• Strong top line revenue performance driving FFO/unit & DPU growth
• Highly defensive and diversified income streams with high quality tenants
• Continuing to execute on re-weighting back to the model portfolio

HomeCo Daily Needs REIT (HDN) reported strong financial results for the first half of FY25, with FFO per unit increasing by 1.3% to 4.3 cents and DPU increasing by 2.5% to 4.3 cents. This performance was driven by robust top line revenue growth, underpinned by positive leasing spreads of 6.1%, weighted average rent reviews of 3.6%, and active expense management. The portfolio remains highly defensive and diversified, with 40% exposure to neighbourhood assets, 40% to large format retail, and 20% to health and services. The top 10 tenants account for 33% of gross income, with a weighted average lease expiry of 4.8 years. HDN continues to execute on its strategy of reweighting the portfolio back towards its target model, which is designed to deliver stable and growing property income with low correlation to traditional retail and property sectors. This has involved disposing of approximately $730 million of assets at a ~6% passing yield and acquiring around $500 million of assets at a ~7% target yield. Looking ahead, HDN is targeting $100-$120 million of pre-committed development commencements in FY25, with an estimated return on invested capital of around 7% once fully stabilised.

HDN is targeting $100-$120 million of pre-committed development commencements in FY25, with an estimated return on invested capital of around 7% once fully stabilised.

HDN's highly defensive and diversified portfolio, with a focus on daily needs and services tenants, provides a platform for continued asset recycling and organic growth through its development pipeline.