Thank you and good morning, everyone. Thanks for making.

It's a very busy reporting day. Joining me on the call is HDN Fund Manager Paul Doherty, and for the first time joining us is the new Real Estate CFO for HMC, Phil Dooley, who has extensive experience in real estate across Scentre Group and Woolworths Properties.

Welcome, Phil. Before we commence today's presentation, we want to acknowledge the traditional custodians of country.

We celebrate their diverse culture, community, and we pay our respect to elders past, present and emerging, and we extend that respect to all Aboriginal and Torres Strait Islander people today. We'll begin on slide five.

For those that have followed our story and followed convenience retail for the past couple of decades, have probably been waiting 15 years. HomeCo Daily Needs REIT now plays in the hottest sub-sector in retail property in Australia and globally.

Institutional capital across the sector has cottoned on to what high net worth and high quality syndicators have always known: strong cash flows and risk-adjusted returns through all economic cycles. It continues to have the highest quality convenience metropolitan, evidenced by what we believe to be the continued focus on sustained operational excellence.

This half was another period of disciplined and focused execution of our consistent strategy since IPO. In the period, we saw consistent top-line revenue growth driving FFO per unit up 2.5% on the prior corresponding period.

Our distribution, up 1.2% on the prior corresponding period, with the payout ratio moderating as we continue our plan to right-size over time. Our NTA continues to grow, supported by strong asset revaluations.

Notably, this is the fourth consecutive period HDN has recorded positive net valuation gains. The valuation gains, NOI growth, accretive tenant-led developments, and capitalisation rates moderately tightening, midpoint of our target gearing range, and we are well positioned to execute on our development pipeline.

Importantly, it's our operational excellence that continues to power our consistent results. Comparable NOI growth of 4.2% while sustaining high occupancy above 99% are all markistics and metrics.

Importantly, our focus on cash business of this nature continues, and we continue to bill and collect 99% of the cash every month as we have done. We will continue to focus on growing our earnings, creating exciting new developments for our retailers, and appropriately manage our balance sheet within the means available to us.

We're happily reaffirming our distribution of 9 cents and our distribution of 8.6 cents. I will hand over to Paul to discuss our continued focus on strategy and portfolio performance.

Thanks, Sid. Turning now to slide six, strategy has remained consistent since IPO and is clearly focused on creating.

This strategic focus is very clearly aligned with and supports the growth strategies of Australia's leading retailers. Our target model: 30% large format and services.

This mix balances the best characteristics of defensive, reliable and sustainable growth. HDN's strong investment fundamentals are underpinned by competitive rents at the bottom end, and as a result, HDN continues to achieve sector-leading leasing spreads and low incentives.

We're pleased to have delivered 6.2 leasing spreads, with momentum continuing into the second half. HDN owns high quality and strategically located property.

Our current site coverage of 30% in inbuilt growth opportunities. Our portfolio is strategically differentiated, 4% exposure to metropolitan locations.

Importantly, it has a high skew to the large growth centres of Sydney, Melbourne and Brisbane to the Gold Coast. Over around 12.7 million Australians who live within a 10-kilometre radius of a HDN centre.

That positioning million customer visitations across the HomeCo portfolio throughout the year. It's worth noting that the population in and around our centres is forecast to grow by 21% over the next 10 years.

This positions HDN's portfolio to play a critical role in strategies. On slide eight, I want to make further comment on the strategic location of the portfolio.

Our portfolio has grown to 5.1 billion and, as I've just pointed out, is located in growth corridors, with 40% of the portfolio in Sydney metropolitan area, 19% of the portfolio in the Melbourne metropolitan area, and 17% in Greater Brisbane and the Gold Coast, growing in Australia, giving our portfolio exposure to the increasing population as demographic growth projections we've included. Turning now to slide nine.

Here we highlight our diversified tenant base of Australia's leading retailers. Our top 10 tenants income, with no single tenant exceeding 10% of our revenue.

These are some of the highest quality tenants across Australia, and some of the largest retailers providing essential or non-discretionary retail. It's frequently about tenant sales, and as we say every half, these are directly correlated with rental spreads or cash collections.

