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Home REIT launches open offer to increase capacity

Home REIT aims to raise £262 million for further investment into suitable accommodation for homeless people in the UK. The investment trust has a £400 million active pipeline of acquisition opportunities as it looks to increase its capacity and deliver inflation-protected income and capital growth.

“The initial issue and the acquisition of additional homes that it will enable will further advance the company’s mission as we continue to grow and work even more effectively towards alleviating homelessness across the UK in an affordable and, importantly, sustainable way”, said Lynne Fennah, Chairman, Home REIT.

The investment trust has launched an open offer, an initial discounted share placing, an intermediaries offer and offer for subscription and placing programme. It will issue 240.6 million new ordinary shares at 109 pence a share, representing a 4.4% discount to Friday’s closing of 114 pence. In case of increased demand, the company could increase the size of the initial issue to 321.1 million new shares.

The investment trust is seeking to fund the acquisition and creation of accommodation for homeless people in the UK, while also targeting capital returns. The properties will be let on long leases, of around 20 to 30 years, to registered charities, housing associations, community interest companies and other regulated organisations.

Home REIT launched a successful IPO in October 2020, raising £240 million. Since then it has built a £328 million portfolio, which has been independently valued by Knight Frank. It has delivered a 8.5% EPRA net tangible assets/net asset value total return to shareholders since the launch.

“We have continued to meet our objectives, ensuring a positive social impact for some of the most vulnerable members of society, while also delivering a strong performance on behalf of our investors, remaining well on track to reach our dividend target”, said Jamie Beale, partner, Alvarium Home REIT Advisors.

The investment trust works with 21 tenants and 81 local authorities and it provides over 3,800 beds to homeless people, including women fleeing domestic violence, people leaving prison, foster care leavers, drug and alcohol addicts and people with mental health issues.

In the last two months alone the company has acquired or unconditionally exchanged on 10 portfolios comprising 108 properties across England which are let at low and sustainable rents of £91 a week on average.