HomeCo Daily Needs REIT (ASX:HDN) released its results for the full year ended 30 June 2026 on 13 August 2026. The announcement reported Funds From Operations (FFO) per unit of 9.0 cents and distributions per unit (DPU) of 8.6 cents, which the company said were in line with guidance, and provided FY27 guidance of FFO of 8.8 cents per unit and DPU of 8.6 cents.

WHAT HOMECO DAILY NEEDS REIT DOES

HomeCo Daily Needs REIT is an Australian real estate Investment trust listed on the ASX with a mandate to invest in convenience-based Assets across neighbourhood retail, large format retail, and health and services sub-sectors. It states that it aims to provide unitholders with consistent and growing distributions.

HDN reports total assets of approximately $5.2 billion across 2.3 million square metres of land in metropolitan growth corridors in Sydney, Melbourne, Brisbane, Perth and Adelaide. It is also a strategic investor in HMC Last Mile Logistics (LML), the HMC Unlisted Grocery Fund (HUG) and the HMC Australian Retail Partnership (HARP). The trust is managed by HMC Funds Management Limited, a member of the HMC Capital group.

FY26 FINANCIAL AND OPERATING RESULTS

FFO per unit was 9.0 cents compared with 8.8 cents in FY25, and DPU was 8.6 cents compared with 8.5 cents. Net Tangible Assets (NTA) per unit were $1.56, up 6.1% on June 2025. Gearing at June 2026 was 35.7%, which the company said is at the midpoint of its 30% to 40% target range. Interest Rate hedging was 68.4% on June 2026 drawn Debt and 75.0% as at June 2027.

Operationally, occupancy was 99%, which the company said has been maintained since its IPO, and cash rent collections were above 99%, also maintained since IPO. Comparable property net Operating Income (NOI) grew 4.0%, and leasing spreads on new leases and renewals were +5.9%, which the company described as market leading.

June 2026 asset revaluations delivered a gross increase of $311 million, or $180 million net, on the June 2025 portfolio value, representing a 6.2% uplift. The company completed $81 million of acquisitions with a target internal rate of return of more than 10%, offset by $168 million of disposals at an exit Capitalisation rate of 5.25% and a 1.6% premium to book value. It replaced its secured debt Facility with a new senior unsecured facility, upsized by $300 million and supported by an inaugural Credit rating of BBB+.

HDN has $120 million of active development projects for FY26 targeting a return on invested capital (ROIC) of approximately 7% or more, and has identified a development pipeline of more than $650 million targeting the same return. The company defines ROIC as cash Yield on cost once development is fully stabilised, and notes the estimate is based on assumptions about future income, valuation and capital expenditure.

FY27 GUIDANCE

HDN forecasts comparable property NOI growth of 4.0% for FY27. It said that higher financing costs are expected to reduce FY27 FFO by approximately 2%, with distribution guidance maintained. The company expects FY27 FFO per unit of 8.8 cents and DPU of 8.6 cents.

Sid Sharma, HMC Capital Managing Director, Real Estate and HDN Chief Executive Officer, said the company expects continued top-line Revenue growth, operational execution and leasing outcomes to underpin the FY27 guidance while absorbing material interest rate headwinds. He said HDN will continue to assess selective asset sales and capital recycling opportunities to support gearing reduction and Balance Sheet flexibility.

RISKS AND WHAT TO WATCH

The announcement states that higher financing costs are expected to reduce FY27 FFO by approximately 2%, and FFO per unit guidance of 8.8 cents compares with 9.0 cents in FY26. Gearing of 35.7% sits at the midpoint of the target range, and the company has referred to asset sales and capital recycling as a way to support gearing reduction. Hedging was 68.4% of drawn debt at June 2026.

Development returns are described as estimates based on assumptions relating to future income, valuation and capital expenditure. The announcement contains forward-looking statements, and the company states that actual results may differ materially from those expressed or implied.

NEXT MILESTONES

Items referenced in the announcement include delivery of FY27 guidance, progress on the $120 million of active development projects and the $650 million development pipeline, any asset sales or capital recycling, and changes in hedging cover, which is expected to be 75.0% as at June 2027 on June 2026 drawn debt. An investor and analyst teleconference was held at 10:00am AEST on 13 August 2026, and a playback is available on HMC Capital's website.