Other prominent shareholders include the former Australian head of UBS Matthew Grounds, the Oatley Family and John Symond.
Based on the closing price HomeCo, which is focused on “hyper convenience” retail, has market capitalisation of about $750 million and boasts high-profile tenants including Amart Furniture, Spotlight, Nick Scali, Woolworths or Coles.
It’s been a remarkable achievement over a relatively short period of time
David Di Pilla
The deal is a legacy of Woolworths’ disastrous hardware joint venture that saw it offload a clutch of Masters properties when it shut the chain down.
Mr Di Pilla said it was only two years since the group had closed the acquisition of the Masters business.
“It’s been a remarkable achievement over a relatively short period of time,” Mr Di Pilla said at the float event in Sydney.
“We don’t take being a publicly listed company lightly. The foundation shareholders are not selling down any of their holdings and I’ve got my hard-earned in there too.”
One of its differentiating points is that 20 per cent of the tenants are what HomeCo regards as e-commerce proof services.
“We have gyms, medical centres, child care, and vets and about 30 per cent of the portfolio is anchored by daily needs retailers including the large supermarkets,” Mr Di Pilla said.
“We have been carefully filling the centres with a good mix of tenants that are not exposed to e-commerce.”
HomeCo’s portfolio has a weighted average lease expiry of about 8.8 years and rents set at “competitive levels to enable the retailers to get the best out of the business”, he said.
Retail agents said rents in similar centres ranged from a small store paying about $150 per square metre to a larger anchor-style tenant paying about $400 per sq m.
Mr Di Pilla said future growth would come from both acquisitions of land and property, “where they make sense and add value to the portfolio”.
In the prospectus, HomeCo forecast an annualised fully franked dividend yield of 6 per cent for the period from listing to June 30, 2020, on a forecast dividend per security of 15¢.
It has a forecast gearing of 34.3 per cent, earnings before interest, tax, depreciation and amortisation of $31.98 million and consolidated net profit of $3.62 million for the 2020 financial year.
In the 2019 financial year, HomeCo’s revenue rose 247 per cent to $49 million. But the company recorded a $22.58 million loss from ordinary activities compared to a $516,308 profit in the previous year.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.
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