HomeCo fund in $222m shopping centre acquisition spree

HomeCo fund in $222m shopping centre acquisition spree

Pakenham Lifestyle Centre (via Facebook).

HomeCo Daily Needs REIT (ASX: HDN) is rattling the tin to fund $222 million worth of acquisitions centred around suburban shopping centres nearly a year after listing on the ASX.

The real estate investment trust will undertake a fully underwritten placement to raise $88.3 million to partially fund the acquisitions which are anticipated to be 3 per cent accretive to FY22 funds from operations.

The $222 million acquisition portfolio consists of the Woodlea Town Centre in Victoria ($55.4 million), the Pakenham Lifestyle Centre in VIC ($98.5 million), two large-format retail assets owned by HDN’s parent worth $39.6 million in total, Armstrong Creek Dan Murphy’s in Victoria ($21.5 million), and Upper Coomera Hungry Jack’s in Queensland ($7 million).

The company says the portfolio increases its exposure to strategic growth corridors and represents highly secure income as the properties are 99.5 per cent occupied.

“The acquisitions and placement announced today are consistent with HDN’s strategy to secure high-quality daily needs focused assets which complement our model portfolio and deliver stable and growing distributions,” says HDN.

“The acquisition properties were all secured off-market and offer highly defensive and growing income streams via long-term leases to major national tenants, high occupancy and embedded rental growth through fixed annual rental reviews of 3.3 per cent.

“Furthermore, the assets are strategically located in key growth corridors with low site coverage, which provides further upside potential from future accretive brownfield development.”

HDN’s $88.3 million placement is expected to settle on Thursday, 16 September.

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