HomeCo sells retail, buys social infrastructure investments

The recently completed Health Hub Morayfield is costing $110m.

Home Consortium (HMC; HomeCo) has spent $133.2 million on three more social infrastructure assets to seed its HealthCo REIT.

The biggest acquisition – a put and call option worth $110m – is for Health Hub Morayfield, about 44 kilometres north of Brisbane.

A Tarneit childcare centre was one of six assets HomeCo acquired for HealthCo REIT last December.

On 1.4 hectares at 19-31 Dickson Road, the recently completed complex, delivered by Health Development Corporation for Argus Property Partners, is trading at a 5.4 per cent capitalisation rate.

The property includes a GP clinic, radiology and other allied health services, retail (including a pharmacy and cafe) and 92-place child minding facility.

The area, in a residential growth corridor, is expected to accommodate nearly 620,000 residents by the mid-2030s – more than a third of which will be aged over 50.

In a second deal, much closer to the city, at 201 Logan Rd, Woolloongabba, HMC has outlaid $13m for a childcare centre rented to Busy Bees.

This property is trading a t a 5.5pc cap rate.

Settlement took place last month.

The third asset, another childcare centre, is in Sydney’s west Five Dock.

This property, 4-6 Ramsay Street, at the south east corner of Connecticut Avenue, is costing $10.2m.

The cap rate is also 5.5pc.

It is expected to settle at the end of the month.

HMC said the two smaller assets will be warehoused on the balance sheet prior to the establishment of ASX-listed and unlisted funds later this year.

HealthCo’s seed portfolio value is now $480m; last December it acquired six assets for a total of $131m.

Investments for the fund worth another $300m are in due diligence, the parent added (story continues below).

Non-core disposal

HMC also today announced the disposal of an 11,322 square metre LFR asset – again in Morayfield.

The $28.4m sale price (or $28.85m headline price) of the HomeCo branded centre is 3.5pc over the December, 2020, book value.

The deal, coincidentally to Argus, is scheduled to settle this month.

“This sale builds upon the previously announced [$17m] sale of an LFR property in Bathurst, NSW, on January, 2021,” a statement added.

“Following these transactions and the previously announced LFR asset sales of $266.4m to HomeCo Daily Needs REIT (HDN), HomeCo’s directly owned portfolio of LFR assets will decrease to $154.6m.

“HomeCo will continue to actively manage its remaining LFR assets held on balance sheet and will continue evaluating asset recycling opportunities, including sale of HDN or sale to third parties, to deliver optimum long term securityholder returns”.

HMC managing director and chief executive officer David Di Pilla said the parent is on track to establish HealthCo later this year.

“Pleasingly, we continue to execute our strategy in a capital efficient manner through active capital recycling,” he added.

“Our balance sheet is well capitalised with minimal debt, providing us with significant capacity to secure additional assets for HealthCo”.

HMC has appointed L.E.K Consulting Australia for research into the five major sub-sectors HealthCo is targeting – due for release later this year.

“The report…indicates a potential addressable market of $220 billion of healthcare real estate in Australia,” the statement said.

More to come. 

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.