HomeCo Daily Needs show 6.5% increase in vals

31 May 2021

The HomeCo Daily Needs REIT has revealed a 6.5% increase in valuations ($84.7 million) since December 2020, reflecting the strength in the Neighbourhood convenience sector.

The preliminary unaudited valuations for all 27 properties in the portfolio (including the 8 acquisitions announced in April 2021) have been completed, comprising 23 independent valuations with the remaining 4 properties completed by internal valuation. Net of capital expenditure incurred during the period of $23.6 million, this represents a net valuation increase of $61.1 million (4.7%).

The weighted average cap rate for the portfolio was 5.73% which was 20Bos sharper than the December 2020 results of 5.91%.

The high proportion of independent valuations undertaken this period reflects that no independent valuations were undertaken in December 2020 given the proximity to the IPO in November 2020 and the Board’s regard to the magnitude of the valuation gains for the latest six month period.

HDN Fund Portfolio Manager Paul Doherty said: “The draft valuation result provides strong validation for HDN’s high quality and well-located portfolio which is benefitting from robust investment and tenant demand. Incorporating the preliminary unaudited valuations and capital raising announced in April 2021, HDN’s gearing will reduce to the bottom end of the target 30-40% range, providing significant capacity for future investment in
growth initiatives.”

HDN reaffirms FY21 FFO/unit guidance of 3.9 cents and 4Q FY21 distribution of 1.8 cents per unit. HDN is actively monitoring the market for potential acquisition opportunities and is well positioned to execute with a strong capital position.

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