- $266M in acquisitions proposed for seven large format retail assets
- Armstrong Creek Town Centre (VIC) acquisition also on the cards
- Oversubscribed raise sees in $93M to fund acquisitions, more to come
HomeCo Daily Needs REIT (ASX: HDN), also known as Home Consortium, went into a trading halt on Monday ahead of major announcements for the company. The trading halt ended yesterday with normal trading for HDN commencing today.
It’s big news for the company that only last week announced a doubling of the equity raise for the launch of a new company HealthCo, now sitting at a proposed $1 billion.
Acquisitions
Shortly after the trading halt was announced, HomeCo said in a media release that, as part of delivering on its strategy, HomeCo had made a number of major acquisitions, including seven large format retail assets and Armstrong Creek Town Centre.
The seven large format retail assets total $266.4 million, the company said it had a weighted average cap rate of 6.75% as compared to the current portfolio which sits at 5.91%. The purchase price was also noted as a discount, 6% lower than independent valuations of $283.7 million.
The Armstrong Creek Town Centre asset had a total purchase price of $55.6 million, the company said it “[represented] a 6.00% cap rate.” The property has “exposure to high population growth corridor of the Geelong region.”
HomeCo said the seven large format retail assets are located at Box Hill (VIC) which is anchored by Decathlon, Goodlife, and BCF; Bundall (QLD) which is anchored by Nick Scali and Goodlife; Mackay (QLD) which is anchored by Spotlight and Nick Scali; Marsden Park (NSW) which is anchored by Nick Scali and Anaconda; South Morang (VIC) anchored by Amart and Plenty Valley Medical; Toowoomba South (QLD) anchored by Amart and Nick Scali, and Upper Coomera (QLD) which is anchored by Spotlight and TK Maxx.
These moves are pending unitholder approval, and if successful, is expected to be completed by July this year.
Equity raising
HomeCo also announced the “raising of $265 million to equity fund the acquisitions and associated transactions costs”.
The details of the raise include $265 million “underwritten accelerated non-renounceable 1 for 2.36 Entitlement Offer” at the price of $1.295 per new unit. Also part of the raise is a conditional bonus unit for every new unit issued, “fully funded by HMC [HomeCo]”.
Completion of institutional entitlement offer
HDN announced yesterday that it had successfully completed the placement of new units as part of the equity raising process. The raise amounted to approximately $93 million or 71.8 million new units at $1.295.
The company said “the institutional shortfall was strongly oversubscribed, which bodes well for the sector, as it becomes another ASX listed real estate company that completed a successful raise this year, indicating strong signs the sector is not just doing strong despite pandemic but perhaps booming.
A retail entitlement offer is expected to open soon to raise another $101.5 million dollars, opening Monday next week (26 April), closing two weeks later on Friday 7 May.
