HomeCo Daily Needs (HDN) H2 2025 earnings summary

Executive summary

• FY 2025 delivered disciplined growth in earnings, with FFO per unit of 8.8 cents (up 2.3% YoY) and DPU of 8.5 cents (up 2.4% YoY), meeting guidance.

• Portfolio value reached $4.92 billion, diversified by subsector, tenant, and geography, with over 99% occupancy and rent collection.

• Achieved a 6.7% CAGR in FFO per unit since IPO, with strong operational performance and high occupancy and rent collection rates.

• Active asset recycling and a $650 million development pipeline support ongoing growth and resilience.

• Sustainability initiatives delivered a 32% reduction in emissions (vs FY22 baseline) and 70% of feasible sites with solar installed.

Financial highlights

• FY25 property NOI increased to $288.3 million, up from $272.9 million year-over-year.

• FFO rose to $182.5 million or 8.8 cents per unit, despite a 17% rise in net interest expense.

• Distributions per unit increased to 8.5 cents from 8.3 cents year-over-year.

• Net tangible assets at $1.47 per unit as of June 2025, up from $1.45 at December 2024.

• Gearing at 35.2% as of June 2025, within the 30-40% target range; liquidity at $108 million.

Outlook and guidance

• FY 2026 guidance: FFO per unit of 9.0 cents and DPU of 8.6 cents, with a gradual reduction in payout ratio to align with AFFO.

• Targeting 4% comparable NOI growth and $80-120 million in development commencements for FY 2026.

• Interest expense expected to stabilize, with ~50% of drawn debt hedged for FY26.

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