HOME REIT ACQUIRES 156 PROPERTIES FOR £42.4M
5 May 2022
Home REIT plc
("Home REIT" or the "Company")
HOME REIT ACQUIRES 156 PROPERTIES FOR £42.4 MILLION
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 homeless people, announces that it has acquired 156 additional properties (the "Properties") for an aggregate purchase price of £42.4 million (including acquisition costs).
Following the latest tranche of investments, since inception the Company has deployed a total of £0.7 billion at a weighted average net initial yield of 5.86 per cent., ahead of the Company's initial forecast and in-line with the Company's strict investment criteria, providing much needed accommodation for vulnerable homeless people across England and Wales. On 25 January 2022, the Company announced that the net proceeds of its significantly oversubscribed £350 million equity issue in September 2021 had been fully deployed.
The Properties are located across England, providing an additional 603 beds for those in need, whilst bringing the portfolio total to 8,556 and further enhancing its geographic diversification. They are let on an average lease length of 25 years at low and sustainable rents, on new, unbroken, full repairing and insuring leases to seven different specialist registered homeless charities, which each meet the Company's rigorous operational and financial criteria.
As is the Company's purpose, the Properties provide these charities with sought-after long-term security of tenure and therefore much needed stability for their residents, supporting their reintegration into society. The leases are subject to annual upward-only rent reviews, index-linked to the Consumer Prices Index, with an annual collar and cap of 1 per cent. and 4 per cent. respectively. The Company's offer provides significant savings to charities and local authorities versus more expensive alternative accommodation, such as B&Bs, which are short-term and inadequate for the needs of vulnerable homeless people.
Each of the Properties is immediately income producing and, following these transactions, the blended net initial yield of the Company's portfolio is ahead of expectations.
Gareth Jones, Partner at Alvarium Home REIT Advisors Limited, said:
"Since inception we have developed a strong track record for deploying funds available to us efficiently and, more importantly, prudently, using our existing relationships to access suitable investment opportunities off market. This has enabled us to create a significant portfolio of tailored accommodation for homeless people in locations across England and Wales where it is most needed. As this unfortunate situation becomes more critical, we intend to continue to scale and grow the number of beds we can provide to support the alleviation of this pressing societal challenge."
The Company's combined portfolio to date
· High quality, much needed accommodation for vulnerable, homeless people, providing critical housing solutions for people 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-armed forces.
· Low and sustainable rents across the portfolio, providing significant savings to local authorities compared to less suitable alternative accommodation.
· 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 homeless people and a focus on care, support, training and rehabilitation to provide them with the skills and confidence to find long-term accommodation and enable them to reintegrate into society.
· All the rent payable by Home REIT's tenants is funded by support from local and central government.
· Providing 8,556 beds across 1,736 properties.
· Following the acquisition of the Properties, the Company's portfolio is further diversified across 118 different local authorities and 28 tenants, with the following geographical exposures (by asset value):
o London: 15.9%
o North West: 14.7%
o Yorkshire and the Humber: 13.4%
o North East: 13.2%
o East Midlands: 12.5%
o South West: 9.8%
o West Midlands: 8.0%
o South East: 6.4%
o East: 4.9%
o Wales: 1.2%
FOR FURTHER INFORMATION, PLEASE CONTACT:
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Alvarium Home REIT Advisors Limited Jamie Beale Gareth Jones Charlotte Fletcher |
Via FTI Consulting below |
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Alvarium Securities Limited Mark Thompson Eddie Nissen Oliver Kenyon |
+44 (0)20 7016 6711 +44 (0)20 7016 6704 |
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FTI Consulting (Communications Adviser) Claire Turvey Eve Kirmatzis Ellie Perham-Marchant Oliver Harrison |
HomeREIT@fticonsulting.com +44 (0)20 3727 1000 |
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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 are dedicated to providing accommodation to homeless people. The accommodation assets are 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 homeless people and which receive housing benefit or comparable support from local or central government to fund the provision of such accommodation to homeless people.
There is a critical need for further accommodation for homeless people 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 homeless people 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 homeless people 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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