That given, HDN's retailers continue to perform strongly. Our total MAT growth is 2.4% and the non-discretionary have continued to report strong performance, with this group at 3.7%.

On slide 10, HDN owns high quality real estate occupied by approximately 1,350 tenants. The portfolio has consistently and cash collections of greater than 99%.

The ongoing performance underscores the quality assets and robust tenant base continue to demonstrate their resilience through economic cycles. Our sustainable meter, combined with the high level of convenience and metropolitan locations, give us a relationship with our tenants and our unit holders.

88% every year by a weighted average of three and a half percent. Comparable NOI and this was driven by our market-leading leasing spreads of 6.2% across 97 leasing deals.

Importantly, our legacy in low incentives of less than 4%, and we've maintained our WALE of 4.9 years. At December, just 3% of 26 income remains to be committed since December.

On slide 11, we set out the growth in the valuation of HDN five. What's important to note on this slide is that our portfolio valuation growth of 212 million gross is underpinned by NOI growth.

That's always been the case for HDN since our inception, heading into another year where there's macroeconomic uncertainty. We remain positive on the growth prospects for the portfolio, with valuations being supported by a combination of high quality assets and weight of investment demand that’s result in transactions in the daily needs sector in 2025.

Moving to slide 12. Our results remain market-leading, and we're proud of the intensity with which we manage our assets.

Our leasing spreads and comp NOI growth is testament to that asset management focus. This operational excellence translates into our FFO per unit CAGR performance over the last five years, which is market leading.

Turning now to our sustainability, across the business we continue to make solid progress on the ESG initiatives that support both long-term value creation and positive social impact. On the environmental front, the broader HMC Real Estate platform is reviewing its sustainability next phase of the group's evolution.

We've also achieved four-star Green South Nowra and Glenmore Park, a clear recognition of our commitment to healthier and more efficient buildings. We're progressively rolling out solar where feasible to reduce emissions and operating costs over time.

Socially, we maintain 50% gender diversity across independent board director roles at the HDN level, and our action plan continues to advance. We've also strengthened our community partnerships, including continued support and our relationship with Youngster.co.

In governance, for the fourth successive year, HDN was recognised as a regional top-rated ESG. Our annual modern slavery statements andGRES submission.

We remain focused on embedding strong ESG practices across the platform as we continue to build a responsible portfolio. Moving now to HDN's growth.

HDN owns 2.3 million square metres of high-quality and strategically located property. With a 36% site coverage.

We continue to actively develop our assets: a $50 million development pipeline where we target a return on invested capital of at least 7%. Our active projects all remain on track, delivered in excess of 8%.

Given the economic climate, the deployment timing of our development pipeline remains under review to the prevailing risk and return hurdles. On slide 16, we discuss Warilla Grove.

The centre is located 15 kilometres south of Wollongong and is underpinned by a high-performing Woolworths and Aldi supermarkets. We've got a great track record of improving performance post-acquisitions.

Southlands, Marsden, Queensland, Seven Hills, Williams Landing and Armstrong Creek are all examples where we've bought well, repositioned or redeveloped well and achieved outsized valuation gains driven by income growth. Warilla is no different.

This is forecast to deliver 10% ROIC on incremental development spend, the valuation uplift targeted represent return on invested capital. On slide 17, here we have an 11,200-square-metre leisure and lifestyle expansion, which will commence trading in March.

The development's occupied by ASX-listed and leading national retailers including Officeworks, Nick Scali and Anaconda. The development's delivering a greater than 7% return, $13 million net valuation gain at December.

At the site we retain a further 10,000 square metres of land where we've got an approval for an additional 7,000 square metres of GLA. It's already generated interest from multiple retailers.

Pokolbin and Caringbah developments are also on track in terms of delivery and returns. Our Pokolbin reached practical completion in the first on track for handover to tenants in early March.

On slide 18, we provide an update on some of our other projects. There's a header schedule, with construction well advanced and opening forecast in October 26.

