Australian real estate investment trust HomeCo Daily Needs (HDN) has reported “solid” growth in its December half driven by strong tenant demand for both existing portfolios and developments.

The Reit has a portfolio valued at around $4.7 billion spanning 2.5 million sqm of land in major metropolitan corridors including Sydney, Melbourne, Brisbane, Perth and Adelaide.

For the six months to December 31, funds from operation increased 8 per cent to $89.4 million while distribution per unit was up 2 per cent compared to the previous period.

The company is on track to deliver more than $80 million in developments this financial year at 7 per cent of return on invested capital.

Sid Sharma, HDN CEO, said the business’s development pipeline remains a “key pillar” for its growth strategy and more developments will get underway during the next financial year.

“We remain well positioned to generate attractive incremental returns on capital and our projects continue to be significantly de-risked through early builder engagement and tenant pre-leasing,” he said.

HMC Capital group CFO, Will McMicking, added: “HomeCo Daily Needs is well positioned as we move into a more subdued economic environment with a highly defensive tenant base, low and sustainable rents, minimal vacancy and expiries and a strong balance sheet.”

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