HomeCo looking to expand empire with eye on western Sydney

Retail landlord HomeCo is defying the coronavirus pandemic and is seeking major acquisitions in western Sydney.

An artists impression of the Oran Park Podium stage two expansion. The centre is thought to be in the sights of HomeCo, which is looking for major acquisitions.

Retail landlord HomeCo is defying the coronavirus pandemic by looking to expand its empire of convenience retail stores beyond the former Masters sites it has redeveloped, and is seeking major acquisitions in western Sydney.

The company tapped some of the country’s wealthiest families as it snapped up the ex-Masters hardware properties for about $725m in 2016, and it redeveloped the best sites into shopping centres before a successful float last year.

Buying shopping centres while the coronavirus pandemic and an accelerating shift to e-commerce rip through the sector may appear counterintuitive. But convenience retailing and large format centres have proven their resilience.

Both HomeCo and rival large format-focused Aventus, backed by billionaire Brett Blundy, performed well in reporting season. Wealthy investors are keen to back HomeCo’s brand of daily needs retailing, with backers including HomeCo executive chairman David Di Pilla’s own Aurrum Group of investors joined by the founders of Spotlight, Chemist Warehouse, and the Besen family.

Former UBS banker Matthew Grounds, the Oatley family and Aussie Home Loans founder John Symond also backed the HomeCo float last year.

The company is now targeting the $150m purchase of Glenmore Park Town Centre in western Sydney. It houses strongly performing Woolworths, Coles and Aldi supermarkets and about 60 specialty retailers. The centre, which has more than 650 car spaces, also includes services such as a Coles click & collect. Retailers were selected in line with the area demographics, making the two building complexes resilient through the crisis.

HomeCo has also been linked to other western Sydney centres, including Oran Park Podium, which won approval for a $92m expansion earlier this year. The project by the Perich family’s Greenfields Development Company will more than double the size of the existing centre, including more than 50 new shops, a market-style food court and an outdoor dining precinct.

The company declined to comment on its interest in the assets, but is defying the coronavirus pandemic with its empire of convenience retail stores performing well as consumers stay home and spend up in their local areas.

The company is betting that convenience-style retail will surge as the economy emerges from the pandemic and is preparing to spin off a specialist retail real estate investment trust with up to $600m of assets on the Australian Securities Exchange.

Mr Di Pilla last month said the company was also looking at other opportunities that could result in the proposed vehicle being even bigger.

HomeCo is also proposing one of the country’s first specialist medical services and childcare property-based trusts, although this will be unlisted. It is developing new specialist precincts and already has about $150m of assets.

HomeCo has already grown to $1.2bn of assets under management, reflecting 30 per cent growth since it floated last year.