Contributing to the alleviation of homelessness in the UK, whilst targeting inflation protected income and capital returns, by investing in a diversified portfolio of assets across the UK which will provide good quality accommodation to the homeless.
Results released on
- In October 2020, Home REIT plc (the “Company”) raised gross proceeds of £240 million in its initial public offering (‘IPO’), the largest REIT IPO of the year. The Company is listed on the premium segment of the Official List of the Financial Conduct Authority and was admitted to trading on the main market for listed securities of the London Stock Exchange on 12 October 2020.
- The net asset value (“NAV”) and EPRA NTA per ordinary share (“Share”) has increased to 102.8 pence as at 28 February 2021, an increase of 4.9% from the 98.0 pence (after share issue expenses) at the time of the Company’s IPO in October 2020, reflecting:
- Collaboration with Crisis: Alvarium Home REIT Advisors is proud to be working in collaboration with Crisis to help support Crisis in ending homelessness.
- the discount achieved on off market acquisitions; early mover advantage in this sector;
- and yield compression in the wider long-lease sector.
- The Company and its subsidiaries (the “Group”) acquired investment properties within the period, which were independently valued on 28 February 2021 at £243 million, representing an increase of approximately 4.32% above the aggregate acquisition price (including acquisition costs). The properties have been valued on an individual basis. No portfolio premium has been applied.
- Profit before tax for the period of £11.4 million.
- Long term 12-year debt of £120 million secured with Scottish Widows at an all-in fixed rate of 2.07% per annum for the term, that will translate to a maximum LTV of 35% at full equity and debt deployment, in line with its target set at IPO. This provides a wide spread (376 basis points) between the current average net initial property purchase yield of 5.83% and the 2.07% per annum fixed rate.
- Net IPO proceeds fully deployed within five months, ahead of the Company’s stated target at launch.
- Low and sustainable average weekly rents of £86.
- 3,019 beds provided across 572 properties.
- The average building size comprises 5 bed spaces and is either a house or small apartment block.
- Assets are broadly diversified across different sub sectors within homeless accommodation ranging from drug and alcohol abuse, domestic abuse, prison leavers, general needs poverty and those with mental health issues.
- 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. They also provide care, support, training and rehabilitation at the properties to provide vulnerable homeless people with the skills and confidence to reintegrate back into society.
- As per the structure highlighted on the diagram on page 10, all of the rent payable by Home REIT’s tenants is funded by support from local and central government.
- The portfolio is 100% let and income producing.
- The Company has not seen any impact to its own rent collection levels as a result of the Covid-19 pandemic and rates of recovery through the period were 100%.
- Attractive average net initial property yield of 5.83% (including acquisition costs).
- Long weighted average unexpired lease term (“WAULT”) of 25 years.
- 100% of the income is index-linked.
- Significant geographic diversification across 66 different local authorities in the UK.