HomeCo debuted on the ASX this week (code HMC) giving exposure to a national portfolio of 30 retail centres formed out of the former Masters warehouses, which it bought for $725 million in September 2016.
Since then the group sold off a number of stores and converted others to the new retail format. Of the 30 Centres left in the portfolio, 21 will be trading by the end of 2019 – mostly on the east coast – with a further nine centres under development. In total, the portfolio is worth $925 million based on a capitalisation rate of 6.85 per cent.
The portfolio is difficult to compare with traditional retail portfolios. There is a large exposure to Homemaker tenants with Amart Furniture the biggest tenant by income (11.1%), followed by Spotlight Retail Group (5.3%), Super Retail Group (5%), Nick Scali (4.5%), Goodlife (4.2%).
The Group is however attempting to position the portfolio to the hyper-convenience sector (likely to attract the sensible capital) however its exposure to Coles (3.7%), Woolworths (2.5%) and Chemist Warehouse (2.5%) suggests otherwise.
Nothwithstanding this the market favoured the stock finished the first day up 12% above its issue price.
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