Home REIT has paid £57.4 million for 158 additional properties located across England.
These acquisitions were funded by the net proceeds raised via the company’s oversubscribed £263 million equity issue in May 2022, of which the company has now deployed a total of £227 million (88 per cent.) of the proceeds.
The properties have added a further 711 beds for those in need to the portfolio, bringing the portfolio total to 11,131 and further enhancing the company’s geographic diversification.
They are let on an average lease length of 25 years at low and sustainable rents, on new, unbroken, long-term, full repairing and insuring leases to specialist registered homeless charities and community interest companies, providing them with sought-after long-term security of tenure.
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.
”Each of the properties is immediately income producing and, following these transactions, the blended net initial yield of the company’s portfolio is ahead of expectations,” the REIT said.
Gareth Jones, Partner at Alvarium Home REIT Advisors Limited, said: “These acquisitions add high-quality beds to our expanding portfolio and are aligned with our strategy to provide tailored and fit-for-purpose accommodation for people across the UK facing homelessness. The transactions build on our strong track record of deploying funds swiftly and efficiently to secure assets that offer long-term sustainable income. As the societal challenge around homelessness becomes sadly more critical, we continue to source opportunities to grow the number of beds we can provide to help areas where this need is particularly acute.”