Home REIT makes GBP47.1m of acquisitions
Home REIT, which funds the acquisition and creation of properties across the UK dedicated to providing accommodation for homeless people, has acquired a further 14 separate portfolios of properties located across England for an aggregate purchase price of GBP47.1 million.
The acquisition of these Properties, in combination with those announced previously, represent the full investment of the net proceeds of the Company’s GBP240 million IPO and over 40 per cent of its GBP120 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 per cent.
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 per cent. and 4 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, says: “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.”