Homeco Daily Needs REIT Delivers on FY25 Guidance and Guides to Growth in FY26

HomeCo Daily Needs REIT (ASX: HDN) released its results for the year ended 30 June 2025. The result highlights the strength of HDN’s strategically located metropolitan assets focused on non-discretionary retail and services tenants. The unique portfolio composition and location along with continued delivery of our development pipeline continues to differentiate HDN in the Australian real estate sector and support earnings growth going forward. Key highlights for the period are:

Investment and development highlights

• Positive Jun-25 asset revaluations, delivering a +$142m gross increase (+$80m net) on the Dec-24 portfolio value, representing a 3.0% uplift
• $70m of net asset disposals provide funding flexibility to pursue accretive acquisitions and unlock additional development opportunities
• $170m of pre-committed development projects underway targeting ~7%+ ROIC¹
• $650m+ development pipeline identified targeting ~7%+ ROIC¹

Operational highlights

• >99% occupancy maintained since IPO
• >99% cash rent collections maintained since IPO
• +4.0% comparable property NOI growth
• +6.0% positive re-leasing spreads2 in line with Jun-24

Financial highlights

• FY25 FFO/unit of 8.8 cents in-line with guidance
• FY25 DPU of 8.5 cents in-line with guidance
• Jun-25 gearing of 35.2%3 at the midpoint of the 30-40% target range
• Jun-25 interest rate hedging of 81% reducing to ~50% in Jul-25 with HDN positioned for a lower rate environment
• NTA/unit of $1.47 (+1.4% vs. Dec-24) driven by strong underlying NOI growth

FY26 guidance

• FY26 FFO/unit guidance of 9.0 cents
• FY26 DPU guidance of 8.6 cents

HMC Capital Managing Director, Real Estate & HDN CEO, Sid Sharma said, “The strong set of FY25 results reflects our strategically located metropolitan assets which have limited exposure to cyclical and discretionary retail expenditure. HDN continues to benefit from portfolio occupancy of over 99%, collect over 99% of rent, and maintain sector leading positive re-leasing spreads of +6.0%. The strong rental reversion we are achieving demonstrates the inherent value proposition of our real estate, which is predominately leased to leading national tenants.”

This FY25 result continues the consistent operational excellence of HDN as we head into our 5 year anniversary as a listed entity. We have delivered 6.7% CAGR in FFO per unit since IPO while navigating a rising interest rate environment.

HDN Fund Manager, Paul Doherty said, “HDN has a strong balance sheet as at Jun-25 with net assets of $3.1bn and gearing at the midpoint of the target range. We have continued to reposition the asset base towards our model portfolio and have been net sellers in FY25 as we recycle capital into more value accretive developments and acquisitions.

“Finally, we are pleased to provide FY26 FFO guidance of 9.0cpu and DPU guidance of 8.6cpu, reflecting growth of +2.3% and +1.2% over FY25, respectively.”

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¹ Return on invested capital (ROIC) represents cash yield on cost once development is fully stabilised. Estimated ROIC is based on assumptions relating to future income, valuation, capex and calculated on a fully stabilised basis.
² For new leases and renewals.
³ Jun-25 Statutory gearing, pro-forma adjusted for the contracted disposal of Bundall and acquisition of Warilla Grove is 35.5%.