Home Consortium Ltd (ASX: HMC) has enjoyed a successful start to its ASX-listed existence.
Following the Home Consortium share price gain of 126% in the past year and launching an ASX-listed REIT, the group headed by David Di Pilla looks to try its luck again, but different.
Image source: Getty Images
Backstory on Home Consortium
Before we get ahead of ourselves, it might be worth a refresher on what and where Home Consortium came from.
Back in 2016, when Masters Hardware (owned by Woolworths Group Ltd (ASX: WOW)) crumbled, all those prime property developments were left ripe for the picking. That's when former UBS investment banker David Di Pilla swooped in.
Many potential suitors were assessing the 30 odd sites and running the numbers. However, the thing with hardware stores is that they don't produce particularly high rent, making them a lower value property than, say, a shopping centre. However, this is where Mr Di Pilla recognised the potential.
Rather than buying the sites for a mediocre rental return, Di Pilla and colleagues redeveloped the sites to cater for smaller format stores inside. This move increased the rental yield of the property portfolio.
Following the success of Home Consortium and a few more property acquisitions, the decision was made to spin out some of the supermarket holdings in the form of an ASX-listed daily-needs real estate investment trust (REIT). The result – a now 19 property strong REIT known as the HomeCo Daily Needs REIT (ASX: HDN).
Yet, the Home Consortium team doesn't plan on stopping there.
Why end a good thing?
Having successfully listed the Daily Needs REIT, being the biggest property listing last year, another REIT is rumoured to already be in motion.
Reportedly the group has started preparing investors for what will be known as "HealthCo". The new ASX-listed REIT to be will include properties in aged care, childcare, hospitals, primary care, and life sciences.
The Australian Financial Review reported that Macquarie Capital, Morgan Stanley and Morgans has been brought on to raise capital. Initial raising will seek to source $500 million, although investor interest could see that being substantially higher.
If successful in raising capital and listing, it is expected the property portfolio will initially hold $2 billion in assets.
Home Consortium performance beyond share price
In February, Home Consortium provided its first-half results for FY21, and the metrics looked solid. In particular, the 82% increase in funds under management since its initial public offering (IPO).
Furthermore, the group held an impressive 44 assets, spanning 1.5 million square metres of land. Pleasingly for shareholders, occupancy levels remained high at 99% across this portfolio.
The solid performance extends to the Home Consortium share price. The past 12 months have seen the group's share price climb 126%. A stellar result considering the trading environment for brick-and-mortar stores.
Demand for HealthCo will certainly benefit from the track record of Home Consortium and its HomeCo REIT thus far.
