Why is the Home Consortium (ASX:HMC) share price up today?

The property group share price is trading higher today on plans to muscle into the health and wellness sector.

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Home Consortium Ltd (ASX: HMC) shares have walked through today’s session in the green. HomeCo’s share price has closed at $5.40, 0.75% higher than Friday’s closing price.

This comes after the company announced this morning it has increased the value of its HealthCo portfolio to around $1 billion.

Let’s take a closer look at what the property group announced.

What is HealthCo?

HomeCo is a managed property group that has interests in the development, management and ownership of property in Australia.

HealthCo is HomeCo’s planned asset establishment to increase its exposure to the health and wellness industry.

The company proposed the initiative in April 2021 and has since completed several acquisitions.

Today’s announcements build on previous language outlining HomeCo’s strategy in establishing two HealthCo-specific fund alternatives by the end of this calendar year.

These include an ASX-listed HealthCo real estate investment trust (REIT) and an unlisted HealthCo institutional fund.

In today’s announcement, the company detailed transactions in its HealthCo portfolio that include the acquisition of “8 private oncology assets” at a value of $110.3 million.

It also stated HealthCo had established a joint venture with operator Acurio Health to develop an integrated private hospital in Camden, New South Wales.

The company stated this private hospital initiative has the potential to “create a $500+ million health and innovation precinct” in the area.

According to HomeCo, these acquisitions will be funded from available cash and “undrawn debt commitments” which it defines as HomeCo’s “existing senior debt credit”.

What now?

Announcements regarding HealthCo have been reflected in HomeCo’s share price over this year to date.

Following the key announcement back in April, the HomeCo share price jumped from $4.68 to $5 a piece.

Moreover, following a similar update in May, HomeCo shares spiked from $4.65 to a high of $5.80 on 21 June.

According to the company, both of HealthCo’s ASX-listed and unlisted fund alternatives remain on track for establishment by the proposed deadline.

The initial listing process for HealthCo will look to raise $500 million of equity and aims to list in the first half of 2022.

The unlisted HealthCo fund is also on track to meet this deadline and is seeking to raise $1 billion.

Speaking on today’s announcement, HomeCo managing director and chief executive David Di Pilla said:

Today’s acquisition update further demonstrates our ability to source high-quality healthcare assets which align to the model portfolio strategy for HealthCo.

We are pleased to establish strategic partnerships with both GenesisCare and Acurio. In particular, we look forward to the development at Camden as part of our significant broader involvement in the Western Sydney growth corridor.

HomeCo share price snapshot

HomeCo shares have gained 35% year-to-date, which builds on a 12-month return of 111%.

These returns have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of 23.8% over the previous year.

At the current market price, HomeCo has a market capitalisation of $1.56 billion and pays a dividend of 13.5 cents per share, fully-franked.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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