares opened at $3.64 each.

Focused on "hyper-convenience" retail and with its own subsidiaries amongst its tenants, HomeCo is backed by major retail families including shareholders in the Spotlight, Chemist Warehouse, Primewest and Aurrum groups.

Led by executive chairman David Di Pilla, the company expects to have 21 operating centres by the end of 2019 with a further nine slated for development. 

HomeCo estimates its 30 properties have a fair value of $925 million, with two thirds of its 1.14 million sqm located in growth corridor suburbs of Brisbane, Sydney, Melbourne and Perth.

Key tenants include Coles, Woolworths,  Aldi, AGI, Dan Murphy's, Anaconda, Rebel, BCF, Supercheap Auto, Nick Scali, AMart and many more, while its centres also include gyms, medical centres and fast food outlets like Guzman y Gomez, KFC and McDonald's.

"HomeCo has positioned the rent it charges tenants competitively relative to other landlords leading to significant new leasing activity over the last two years and 93.5% occupancy across our 21 operating centres," Di Pilla and deputy chairman Christopher Saxon said in the prospectus.

"In a world moving through structural change driven by the emergence and growth of ecommerce platforms, HomeCo's tenant mix and competitive cost of doing business is expected to uniquely support the group to flourish in the future."

The $325 million is matched by a debt facility drawdown of the same amount plus $25 million in convertible notes. 

Around 62 per cent of all that funding will go towards refinancing existing debt facilities with $415.67 million slated, while $137.25 million will be for leasehold acquisitions and $24 million will be for working capital. 

HomeCo will also deposit $60 million in a Lease Mitigation Account (LMA) using proceeds from the offer.

In FY19 HomeCo's revenue rose 247 per cent to $49 million, however the company recorded a $22.58 million loss from ordinary activities compared to a $516,308 profit in the previous year.

In the lead-up to the IPO the company sold four investment properties with gross proceeds of $43 million.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

A game changer? Aspiring to the new standard on workplace mental health
Partner Content
Work health and safety regulators have been more active in the area of mental health ri...
Aon
Advertisement

Related Stories

Angry merchants make good on class action against Tyro Payments

Angry merchants make good on class action against Tyro Payments

Disgruntled merchants have made good their threats to sue Tyro Paym...

NSW tourism and events sector gets $530m shot in the arm

NSW tourism and events sector gets $530m shot in the arm

As New South Wales blasts through vaccine milestones, the state gov...

Melbourne hearing tech startup Hemideina taking on Cochlear with $10m Series A raise

Melbourne hearing tech startup Hemideina taking on Cochlear with $10m Series A raise

A female-led medical technology company is lifting the frequency of...

Wood Tech plans PPE manufacturing boost with $12m Rogers Industries acquisition

Wood Tech plans PPE manufacturing boost with $12m Rogers Industries acquisition

Manufacturer The Wood Tech Group will strengthen its diversificatio...