HomeCo Daily Needs (HDN) investor relations material

Executive summary

• Achieved FY25 FFO per unit of 8.8¢ (up 2.3% YoY) and DPU of 8.5¢ (up 2.4% YoY), meeting guidance; FY26 guidance set at 9.0¢ FFO and 8.6¢ DPU, with a gradual shift to 100% AFFO payout ratio.

• FFO per unit CAGR since IPO is 6.7%, with strong operational performance, 4% comp NOI growth, 6% leasing spreads, and >99% occupancy and rent collection.

• Portfolio value increased to $4.92B, diversified by subsector, tenant, and geography, despite being a net seller.

• Asset recycling and disciplined capital management, including active development pipeline, have supported growth without capital raises.

• Sustainability initiatives achieved a 32% reduction in emissions since FY22 and 70% of feasible sites with solar.

Financial highlights

• Property net income grew 6% to $288M in FY25; FFO reached $182.5M or 8.8¢ per unit, despite a 17% increase in net interest expense.

• Distributions per unit increased to 8.5¢ from 8.3¢ YoY; NTA per unit rose 1% to $1.47 as of June 2025.

• Gearing at 35.2%, within the 30–40% target range; liquidity at $108M with no debt expiries until FY27.

• Maintenance CapEx and tenant incentives totaled $20M in FY25 ($5M maintenance, $15M incentives).

• Weighted average cap rate at 5.56%; interest coverage ratio at 3.1x, well above covenant minimum.

Outlook and guidance

• FY26 FFO guidance is 9¢ per unit, distributions at 8.6¢, with a gradual transition to a 100% AFFO payout ratio.

• Comp NOI growth expected at 4%, supported by strong leasing spreads and OpEx management.

• Development commencements targeted at $80–120M in FY26, with a $650M pipeline over 5–6 years.

• Interest expense assumed at 3.4% for unhedged debt; ~50% of drawn debt hedged for FY26.

• Focus on capital recycling to fund organic growth and increase exposure to defensive daily needs assets.