The centre will have a 1,000-square-metre online fulfilment centre with complementary daily needs retailers. Through our investment in the unlisted grocery fund, we've also commenced the construction of neighbourhood centres at Richlands and Diggers Rest.

Both of these centres are targeted to open in the first half of 27. We're very pleased with our recent project completions and the active pipeline.

HDN has a proven track record of strong returns. We continue to allocate capital to the highest quality daily needs assets.

I'll now hand over to Phil to take us through the financial results for the half in more detail.

Turning now to slide 20 to go through the earnings summary. For the first half, we delivered FFO of 92.4 cents per unit, up from 4.3 cents for the prior period, an increase of 4.6% to 148.7 million.

This was supported by leasing spreads of 6.2%, combined with active completions also contributed to the uplift in the half. Net interest expense, the higher interest rate environment.

During the half, we increased our hedging to 70%, revenue growth, any unhedged increase in interest expense, allowing us to maintain distributions of 4.3 cents per unit. Highlight the strength and resilience of the portfolio and our continued operational excellence and focus.

On slide 21, we present the balance sheet. HDN remains in a strong financial position at 31 December with net assets of $3.18, increasing to $1.55 per unit, up from $1.40.

This uplift reflects improving valuations, supported by favourable derivative movements. Our weighted average cap rate is now 5.51%.

During the half, we continued asset recycling, including the divestment of three assets at a small premium to book value. Proceeds are reinvested into higher quality neighbourhood centres.

During the period, we completed the acquisition of three assets: Warilla, as Paul touched on earlier, Leppington land, and Caringbah. Post-period, we have now settled on the disposal of North Lakes.

Looking ahead, our balance sheet remains well positioned to fund growth through targeted recycling and disciplined investment in our development pipeline. Our balance sheet settings remain sound and continue to support the business through the current rate environment, 22%.

When adjusted for the post-balance date settlement of North Lakes, this reduced to 34.6%. This is within our target range and provides ample flexibility to support our development pipeline.

Pro forma liquidity increased to $80 million following the disposal of North Lakes. Funding remains sufficient and aligned to our capital deployment plans.

During the Mill facility that was due to expire in July 26, we extended the tenants to July 28 and achieved a margin reduction of 42 and a half bps, 75 mil of new swaps, taking us to 70% hedged, as I covered earlier. The weighted average cost of debt remains steady at 4.8% and into our portfolio to ensure resilience, maintain flexibility, and support ongoing investment in the portfolio.

I'll now hand back to Sid to provide guidance and closing remarks.

Thanks, Phil. Just rounding out, we reaffirm our FY26 guidance of 9 cents and 8.6 cents per unit.

Notwithstanding, as ourselves and the spectre of rising interest rates, our portfolio has and will continue to perform well. We'll continue to review our return hurdles and manage this portfolio within the means of the balance sheet, as we have done now for the better part of four years.

I will now hand over to the operator for questions.

Good morning. See, upon some of the comments around the margin improvements you realised on the 800.

I was just hoping you could give some sort of indication as to the group's weighted average margin now across the expectation that you sort of gain a similar benefit once the five ARR in FY28?

It's currently around 1.3% and, yeah, we're expecting further improvement as the debt rolls off. Absolutely.

Andrew, the last really speaks to the credit quality of the portfolio, and the margin was one where, some of my remarks earlier, the sector's now increasingly attractive to not only institutional equity capital, but I think the debt markets have understood the credit quality of the HomeCo portfolio and the skew towards national. It's a good kind of bellwether for how our portfolio is performing as well, we think we can, moving forward, like Phil suggested.

All right, that's one on retail trading. I appreciate the focus has always been on profitability and margins over the sort of headline sales figures, but just interested in anecdotes or some of the sales figures you may have received over the past couple of weeks and months, just as that consumer outlook has started to shift in

far

and housing-related categories of the group.

I think as Paul mentioned, MAT across the portfolio, and bearing in mind, we've always preferred foot traffic and cash collections as a better metric for our retailers that report remains sub 40% of the book in total. Notwithstanding that, the tenants that have reported showed MAT across the group of about 2.4%.

