Alvarium Investments is planning to list a new REIT on the London Stock Exchange dedicated to providing accommodation to the homeless, with a £250m initial raise.
Home REIT is thought to be the first listed company dedicated to housing the homeless. It is targeting total shareholder returns of at least 7.5% per annum over the medium term, as well as a minimum 5.5p annual dividend yield from September 2021.
Properties will be let on inflation-linked leases of 20 to 30 years. These will be let or prelet to registered charities, housing associations, community interest companies and other regulated organisations that receive housing benefit or comparable funding from local or central government.
Alvarium Home REIT Advisors, its investment adviser, has identified a number of properties with an aggregate value of more than £350m. It has already begun negotiations for the acquisitions.
Net proceeds from the issue are expected to be invested or committed within six to nine months following admission.
The REIT, which has the support of charity Shelter, will be the first to float on the LSE since 2018.
Its board will be chaired by Lynne Fennah, chief financial officer of Empiric Student Property.
Fennah said: “We believe a significant investment opportunity now exists in the UK homeless accommodation asset market and the Alvarium team has already identified a substantial pipeline of homeless accommodation assets that we, and the Alvarium team, consider are at low and sustainable rent levels.
“We aim to be part of the solution to the homelessness crisis in the UK, drawing on the Alvarium team’s sector specialist expertise to achieve our objective of delivering secure inflation-protected income and capital returns to shareholders, whilst delivering a positive social impact.”
Gareth Jones, partner at Alvarium Home REIT Advisors, said: “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 the homeless is limited in quantum and often sub-standard and uneconomical.
“Home REIT plc will seek to capitalise on Alvarium’s specialist knowledge, strong relationships and insights to secure high-quality homeless accommodation assets on a largely off-market basis and help to alleviate the homeless crisis in the UK.”
Alvarium Investments has some $7bn (£5.2bn) of real estate assets under management.
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