Why investors should fix their gaze at Home Consortium (ASX:HMC)

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Summary

  • Home Consortium will target a model portfolio of assets via its proposed establishment of HealthCo.
  • HomeCo is now targeting an initial equity raise of $1.0 billion, which is subject to market conditions.
  • Home Consortium’s share price is trading down by 1.71 per cent to A$4.61 (as of 11:26 AM AEST).

Home Consortium (ASX:HMC) today released an update on the proposed establishment of HealthCo. HealthCo will target a model portfolio of assets in key healthcare sub-sectors such as primary care, childcare, hospitals, aged care, and life sciences.

Image Source: ID 16879882 © Kzlobastov | Megapixl.com

HomeCo operates in the real estate sector and has a focus on the ownership, development, and management of real assets. HomeCo manages a property portfolio of assets with tenants, spanning daily needs, leisure, lifestyle, healthcare, wellness, and government services enterprises, across Australia.

The company is competing against LendLease Group (ASX:LLC), Goodman Group (ASX:GMG), and Charter Hall Group (ASX:CHC)

Read More: Responsible lending rules could soon roll back due to delays in home loan approval

The company’s model portfolio of Health and Wellness sectors would be focused on delivery of stable distributions, long-term capital growth while also delivering positive outcomes for local communities through HomeCo’s environmental and social impact asset management initiatives.

The strategy to establish two capital sources across the listed and unlisted markets reflects the breadth of the investment opportunity universe and the strong level of investor demand for this exposure, which is currently unavailable at an institutional scale on the ASX.

To satisfy this need, HealthCo’s listed and unlisted vehicles will co-invest where they find it appropriate, providing the most flexibility to secure assets at scale, and to the best implement target model portfolio construction and sub-sector diversification.

Image Source: ID 13957612 © Aprescindere | Megapixl.com

Subject to market conditions, HomeCo is now targeting an initial equity raise of $1.0 billion, double the size of the proposed equity raising flagged in HomeCo’s 1HFY21 results on 24 February 2021 across both listed and unlisted investment vehicles.

HomeCo will target maintaining a 10-15% investment over the long term and will contribute $250 million of stabilised seed assets ($350 million on an as-complete basis) currently held on HomeCo’s balance sheet. The acquisition pipeline for HealthCo continues to grow with almost $800 million of assets, currently under due diligence or held on HomeCo’s balance sheet as seed assets.

Read More: Home Consortium To Undertake A$140 Million Fully Underwritten Placement To Fund the Acquisition

Stock Performance

Home Consortium’s share price is trading down by 1.71 per cent to A$4.61 (as of 11:26 AM AEST). The stock has delivered a healthy return of 41.6 per cent while the one-year return stands at over 106 per cent.

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