If you excluded the supermarkets, our non-supermarket retailers have MAT growth at the end of December of 3.7%. The way to think about, it's about Christmas.

It's about the period all the way from Black Friday extending through to Boxing Day sales. The consumer has been pretty strong, homewares and electrical, and you can test it with some of the listed retailers that have reported, has performed very well over the course of the last year and continued in January.

We don't have the data set yet, but to give you a bit of colour. Now, post the interest rate rise last week, what anecdotally retailers are informing us is some of their annual growth statistics, which were double the Black Friday to New Year's period, the growth rate has halved.

That's from double digit to somewhere around 4% to 5% growth. The consumer is now going to watch and wait and see how they react between now and Easter and see what the RBA does.

There will be some moderation, but HDN's kind of positioned for every cycle, and that's why it's got the balance between your groceries plus your home.

All right, that's very good. Thank you.

Then just my final one is just on some of the investments in the unlisted funds, LML. I guess just interested to hear the appetite to kind of create a second vintage of this strategy, and again, as a bit of a follow-on, just how competitive is it in this sector right now, just given the number of funds raising capital and deploying into it.

We've provided some colour around the HMC unlisted retail funds. There's two key strategies there.

One is the last mile retail strategy, and as you rightly point out, vintage one, which was deployed. Now that vintage had an investment from HDN of around $42 million out of the 54 on that page.

Now that investment is currently sitting on total gains of about 20% since deployment. Vintage two has now been seeded, and I think HMC announced that with a small investment by HDN.

Now that fund is sitting on about a 24% gain and actively screening and in diligence to deploy another $200 million in the short to medium term. Vintage two has already been established and created.

HDN's contributions to that will be pretty limited moving forward, and as you can see, that LML strategy today is $1.4 billion. HDN's investment's only 50.

The group has had raising third-party institutional capital for these strategies. The point I would make around the investor appetite: yes, it's competitive.

It's always been competitive though. Andrew, I think the sophisticated high net worth investors and sophisticated syndication investors have always been investing deeply into this sector for decades.

If you look at the 1,200 convenience retail assets around the country, different entities, majority of which are high net worths and syndicators. What's changing now, and obviously a great discussion point for five years, is that convenience retail is more relevant to the consumer and is the right subsector in retail for the next decade.

We're delighted to see out this is kind of play out and waves of institutional capital coming into the sector, problems unearthing high-quality retail assets that are mispriced. We're not worried about our ability to find that both in HDN and across the group.

Paul's given you a wonderful case study on Warilla and a bit developed over the years. The difference between us and everyone else is we can lease well, we can develop well, we can remix well, and we can manage well, and we do it very proactively with a team that has been here now for the better part of six years.

That's our point of difference, and that's why we can always create outsized returns for our investors, and that's why all of our unlisted funds are sitting on 20-plus percent gains since inception.

That's great. Thank you very much, guys.

Oh, hi. My first question is just about guide, the cost of debt components.

I'm just wondering if you could step through the changes in one page, 26, and I guess why the 42.5 basis point margin reduction didn't lead to an upgrade of guidance?

The interest rates, that's effectively covered our exposure on the 30% that's unhedged and in the middle of guidance at the moment.

Yep. Next question is just on the re-leasing spreads.

I guess there's been a bit of a pickup in spreads across the space. Could you just provide some colour, I guess, on how much spread has been driven by natural underlying rent growth?

Happy to talk a bit on that one. Look, of the 97 deals that we did in the six months, 33 of those were new leases where we either leased up vacant spaces or replaced existing tenants.

On those is where we've typically got and we continue to get our highest level of growth. We've got low double-digit leasing spreads on those new leases, and our renewals remain renewals in the six months, and they delivered a spread of just a tick under 5%.

We also saw the incentive levels remain positive for us. Our incentive levels were around about 10% on the new leases and actually nil,

less than half a percent on the renewals.

