Acquisitions

RNS Number : 6371A

Home REIT PLC

03 June 2021

 

3 June 2021

HOME REIT plc

("Home REIT" or the "Company")

ACQUISITIONS FOR A COMBINED PURCHASE PRICE OF £47.1 MILLION

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 for homeless people, is pleased to announce that the Company has acquired a further 14 separate portfolios of properties located across England (the "Properties") for an aggregate purchase price of £47.1 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 and over 40% of its £120 million 12-year debt facility, the remainder of which has been fully allocated to further identified properties. The Company's combined portfolio comprises 603 properties, which can accommodate over 3,330 people and represents a weighted average net initial acquisition yield of 5.8%.

The high-quality Properties add a further 314 beds across 31 properties, providing much needed accommodation for vulnerable homeless people in London, North West, East, East and West Midlands, South East and South West regions of England. The 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 1%. and 4%., 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 :

"The Company has continued to responsibly deliver on its objectives and perform strongly since its IPO in October 2020, achieving significant on the ground positive social impact whilst driving attractive sustainable returns to our shareholders. We are providing critically needed high quality accommodation to those at risk of homelessness, let at low, sustainable rents to our specialist registered tenant partners, who are proven to make a difference to the people they house, care for and support.

Our track record of prudent deployment into attractive sustainable assets provides a strong platform for future growth and we look forward to driving further value for all our stakeholders and delivering a positive social impact for some of the most vulnerable members of society."

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 and women.

· Low and sustainable average weekly rents of £94 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 3,330 people in 603 properties.

· Following the acquisition of the Properties, the Company's portfolio is diversified across 77 different local authorities and 20 tenants (19 charities and one housing association), with the following geographical exposures (by asset value):

o London: 21.8%

o South West: 13.5%

o East Midlands: 12.9%

o North East: 11.9%

o North West: 11.2%

o West Midlands: 11.0%

o South East: 6.7%

o Yorkshire and the Humber: 5.6%

o East: 5.4%

FOR FURTHER INFORMATION, PLEASE CONTACT:

Alvarium Home REIT Advisors Limited Jamie Beale Gareth Jones	Via Maitland/AMO below
Alvarium Securities Limited Mark Thompson Eddie Nissen Oliver Kenyon		[phone] [phone] [phone]
Maitland/AMO (Communications adviser) James Benjamin	[phone] [e-mail]

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 homeless people 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 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 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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