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RNS Number : 0161S
Home REIT PLC
11 November 2021
11 November 2021
Home REIT plc
("Home REIT" or the "Company")
FURTHER GBP63 MILLION DEPLOYED FOLLOWING SEPTEMBER EQUITY
ISSUE
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 homeless people,
announces that it has deployed a further GBP62.6 million of the
proceeds raised in the Company's significantly oversubscribed
GBP350 million equity issue in September 2021 (the "Initial
Issue").
GBP229 million of the net proceeds of the Initial Issue has now
been deployed at a weighted average net initial yield of 5.91 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.
Since its announcement of 18 October 2021, the Company has
acquired an additional 19 portfolios comprising 173 high quality
properties located across England (the "Properties") for an
aggregate purchase price of GBP62.6 million (including acquisition
costs).
The Properties add 829 beds to the portfolio, bringing the total
to over 6,500, 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 12 different specialist
registered homeless charities, providing them 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.
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 have now deployed around 65% of the proceeds raised in
September, which reflects the continual work that our team puts
into identifying suitable properties and the deep network of
relationships that we can access to build our pipeline of
investment opportunities. As the need for accommodation for
homeless people becomes ever more pressing in the wake of the
pandemic, we're pleased with the momentum that we have been able to
build behind our deployment, while maintaining our purposeful and
responsible approach to investment."
The Company's combined portfolio to date
-- High quality, much needed accommodation for vulnerable,
homeless people, providing critical housing solutions for people
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-armed forces.
-- Low and sustainable rents, providing significant savings to
local authorities compared to less suitable alternative
accommodation
-- 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.
-- All the rent payable by Home REIT's tenants is funded by
support from local and central government.
-- Housing 6,525 people in 1,251 properties.
-- Following the acquisition of the Properties, the Company's
portfolio is further diversified across 102 different local
authorities and 25 tenants, with the following geographical
exposures (by asset value):
o East Midlands: 14.3%
o London: 14.1%
o Yorkshire and the Humber: 14.1%
o North East: 11.6%
o North West: 10.8%
o South West: 10.8%
o West Midlands: 9.3%
o South East: 8.0%
o East: 6.0%
o Wales: 1.0%
FOR FURTHER INFORMATION, PLEASE CONTACT:
Alvarium Home REIT Advisors Limited Via FTI Consulting below
Jamie Beale
Gareth Jones
Alvarium Securities Limited
Mark Thompson +44 (0)20 7016 6711
Eddie Nissen +44 (0)20 7016 6713
Oliver Kenyon +44 (0)20 7016 6704
FTI Consulting (Communications HomeREIT@fticonsulting.com
Adviser) +44 (0)20 3727 1000
Claire Turvey
Eve Kirmatzis
Ellie Perham-Marchant
Oliver Harrison
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 are dedicated to providing accommodation to homeless
people. The accommodation assets are 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 homeless people and which
receive housing benefit or comparable support from local or central
government to fund the provision of such accommodation to homeless
people.
There is a critical need for further accommodation for homeless
people 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 homeless people 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 homeless people 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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