Which has been consistent now for a number of years. Like some other groups, our renewal spreads and leasing spreads aren't driven by buying the rent.

It's based on consistent performance of our retailers, which is tracking really well.

Thanks for that. Could you just provide an indication, I guess, how much of the portfolio would be under-rented and potential expiries?

We get asked that question every time, and it's a good question. There's no one magic bullet answer.

I think if you just do a basic analysis here, and some of our peers, you can run an argument for between 100 and 200 bucks a metre, but that's not the right answer. That's a crude, easy answer to get to.

The way I'd probably answer that question is more on our track record page, on our leasing spreads, which is on page 27 of our deck. The group's consistently performed its leasing spreads over quite some time, and that's as we are mixing and balanced around renewals, right?

Downtime is the biggest drag on comp NOI. What we always try to do is find the balance between optimizing tenancy mix at the center, having downtime between retailers, but ensuring that we're keeping our rental trajectory and rental growth going up.

Now, that's a really, really easy thing to say. It's a hard thing.

Management and leasing team do an incredible job on managing that.

Perfect. Thanks, Ed.

That's everything from me. Sure.

Hi, Sid. Thanks for your time.

Just on the refinance of the debt facility, I was wondering if any consideration was given to increasing the liquidity, just in the context of more flexibility to pursue your growth opportunities?

Look, it's a good question, Ben, and the one thing to take away from this set of results is we've always between 80 to 120 mil of developments every year. We've always said that in any given period, that deployment would be subject to other compelling opportunities where we can invest.

We've slowed down a bit of that deployment on the development pipeline, pushed it to a bit of detail. As we think about having the appropriate funding in place and interest rate environment, we are reviewing a couple of things.

One is timing of deployment of our developments. Now, we've got a wonderful development book with great inherent tenant demand, but we're just going to think through the timing of our future developments, provide a more fulsome update at the full year results.

The way to think about means, we want to keep our gearing at 35% and we think we can fund with the valuation gains that are due to come and will come, we can fund at least half of that development within our existing means pretty comfortably. Call it about 50 mil, and then anything beyond 50, earns an outsized performance on, and funding that is under consideration and review given where interest rates are going at the moment.

Are you confident you've enough flexibility to do Armstrong Creek and Richland?

Oh no, they're all done and balance sheet to deliver those. That's all being absolutely dealt with within the current balance sheet.

They're all commitments made.

Yeah. Okay.

Just on the cash flow statement, could you comment on the reason for the increase? Just trying to reconcile that with the net finance costs that have been recognized in operating earnings.

Just wondering if there's anything there that's contributing to the uptick versus the PCP and the higher finance costs in the cash flow versus the P&L?

Finance payments. We had a roll-off come off just after the last period end.

That's the main.

That's the $16.5 million increase. Okay.

Sorry, just a final question. Just on the payout ratio,

Ben, just to clarify, because I think I can see where your question's heading to. There was no income for capital swaps as part of that finance cost.

Right? Just to be clear.

These are all vanilla.

Yep. Appreciate it.

Thanks. Noted.

Just on the payout ratio, you flagged a move to 90% over a period of time at the June result. Just how you're thinking about that, the higher interest rate environment now, in particular with new CFO coming on board?

Sorry, Ben, I just missed that, mate.

Sorry, my question was in relation to the payout ratio.

Yeah.

96% for FY26, but a flagged change to 90% over secure referencing at the June result. Just interested in the updated thoughts, if you have any, on the payout.

Yeah. Look, we want to get to FFO and we want to do it as quickly as possible.

I think I flagged two to three years last half, and depending on some of the underlying portfolio performance and growth, we're just going to review that at the half. We want to right-size it sooner than later would be the way I would think about it, Ben.

Okay. Terrific.

Thanks for your time.

Thanks, Ben. Cheers, mate.

Morning, Paul and Phil. Just one question from me really around the development pipeline, around 110 a year, sort of six-year pipeline.

I think you've sort of been pretty clear on how much the run rate can be, but I'd be interested in any thoughts around opportunity or are you kind of capacity constrained as a team in terms of what you can deliver per annum?

