HomeCo Western Sydney Tour

28 January 2021

HomeCo have taken a number of analysts and investors on a tour of their Western Sydney holdings.

The tour highlights HomeCo’s recent acquisitions and more particularly the strategy which drives them to invest further into Sydney’s growth corridors.

HomeCo are seeking to build a portfolio of Centres of which 90% or more are located in metropolitan areas. The groups intends to maintain a relative exposure to each major capital city location based on its relative GDP contribution.

HomeCo also intend to maintain a 50% weighting to Neighbourhood Centres, 30% to Large Format Retail Centres and 20% to Health & Services Centres, all of which have a lower correlation to traditional discretionary retail distribution channels which are increasingly moving on line.

HomeCo expected that income support for this style of portfolio will come from higher quality tenants, a national tenant base and importantly, no exposure to department stores, discount department stores and minimal exposure to discretionary retail and fashion.

The tour began at Prestons in Sydney’s South West with a tour through a Woolworths based centre. The Centre is a good example of HomeCo’s preferred asset. It acquired the Centre from Woolworths in July 2020 for $32.8m and is currently valued at $36.6m. 52% of the income from the Centre is generated from Woolworths with a smaller range of specialty stores generating 17% of the income and a Health & Services sector generating 30% of the income.


HomeCo’s recent acquisition at Gregory Hills was next on the agenda. The Centre sits on a 4.6ha site which provide HomeCo with the ability add an additional Supermarket at some point. The Centre also includes a Fuel station and Fast Food outlet. Both Greggory Hills and Prestons are newer Centres which are likely to see increased sales as the communities around them continue to grow.

Gregory Hills

The group is also likely to drive past the Gregory Hills Homemaker Centre which it acquired In December for $32m.

The tour then turned North to head up through the Western Sydney Airport land which will provide a large number of opportunities for investment over the next decade.

Next on the list was Glenmore Park Town Centre. The Group acquired the Centre for around $150m in September 2020. The Centre consists of two separate Centres, each anchored by a major supermarket. The 4.5ha site also provides HomeCo the opportunity to connect the two centres, and reposition the entire asset through intensification of a range of daily needs uses.

Glenmore Park Town Centre

Just a little further North is the Penrith Homemaker precinct in which HomeCo have established a large format retail centre. The Centre is largely leased to furniture, homewares and electrical retailers who service the growing catchment. This is arguable a lesser quality form of retail asset for the group as it is more susceptible to economic downturns and a shift to online purchasing, however the site (which is well positioned) was an old Masters’ store which the group has successfully transformed.


The tour then progressed toward Rouse Hill where HomeCo subsidiary HealthCo has acquired a child care asset as part of a portfolio of 6 health, education and Government services properties for a total initial investment of $62 million. These types of assets will form the basis on the new listed vehicle HomeCo hopes to spin off in 2021.

And finally to a Bunnings Store at Seven Hills which the group also acquired in December for $56m.

The tour is intended to provide investors with the confidence that HomeCo strategy and ability to execute will deliver investors higher returns with lower volatility of earnings.

Our Views

Our view is that HomeCo are on the right track with the Daily Needs REIT and HealthCo strategy.

HomeCo unit price has recovered well from the first COVID impact in March 2020 and is now trading above the same time last year.

We have placed them on preferred REIT list.