HomeCo has completed preliminary unaudited valuations of all 30 properties in its portfolio showing a 5.2% increase in value.
The valuations comprised 15 independent valuations representing 50% of its properties by number and 53% by value.
The preliminary unaudited portfolio valuation has increased 5.2% by $49m to $1,014m (from 31 December 2019 to 30 June 2020). Net of capital expenditure incurred during the period of $22m, this represents a net valuation increase of $27m or 2.8%.
HomeCo Executive Chairman & CEO David Di Pilla commented, “The preliminary valuation result is positive and reflects the quality and resilience of HomeCo’s hyper-convenience model and the increasing exposure to daily needs and services tenants. Foot traffic trends at the centres have continued to be positive with an increase of 9% and 17% for the months of May and June 20202.
HomeCo also advised that it has entered into a binding contract to acquire the Parafield Retail Complex (“Parafield”). Parafield is located in close proximity to Parafield Airport, approximately 12km north of the Adelaide CBD. The site includes 3.7 hectares of land with a total lettable area of approximately 15,500 sqm across a single level of which a portion includes a former Masters lease.
The site currently has existing leases with Officeworks, Supercheap Auto, Hungry Jacks and Tradezone with a heads of agreement with Adelaide Tools (a subsidiary of Bunnings Group Limited). The site is currently leased from Parafield Airport with approximately 28 years remaining with a 49 year option renewal.
HomeCo’s expected year 1 ungeared cash yield on the acquisition is 7.5% p.a. with a total investment of approximately $25m, which will be funded by existing cash and senior debt facilities. As part of the transaction the foundation securityholders (via the LMA) will also contribute capital funding and provide an income guarantee for current vacant tenancies. The acquisition is expected to settle by August 2020.
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