London real estate investment trust deploys £60m for homeless accommodation

London headquartered real estate investment trust Home REIT PLC announced it has deployed a further £60.2 million of the proceeds raised in the company’s oversubscribed £350m equity issue in September 2021.

£289.1m 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.

This is also 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 November 2021 11, the company has acquired an additional 20 portfolios comprising 89 properties for an aggregate purchase price of £60.2 million.

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 leases are subject to annual upward-only rent reviews, index-linked to the Consumer Prices Index, with an annual collar and cap of one and four per cent respectively, while also providing savings on 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: “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.”

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