Acquisitions-Full Equity Deployed-Pipeline Update
8 March 2021
HOME REIT plc
("Home REIT" or the "Company")
ACQUISITIONS FOR A COMBINED PURCHASE PRICE OF £48.1 MILLION
FULL DEPLOYMENT OF EQUITY
PIPELINE OF INVESTMENTS TO BE MADE UTILISING £120 MILLION DEBT FACILITY
The Board of Home REIT plc (ticker: HOME), which funds the acquisition and creation of high-quality properties across the UK that are dedicated to providing accommodation to the homeless, is pleased to announce that the Company has acquired a further 11 separate portfolios of properties located across England (the "Properties") for an aggregate purchase price of £48.1 million (including acquisition costs).
The acquisition of these Properties, in combination with those announced previously, represent the full investment of the net proceeds of the Company's £240 million IPO on 12 October 2020. The Company's combined portfolio comprises 572 completed or unconditionally exchanged properties, representing a weighted average net initial acquisition yield of 5.83 per cent.
The Company has significant remaining resources available through its previously announced 12-year £120 million debt facility, allowing it to continue to make further investments.
The Properties add a further 543 beds across 83 properties in London, North East, North West, South East, South West and West Midlands regions of England. The high quality Properties are let at a low and sustainable rental level, on new, unbroken, long term, full repairing and insuring ("FRI") leases to seven different specialist registered homeless charities, providing them with long term security of tenure, which the Investment Adviser believes is crucial to rehabilitating vulnerable individuals and helping to break the cycle of homelessness seen in short term accommodation. The rents received under these leases are subject to annual upward-only rent reviews, index-linked to the Consumer Prices Index, subject to an annual collar and cap of one per cent. and four per cent., respectively.
Each of the Properties is immediately income producing and the blended net initial yield of the Company's portfolio following the acquisition of the Properties is ahead of expectations.
Jamie Beale, Partner at Alvarium Home REIT Advisors Limited, said :
"We are pleased to have exceeded expectations since listing on 12 October 2020 by fully and prudently deploying the net proceeds of our successful IPO within only five months. This compelling track record of careful deployment provides a strong foundation for future growth and we look forward to updating the market on further acquisitions to be made utilising the Company's low cost, long term £120 million debt facility.
We have an attractive pipeline of acquisitions that will enable us to continue to deliver a positive social impact for some of the most vulnerable members of society, through providing critically needed accommodation to those at risk of homelessness, let at low, sustainable rents to our tenant partners, who are proven to make a difference to the people they house, care for and support."
The Company's combined portfolio to date
· High quality, much needed accommodation for vulnerable, homeless people, providing critical housing solutions for women fleeing from domestic abuse, those faced with homelessness due to poverty, people suffering from drug and alcohol abuse and mental health issues, prison leavers and ex-servicemen.
· Low and sustainable average weekly rents of £86 per week
· Let to registered charities, housing associations, community interest companies and other regulated organisations, which have a proven operating track record in providing low-cost accommodation to the homeless and a focus on care, support, training and rehabilitation to provide vulnerable homeless people with the skills and confidence to find long-term accommodation and enable them to reintegrate back into society.
· All the rent payable by Home REIT's tenants is funded by support from local and central government.
· Housing over 3,000 people in 572 properties.
· Following the acquisition of the Properties, the Company's portfolio is diversified across 66 different local authorities and 17 tenants (15 charities and two housing associations), with the following geographical exposures (by asset value):
o South West: 15.3%
o East Midlands: 14.8%
o North East 14.3%
o West Midlands: 13.1%
o London: 12.0%
o North West: 11.8%
o South East: 7.0%
o Yorkshire and the Humber: 6.8%
o East: 4.9%
FOR FURTHER INFORMATION, PLEASE CONTACT:
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Alvarium Home REIT Advisors Limited Jamie Beale / Gareth Jones |
Via Maitland/AMO below |
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Alvarium Securities Limited Mark Thompson Eddie Nissen Oliver Kenyon |
+44 (0)20 7016 6711 +44 (0)20 7195 1448 |
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Maitland/AMO (Communications adviser) James Benjamin |
+44 (0)7747 113 930 homereit-maitland@maitland.co.uk |
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The Company's LEI is: 213800A53AOVH3FCGG44.
For more information, please visit the Company's website: www.homereituk.com
About Home REIT plc
Home REIT plc seeks to contribute to the alleviation of homelessness in the UK, whilst targeting inflation-protected income and capital returns, by funding the acquisition and creation of a diversified portfolio of high-quality accommodation assets across the UK which will be dedicated to providing accommodation to the homeless. The accommodation assets will be let or pre-let on very long (typically 20 to 30 years) leases, containing inflation-linked or fixed uplift rent review provisions, to registered charities, housing associations, community interest companies and other regulated organisations which have a proven operating track record in providing low-cost accommodation to the homeless and which receive housing benefit or comparable support from local or central government to fund the provision of such accommodation to the homeless.
There is a critical need for further accommodation for the homeless in the UK, due to an increasing homeless population and a lack of available and affordable high-quality, fit-for-purpose stock to address the problem. Local housing authorities are under a statutory duty to secure accommodation for individuals who are unintentionally homeless and in priority need but current accommodation for the homeless is limited in quantum and often sub-standard and uneconomical.
The Company focuses on investing in and creating well-located properties that provide a sustainable level of rent for the tenant. Within the homeless accommodation assets, there is a focus on care, support, training and rehabilitation to provide vulnerable homeless people with the skills and confidence to find long-term accommodation and enable them to reintegrate back into society. Savings are expected to be made to local authorities and other providers of accommodation to the homeless via lower rents versus more expensive alternative accommodation.
The Company is listed on the premium segment of the Official List of the UK Financial Conduct Authority and its Ordinary Shares were admitted to trading on the main market of the London Stock Exchange, premium segment, on 12 October 2020.
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