AU : HomeCo Daily Needs REIT - Bulking up

HDN has completed a capital raising with funds used to acquire a new Neighbourhood asset as well as seven LFR properties from HMC (subject to June vote). The transactions further bolster the portfolio which will be valued at +A$1.3bn. FY21 FFO guidance set at 3.9c (A$21m); FY22 FFO guidance of at least 8.3c (A$57m) implies 24% growth. The yield remains attractive at +6%. Pro-forma NTA stands at A$1.31, however we expect there is near-term upside from revaluations. Pro-forma gearing is 32.1%. We retain an Add rating with a revised price target of A$1.50.

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