Home REIT adds 998 beds to portfolio for £92.3m
4 July 2022
Home REIT plc
("Home REIT" or the "Company")
HOME REIT ADDS 998 BEDS TO ITS PORTFOLIO WITH £92.3 MILLION OF ACQUISITIONS
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 deployed £84.9 million of the net proceeds raised in the Company's significantly oversubscribed £263 million equity issue in May 2022 (the "Subsequent Placing").
In just over one month following the Subsequent Placing, the Company has acquired 183 additional properties (the "Properties") located across England for an aggregate purchase price of £84.9 million (including acquisition costs).
The purchase of the Properties was made from the Company's attractive c. £300 million acquisition pipeline, which has been under due diligence and legal negotiation since earlier this year. This pipeline was in an advanced stage of preparation ahead of the equity raise and assembled through the Investment Adviser's deep network of relationships, according to the specific need within each local authority area.
In addition to this, the Company acquired 33 additional properties located in England for an aggregate purchase price of £7.4 million (including acquisition costs) shortly prior to the Subsequent Placing.
The Properties and earlier acquisitions referenced directly above have added a further 998 beds for people in need of housing to the portfolio, bringing the portfolio total to 9,554 and further enhancing the Company's geographic diversification. The acquisitions adhered to the Company's strict investment criteria, providing much needed accommodation for vulnerable homeless people across England. They are let on an average lease length of 25 years at low and sustainable rents, on new, unbroken, long term, full repairing and insuring leases to specialist registered homeless charities, providing them with sought-after long-term security of tenure. 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.
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 initial expectations.
Gareth Jones, Partner at Alvarium Home REIT Advisors Limited, said :
"These acquisitions add high quality beds to our growing portfolio, which is consistent with our strategy of providing fit for purpose accommodation for people in the community facing homelessness. These transactions represent swift deployment of the equity we raised in an oversubscribed fundraise at the end of May into assets producing long-term, sustainable income. We continue to work closely with our tenant partners, who provide holistic support packages to the residents in our portfolio, to source accommodation in the areas where the need is most acute."
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 9,554 beds across 1,951 properties.
· Following the acquisition of the Properties, the Company's portfolio is further diversified across 126 different local authorities and 28 tenants, with the following geographical exposures (by asset value):
o London: 15.0%
o North West: 14.8%
o Yorkshire and the Humber: 14.0%
o North East: 12.8%
o East Midlands: 11.1%
o South West: 9.4%
o South East: 8.0%
o West Midlands: 7.4%
o East: 6.5%
o Wales: 1.0%
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) Dido Laurimore 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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