HomeCo Daily Needs REIT valuation update

HomeCo Daily Needs REIT (ASX:HDN) has announced a preliminary unaudited valuation gain of $131 million for December 2024. This represents a 3% increase from the June 2024 portfolio value. The gain is driven by strong net operating income growth and cap rate stabilization at 5.64%.

Summary and outlook for HomeCo Daily Needs REIT

HomeCo Daily Needs REIT has reported a significant valuation gain, attributed to strong net operating income growth and a stable cap rate. The company's portfolio valuation has increased to $4,939 million, showcasing robust characteristics of daily needs assets. A quarterly distribution of 2.125 cents per unit has been declared, with the company's FY25 distribution and funds from operations guidance reaffirmed. HomeCo aims to drive long-term growth through value accretive projects in the development pipeline, amidst increasing investor demand for daily needs retail assets.

Executive commentary on valuation and distribution

The $131 million valuation gain is composed of $79 million net valuation gain driven by net operating income growth and $53 million from capital expenditure during the period.