Good question, Tom, and I think the way to think about it is we've lived within our balance sheet means now for a number of years, and what I mean by that is we're disciplined earnings growth for our investors. What we think the talent in doing developments in a listed REIT is to continue your FFO earnings growth trajectory while also delivering for our underlying customers exciting new retail opportunities within the balance sheet, which remain.

Look, at the moment, I think the way to think about it is we've got 650 to spend, but we're probably going to start to pull that back a little bit in terms of deployment in the near term, just to wait and see what happens with the interest rate outlook and just check our settings.

It's more about managing risk and pulling back rather than

attempting

to accelerate.

That's the way to think about it. Continuing to deliver earnings growth, right?

Page 12, about our FFO unit per CAGR for the last five years. I think we've done a good job, which is consistent and growing earnings and consistent and growing distributions.

Everything will be in the context of ensuring that trajectory is maintained. So

just another way to read that, higher rates make it harder. There's less stuff that's going to be feasible now.

Higher rates should usually mean higher rents as well. Rents could offset costs.

I wouldn't think of it simply as that. I would think of it as just prudent capital management and capital allocation.

It's going to be an interesting period over the next little while, and us part of that.

That's good. Thanks for that.

Morning, Paul, Phil, thanks for your time. I just wanted to unpack the potential rent upside from further remixing efforts across the portfolio, specifically for LFR.

They're about 40% versus 30% target weight. Just wanted to ask, leave below your portfolio average of $440 per square meter, and if so, by how much?

About 100 bucks a meter below the portfolio average. Just to give you some colour, new supermarket rents, if you build a brand new greenfield supermarket, and we're one of the few groups across our platform that can do that, rents are heading north of 500 a metre.

LFR rents are around 300 to 400 a metre. That gives you a bit.

The catch-up's coming fast, and the LFR retailers aren't like they were 15 years ago. These are some of Australia's leading brand names with strong balance sheets, strong covenants and an appetite to grow.

Serve their customers really well, and the customers love their product. We'll do it in a sustained way.

We want to be long-term partners for our customers. You won't see us any given year shooting the lights out and being heroes.

Strong partnerships with our tenants and do what's right by them and do what's right by us.

I guess we should think about that more as sustained strong spreads rather than just doing a simple mark-to-market.

Exactly right.

Then just on your margins, they seem to have lifted about 50 basis points since last year. Could you just talk to the drivers of that and whether that's sustainable and if there's any more upside there?

We've

been very disciplined portfolio, and we've been well below the inflation rate. Our rental growth has far outpaced our OPEX growth.

We're at a good level now. We continue to manage it proactively.

That's always the challenge for the team. Make sure our income growth at the top line is better than our OPEX growth, and then that continue to either stay where it is or moderately improve.

Maybe coming back to Dodds's question earlier. Just on the remainder of the debt book, there hasn't been opportunity for you to sort of take advantage of those lower margins?

There's 300 mil that we're about to start looking at in the near future. Then there'll be another tranche in the back half of this calendar year.

Thanks, Tom.

Payout ratio as a percentage of AFFO in the first half?

I'll let Phil answer that.

Okay. You don't actually have to further go to get to 100%?

Nope.

Fair enough. Hey, this future development subject to review of hurdles.

I know you kind of touched on it in your answer to the early questions, but what really instigated this? Is it as simple as the fact that 7% is no longer cut the mustard going forward, is more tenant-led and they don't want to roll out more stores because of the economic environment?

They want to wait and see, you instigated this?

It's none of those things specifically. The way to think about it, Simon, is over the last couple of years, we've recycled assets, and there's roughly been about 100 to 150 bps spread between what we've sold assets for and the yield on cost we've gained out of the development pipeline.

If you look at the valuation gains that we've achieved for the half and what we're probably going to achieve next half, given the way the sector's heading, and the way I would think about it is this: the valuation gains that will come will typically fund within the balance sheet comfortably about 50 mil of developments every year. We still remain within our gearing setting.

