The maiden first half result for HomeCo Daily Needs REIT delivered funds from operations (FFO) of $3.1m which was ahead of the $2.5m prospectus forecast due to the early settlement of IPO properties and some income from acquisitions.
FY21 FFO guidance is tracking over 9% above prospectus forecasts at $20.5m. DPS guidance has been reiterated with a maiden distribution of 2.4 cents declared.
Management continues to target assets under management (AUM) of $3bn (currently $978m) over the medium term via organic growth, development projects and acquisitions.
The Add rating is maintained and the target price is increased to $1.45 from $1.44, after small upgrades by Morgans to FY21 FFO in-line with guidance. These also incorporate further growth regarding the brownfield pipeline, which will contribute income fully from FY23.
Sector: Real Estate.
Target price is $1.45.Current Price is $1.36. Difference: $0.09 – (brackets indicate current price is over target). If HDN meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).
