Image: Canva, HDN.
  • Three major projects to begin construction in Q1 FY23
  • Developments have strong leasing commitments with two properties over 75%
  • Full year FY22 distribution 8.28 cpu following latest quarter of 2.12 cpu declared

HomeCo Daily Needs REIT (ASX: HDN) announced a preliminary unaudited net valuation gain of $209 million, recently, the figure a 4.6% increase on December 2021.

Rent collection and occupancy also remained strong for the company, recorded at over 99% each.

“HDN’s high quality and strategic asset base remains well positioned for the higher inflation and interest rate environment we are now facing,” said HDN CEO Sid Sharma.

“The portfolio is in strong shape with 99% rent collection and 99% occupancy, providing a strong platform to drive rental growth and new income streams via development.

“With more than 77 million total annual customer visits, foot traffic remains robust and increased by 1.4% in the March quarter versus the prior corresponding period.”

Pro format valuations for 31 December 2021 were $4.551 billion, comprising $2.047 million independent valuations, and $2.505 million internal valuations. The latest figure is $4.786 billion, comprising the $209 million uplifts and $26 million capital expenditure; the final figure is $4.786 billion, a gross increase of 5.2% or net increase of 4.6%.

“The portfolio recorded strong valuation gains highlighting the growing demand for daily needs assets from both private and increasingly, institutional investors. Investors remain attracted to high quality daily needs assets offering defensive income streams underpinned by attractive long-term megatrends.

Sid Sharma, HomeCo CEO

“We believe the shift to omni-channel retailing is a long-term structural tailwind which is driving the evolution of our asset base into critical last mile infrastructure.”

HDN’s Glenmore Park development will see some 2,400 square metres of GLA added to the existing daily needs town centre and will be anchored by government services, health and wellness tenants.

The property has also recorded pre-leasing commitments for over 75% of GLA, received requisite planning approval, and expects construction to commence in Q1 FY23.

HomeCo Mackay has received planning approval for over 17,000 square metres of GLA, complementing the existing 14,000 square metre large format retail centre. The development has received over 64% leasing commitments and expects construction to also commence in Q1 FY23.

HomeCo Nowra has received planning approval for 11,000 square metres, with the company noting it has over 75% leasing commitments in place.

Construction is also expected to commence in Q1 FY23; HDN noted that Nowra is an ex-Masters building undergoing conversion.

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