We remain growing our earnings, and we remain on the footing that we're at. All we're saying is we're just going to, given the interest rate environment, given the outlook of a couple of interest rate increases possibly coming, possibly not coming, we're just going to reflect on that over the next couple of months.

Let's not assume for 27 that we will be at our run rate for that particular financial year. The assets are performing really well.

The demand is overwhelming given there's such a constraint, groups that are building, and historically we've achieved 8.4 above our 7% hurdle. We'll just assess it project by project.

All we're saying is we continue to be prudent. We're not just going to change this.

That's fair enough. Can't you just keep selling assets and to get that 150 bps spread?

Could be.

Could.

I could do that. I could not do that.

Pretty happy with the portfolio as it is, Simon. There's a lot of earnings coming through the existing book.

Stay tuned. It's all very exciting.

All the stuff you don't want. Would that be a fair comment?

You sell the stuff you don't want. Everything you've got now is core assets or stuff you really like, and you're at the point now where you're reassessing?

That's a good word specifically, but yeah, that's good.

Good morning, team. Thanks for your time.

Perhaps just following pipeline, it looks like Leppington was taken out of the flag FY26 commencements and replaced by those two Coles-anchored centres in HUG. Anything specific that you can comment on around Leppington, please?

Look, it's basically Leppington out for this year, Warilla in. It's basically as simple as that.

In the short term Warilla is going to provide outsized returns to us, similar to what Lutwyche has done, similar to what Marsden Queensland did, what Seven Hills did, what Southlands has done. We just think it was a better place for our capital right now.

Leppington is such a compelling opportunity still, and in the fastest-growing LGA in Australia with tenant demand that's really strong. Leppington still remains a priority for the group.

Warilla just came up and you've got to take these opportunities when they come.

Thanks, Phil. Just second question around management fee down to $13 million from about 14 in the PCP and roughly 14 in the second half of 25.

Anything to call out there?

All that is is the investment into HUG. Richlands was vended into HUG from HTN as part of HTN's contribution to that fund.

It really reflects that investment. There's a skew to the second half on the RE fees.

I think one of the other questions was around the equity accounted investments, the movement there. For the benefit of everyone here, that was in a single-asset syndicate that was wound up, delivered over 17.5% return for its investors.

The movement in McGrath, that's flowing through.

Great. Thanks for your time, guys.

Everyone, thank you. Just a big picture question on capital allocation.

Just given HTN's cost of capital is constrained by its trading discount, what implied cost of equity would management view of buyback as a more accretive risk-adjusted use of capital as opposed to selling assets above book and rotating into higher-risk development opportunities, albeit higher return?

It's a very good question, and it's always under review, but I'm not going to go into those particulars here. Our group's had a track record across its real estate investment trusts that buybacks are not off the table.

We will always consider things.

Okay. Then maybe just, you said given where interest rates are going, with respect to your development pipeline, just can you put how your hurdles are changing in light of long-term real interest rates edging higher?

You've spoken about historically the 100-150 basis point spread. On a risk-adjusted basis, that's pretty thin.

Going forward, you'd be looking for something a little bit higher than that before you can see that ramping back up again.

I don't think that spread is thin because remember, these projects are tenant-demand-led. The income is secured before you start building, and the build's not complicated, right?

We're not building multi-level mega malls, hoping and praying that fashion brands from 1995 are going to come and lease a shop from us. Most of our peers, when they do developments, it's about 5% to 6%, 7% relative to the retail property subsector is really, really strong.

All I'm saying is I'm just going to reflect that the environment is choppy. I'm not saying 7% is the wrong hurdle rate.

It's been the right hurdle rate for a very long time, but things are choppy at the moment. It's just a pause moment, and we'll always look to make sure that every investment we make has the appropriate spread to the long-term bond yields and prevailing cap rates.

Okay. Thanks, guys.

Thanks, Claire.

Look, thank you all for investing the time today and joining us on this call. It's good to see convenience retail now being a sector that's got a lot of interest.

I look forward to catching up with you in the next few days. Thank you so much.