Data Centre Play Drives Record Results for HMC

HMC Capital has reported triple-digit percentage growth to top off a strong first half year of fundraising and acquisitions as the reporting season continues. Developers in the office and industrial spaces such as Charter Hall, Growthpoint and Dexus are still suffering from office underperformance, but told the market they are primed and ready for growth. HMC Capital HMC Capital threw its weight behind data centres and energy across the half year, ramping up acquisition and fundraising activities for record results. It undertook an Initial Public Offering (IPO) for its DigiCo Infrastructure REIT, a $4.3-billion fund that positions HMC as a “global manager in the opportunity rich” data centre sector. HMC said that the $2.7-billion equity raising represented the largest Australian IPO transaction in six years. It also acquired Neoen’s Victorian portfolio for $950 million in a “highly opportunistic” deal to seed its energy-transition platform. ▲ Neoen divested its Victorian portfolio to HMC, including one of the world ’ s largest batteries, the 300mW Victorian Big Battery at Geelong. At the time, HMC managing director David Di Pilla said it reflected the “significant investment” required in Australia and globally to achieve decarbonisation targets. The acquisitive business reported revenues up 217 per cent to $127.3 million, from $40.2 million in the corresponding half year in 2023. Profits for the half year rose 838 per cent to $166.9 million. Di Pilla said that the group had made a strong start to the year with record results. “We are seeing momentum pick up in our real estate division which is on track to establish three major new unlisted institutional funds which will add over $2.5 billion of potential [assets under management] as we deploy these into new strategies,” Di Pilla said. Charter Hall In its half-year results to December 2024, Charter Hall Group said it was “poised to deliver attractive growth in earnings and asset values” after a difficult year prior given its considerable exposure to underperforming sectors. Its office sector funds under management represent 36.1 per cent of its portfolio. It leased 125,187sq m across 111 transactions in the past six months, with a 6.8-year weighted average lease expiry (WALE) on transactions nationally. and logistics accounted for its biggest segment at 38.4 per cent, and offset declines in other areas with “strong momentum,” leasing 328,197sq m across 19 transactions in the half year. ▲ Charter Hall ’ s 275 George Street in Brisbane. It reported a statutory profit of $61.1 million, a considerable improvement on the $190-million statutory loss it made in the same period in 2023. Operating earnings of $196.4 million were up slightly on the six months to December 2023 when Charter Hall reported $195.1 million. The company told the ASX that it continued to “drive modern asset creation” with completions totalling $800 million in the past 12 months as its pipeline, sitting at $13.3 billion, “continues to be re-stocked”, according to Charter Hall managing director David Harrison. “We see current market pricing as offering attractive long-term returns for stabilised core real estate products and our investment strategies,” Harrison said. “It is our expectation that capital deployment will accelerate to take advantage of market conditions and typically accelerates further as the upward cycle gathers pace.” Growthpoint Growthpoint was buoyant in its half-year results, confident it was “creating momentum” as it delivered $288 million in new assets under management. However, it reported a statutory net loss of $98.7 million, due to devaluations on investment properties, it said. However, this was an improvement on the $120.4 million loss it reported for the six months to December of 2023. Highlights of the period included the significant expansion of the Perth Regional Distribution Centre and lease extension agreed with Woolworths, as well as the establishment of the $198-million Growthpoint Australia Logistics Partnership with TPG Angelo Gordon. ▲ Growthpoint said that the TPG Angelo Gordon partnership was “a testament to the strength of our industrial portfolio”. It also established a Canberra office trust, which acquired a $90-million A-Grade office building in the national capital’s CBD. It completed 13,671sq m of office leasing across 17 deals and focused on “repositioning” 30,000sq m of office assets to upgrade or fit out office spaces in Sydney Olympic Park, South Melbourne and South Brisbane. It said that 65 per cent of new leases during the year were for these repositioned spaces. Growthpoint completed 100,058sq m of industrial leasing, although occupancy reduced slightly to 98 per cent due to a vacancy at its 34-44 Raglan Street asset at Preston, Victoria. Dexus Revenue from ordinary activities reached $434.7 million for the half year, a 9.6 per cent decrease on the previous year. Adjusted funds from operations declined 13.9 per cent to $251.8 million, which Dexus said was due to higher interest rates, lower trading profits and the “continued impact of higher incentives flowing through the portfolio”, it said. Location remained a key performance differentiator for its office segment, with Sydney core and Melbourne eastern core assets reporting “materially lower vacancy” than market CBD averages. The Brisbane office market continued to improve, it said, but the departure of the Victorian Government from 80 Collins Street in Melbourne brought down its portfolio occupancy to 93.5 per cent. ▲ Dexus’s Atlassian Central in Sydney. Leasing volumes of 48,500sq m were weighted towards smaller deals in the Sydney CBD and incentives on deals in Brisbane and Sydney reduced. While “leasing momentum was strong” in its industrial portfolio, like-for-like income declined 1.2 per cent due to vacancies at “select assets”. In brighter news, it made a statutory net profit after tax of $10.3 million, compared to a $597.2 million loss in the previous half year, and its Atlassian Central and Waterfront Brisbane developments are primed to “become next generation assets and enhance portfolio quality for Dexus”. Dexus group chief executive Ross De Vernet said the developer had progressed its “medium-term priorities of transitioning the balance sheet, maximising the contribution from the funds business and unlocking our deep sector expertise”.

Data Centre Play Drives Record Results for HMC

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