Home REIT has deployed the remaining £55.1 million of the proceeds raised in the company’s significantly oversubscribed £350 million equity issue in September 2021(Initial Issue).
The company has acquired 240 additional properties for an aggregate purchase price of £55.1 million (including acquisition costs).
Following the latest tranche of investments, the entire £343 million net proceeds of the Initial Issue has now been deployed at a weighted average net initial yield of 5.9 per cent., ahead of the company’s pipeline forecast as disclosed during the Initial Issue and in-line with the company’s strict investment criteria, providing much needed accommodation for vulnerable homeless people across England and Wales.
The properties are located across England, providing 880 beds for those in need, whilst bringing the portfolio total to 7,953 and further enhancing its geographic diversification. 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, which each meet the company’s operational and financial criteria.
As is the company’s purpose, the properties provide these charities with sought-after long-term security of tenure and therefore much needed stability for their residents, supporting their reintegration into society, said Home REIT.
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. The Company’s offer provides significant savings to charities and local authorities versus more expensive alternative accommodation, such as B&Bs, which are short-term and inadequate for the needs of vulnerable homeless people.
Jamie Beale, Partner at Alvarium Home REIT Advisors Limited, said: “Having fully deployed the net proceeds of the Initial Issue in a short period of just over three months, we are very pleased to have met the targets we set ourselves at the time. Our portfolio of nearly eight thousand beds contributes to combating the endemic challenge of homelessness in the UK by offering stable and supportive environments to some of the most vulnerable people in society. We continue to maintain a strong pipeline of opportunities that meet the requirements of our distinct strategy and look forward to updating our investors shortly regarding the deployment of the Company’s debt facility.”
