Home REIT plc, 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 a further £60.2 million of the proceeds raised in the Company’s significantly oversubscribed £350 million equity issue in September 2021 (the “Initial Issue”).

£289.1 million of the net proceeds of the Initial Issue has now been deployed at a weighted average net initial yield of 5.9 per cent., meaning progress is in line with the Company’s pipeline forecast as disclosed during the Initial Issue, and in accordance with the Company’s strict investment criteria, providing much needed accommodation for vulnerable homeless people across England and Wales. 

Since its announcement of 11 November 2021, the Company has acquired an additional 20 portfolios comprising 89 properties (the “Properties”) for an aggregate purchase price of £60.2 million (including acquisition costs).

The Properties, which are located across England, provide 548 beds for those in need, bringing the portfolio total to 7,073 beds, whilst also further enhancing the geographic diversification of the portfolio. 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 10 different specialist registered homeless charities, who each meet the Company’s operational and financial prerequisites. The homes provide these charities with sought-after long-term security of tenure and therefore much needed stability for their residents. 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, while also providing significant savings on 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 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:

“In just over a year since inception, we have established Home REIT as a credible and effective solution to what is sadly an endemic challenge in the UK. Following these most recent acquisitions, we are providing 7,073 beds which offer a stable, supportive and safe environment to some of the most vulnerable people, who are now able to work with our charity partners to reintegrate back into society long term. Alongside this important social impact, we are meeting our targets for our investors, with deployment in line with our expectations, and therefore are pleased with the way we’re positioned as this year comes to a close.”

The Company’s combined portfolio to date

  • Let to registered charities, housing associations, community interest companies and other regulated organisations, which have a proven operating and financial 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.
  • Providing 7,073 beds across 1,340 properties.
  • Following the acquisition of the Properties, the Company’s portfolio is further diversified across 110 different local authorities and 26 tenants, with the following geographical exposures (by asset value):
    • London: 18.0%
    • Yorkshire and the Humber: 14.6%
    • East Midlands: 13.5%
    • South West: 10.9%
    • North East: 10.4%
    • North West: 9.8%
    • West Midlands: 8.5%
    • South East: 7.4%
    • East: 5.7%
    • Wales: 1.3%