Acquisitions Update

RNS Number : 6637M

Home REIT PLC

25 January 2021

 

25 January 2021

HOME REIT plc

("Home REIT" or the "Company")

ACQUISITIONS UPDATE

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 high quality properties located across England (the "Properties") for an aggregate purchase price of £69.5 million (including acquisition costs).

The Company has now deployed over £184 million of total capital since its IPO, representing 78 per cent. of the net proceeds raised at IPO. The Company is in advanced negotiations on a significant pipeline of attractive assets to allow for the efficient deployment of its remaining IPO proceeds (c. £48 million) and the recently announced debt facility (£120 million), in-line with expectations.

The high quality Properties add a further 798 beds across 171 properties, providing much needed accommodation for the vulnerable homeless people in Yorkshire and the Humber, the East Midlands, the South West, London, the South East, the West Midlands, and the North West. The Properties are let at a low and sustainable rental level, on new, unbroken, long term, full repairing and insuring ("FRI") leases to eight different specialist registered homeless charities and one specialist housing association, providing them with long term security of tenure. 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 carefully deployed over 75 per cent. of the net IPO proceeds in the three months since our IPO. Our combined portfolio provides much-needed high quality accommodation, housing c. 2,500 vulnerable homeless people across the UK. 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. All the rent payable by our tenants is funded by support from local and central government.

We are also delighted to announce that Home REIT has become an official foundation partner of LandAid, the property industry charity. It has over 30 years' experience helping young homeless people across the UK and we are excited to be joining forces and uniting behind its mission to end youth homelessness."

The Company's combined portfolio to date

· Low and sustainable average weekly rents of £84 per week.

· All the rent payable by Home REIT's tenants is funded by support from local and central government.

· 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.

· 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.

· Housing c. 2,500 people in 489 properties.

· Following the acquisition of the Properties, the Company's portfolio is diversified across 52 different local authorities and 14 different tenants, with the following geographical exposures (by asset value):

o East Midlands: 18.7%

o North East: 17.0%

o West Midlands: 15.1%

o North West: 13.4%

o London: 8.8%

o Yorkshire and the Humber: 8.5%

o South West: 7.2%

o East: 6.2%

o South East: 5.1%

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 / Rhys Jones	[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 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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