Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Time for a checkup?
Property group Home Consortium (ASX: HMC), or HomeCo for short, will soon list its new healthcare real estate investment trust (REIT), called HealthCo Healthcare and Wellness REIT (ASX: HCW) on the ASX, raising $650 million. It is another major step from the renowned management team, which floated the original business at a time that many were predicting a difficult period ahead for property.
The listing will be the year’s second largest this year behind PEXA, which was demerged from Link Administration (ASX:LNK). The raising was upsized from $600 million to $650 million following the strong response from retail and institutional investors.
The prospectus has now been lodged with ASIC with trading of new units in HealthCo Healthcare and Wellness REIT expected to commence on a normal settlement basis on 6 September 2021. Management has received credit approval for a $400 million senior debt facility for the HealthCo Healthcare and Wellness REIT, allowing a fast expansion in assets under management. The REIT is well-positioned for growth, with a net cash position and over $300 million of investment capacity for accretive acquisitions and committed development pipeline.
HomeCo will manage the listing with a 20 per cent stake, pricing the deal on a 4.5 per cent yield. According to the Australian Financial Review, the balance sheet will show the company as having no debt and a war chest of around $400 million to go on a M&A hunt.
The fund’s portfolio will consistent of childcare, healthcare, aged care, government properties, medical centres and life science hubs. HomeCo itself currently has $2.3 billion in assets under management. The company says, “the initial portfolio of the REIT will consist of 27 seed assets with a fair value of $555 million, which includes tenants such as the Commonwealth and Queensland governments, GenesisCare, Acurio Health Group and Guardian Childcare.”
This will be HomeCo’s second REIT, following the HomeCo Daily Needs REIT (ASX: HDN), which owns convenience-based assets focused on neighbourhood, large-format retail and health and wellness tenants, in areas with access to densely populated trade areas.
According to the AFR, the consortium is made up of nine brokers on board to sell HealthCo. Macquarie and Morgan Stanley are on the top line as joint lead managers (JLMs) and underwriters, while Morgans is another JLM, NAB a JLM on the retail side; the co-managers include Bell Potter, Wilsons, Craigs, Escala, Taylor Collison and Crestone.”
There is currently upwards of $220 billion in potential investment in similar assets such as hospitals, childcare, primary care and aged care.
