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Home Consortium's (ASX: HMC) healthcare real estate investment trust has surpassed expectations on two fronts today ahead of an initial public offering (IPO), exceeding initial funding plans by $150 million and jotting down a much shorter listing timeframe.
Just three weeks ago the group announced the portfolio of its HealthCo fund would swell to $1 billion on new acquisitions, highlighting plans to raise at least $500 million for a planned IPO at the end of 2021.
But today the group revealed it had reached an underwriting agreement to raise an upsized $650 million, backed by $130 million coming from HomeCo itself along with a range of domestic and global institutional investors.
The equity raise for HealthCo, to be listed on the ASX under the ticker HCW, is now due to be settled in early September.
"We are delighted with the strong level of investor support for HealthCo Healthcare and Wellness REIT with the raising strongly oversubscribed," HomeCo CEO and managing director David Di Pilla said.
"The proposed ASX listing of HealthCo Healthcare and Wellness REIT in early September marks another significant milestone for our organisation and builds on the success of HomeCo and HomeCo Daily Needs REIT (ASX: HDN) which have both outperformed the S&P/ASX 300 A-REIT index since listing.
"HomeCo is now well positioned to accelerate its growth and scale its capital light funds management model."
Once settled, the deal will shore up HealthCo's finances and prime it for further expansion. The fund is expected to be left with a net cash position and more than $300 million in investment capacity for accretive acquisitions and a committed development pipeline.
Credit approval has also been given for a $400 million senior debt facility.
Last week the parent company said a co-investment strategy, which will see certain acquisitions made jointly, will help "HealthCo in accessing a larger pool of investment opportunities".
HealthCo chair Joseph Carrozzi said those opportunities were widespread.
"The HealthCo Healthcare and Wellness REIT is uniquely positioned to provide exposure to a diversified portfolio of assets underpinned by attractive healthcare sector megatrends," Carrozzi said.
"We will aim to deliver stable and growing distributions, long-term capital growth and positive environmental and social impact."
HealthCo has been on a high so far this year. Last month it bagged eight new oncology assets and a hospital joint venture in Southwestern Sydney, while in May the group announced $133.2 million in health and childcare property acquisitions concentrated in Queensland's Moreton Bay area.
In July it was also announced that Dr Chris Roberts, former CEO of hearing devices giant Cochlear (ASX: COH), had agreed to join the proposed board of ASX-Listed HealthCo as an independent director.
The fund is also in a joint venture with operator Acurio Health Group to acquire and develop a 5-hectare integrated private hospital-anchored health precinct in Camden in Sydney's southwest.
The project comprises The George Centre in the first stage, followed by the an integrated health and innovation precinct in stages two and three with a potential end value of more than $500 million.
"We look forward to partnering with HealthCo to build a world class health precinct in Camden. This will start with a private Paediatric and Maternity Hospital, The George Centre. Construction will commence in September 2021 with opening targeted at mid 2023," Acurio CEO Scott Fowler said in mid-July.
The George Centre is set to complement existing services to help meet the family healthcare needs of Camden, Campbelltown and the surrounding community and be the first private paediatric-focused healthcare facility in NSW.
"We bring to this joint venture years of experience and a team of world-class healthcare experts who understand and are committed to the design, development and delivery of innovative patient-centric care," Acurio's chief strategy officer Robert Lin said at the time.
"The joint venture accelerates our ability to further elevate healthcare standards for the Camden LGA in delivering the highest quality medical services to the local community."
HealthCo's sortie into the sector was accelerated late last year, after the parent company snagged six health, education and government services properties for $131 million, and upped the size of its overall health exposure to more than $400 million.
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