NEW 15-YEAR TERM £130 MILLION DEBT FACILITY AGREED
02 December 2021
Home REIT plc
("Home REIT" or the "Company")
NEW 15-YEAR TERM £130 MILLION DEBT FACILITY AGREED
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 homeless people, announces that it has finalised an additional £130 million interest-only debt facility with Scottish Widows.
This new facility has been secured on a 15-year term with a low fixed all-in rate of 2.53 per cent. per annum for the duration of the facility. The margin charged on this facility is five basis points lower than that of the Company's existing £120 million facility, also with Scottish Widows. When the new facility is drawn, this competitive rate will be highly accretive to the Company's average net initial property yield, whilst mitigating potential interest rate risk for the 15-year period.
The Company is targeting a conservative level of gearing, with a maximum level of aggregate borrowings of 35 per cent. of the Company's gross assets at the time of drawdown of the relevant borrowings. The Company reiterates its minimum targeted annual dividend of 5.5 pence per Ordinary Share from the financial period commencing 1 September 2021 and a targeted NAV total return of a minimum of 7.5 per cent. per annum over the medium term.
Gareth Jones, Partner at Alvarium Home REIT Advisors Limited, said:
"Scottish Widows' decision to provide Home REIT with further funding is a strong endorsement of our strategy and will be instrumental in supporting our growth ambitions as well as our purpose of helping to alleviate homelessness in the UK. Our acquisitions programme remains on track and we continue to focus on deploying the remaining proceeds of the recently oversubscribed equity placing."
Neil McHugh Associate Director of Loan Investments at Scottish Widows, added:
"The additional long-term funding we are providing to Home REIT will help increase the provision of high quality accommodation for people facing homelessness. Housing is a key focus for Scottish Widows and we are very pleased to be able to once again show our support to Home REIT."
FOR FURTHER INFORMATION, PLEASE CONTACT:
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Alvarium Home REIT Advisors Limited Jamie Beale Gareth Jones |
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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