LONDON: The Board of Home REIT plc, which funds the acquisition and creation of high-quality properties across the UK that are dedicated to providing accommodation to the homeless, has acquired a portfolio of five properties located across the North West, North East and Midlands regions of England.
The Properties are recently completed and purpose-built to provide high quality accommodation to vulnerable, homeless people in need of housing, with four of the homes housing women fleeing domestic violence and the fifth home accommodating people leaving prison.
The aggregate purchase price for the Properties is £9 million (including acquisition costs) and each property is immediately income producing, with net initial yields in line with the Company’s target level.
Each of the Properties is let at a low and sustainable rental level, averaging £75 per person per week, on new, unbroken 25-year full repairing and insuring (FRI) leases to specialist registered homeless charities, providing the charities with long term security of tenure.
The charities, regulated by the Charities Commission, will provide specialist care, training, support and rehabilitation to the vulnerable homeless people at the Properties.
The rents received under these leases are subject to annual upward-only rent reviews, index-linked to the Consumer Prices Index, subject to an annual cap and collar of 1% and 4%, respectively.
The acquisition of these Properties will enable the Company to become a UK Real Estate Investment Trust (REIT).
The Company is in advanced legals on a significant pipeline of assets to allow for an efficient deployment of its IPO capital, with further acquisition announcements expected to be made in short order.
Gareth Jones, Partner at Alvarium Home REIT Advisors Limited, said: “We are pleased to announce the first investments for Home REIT plc and to be investing in high quality accommodation to house vulnerable, homeless individuals in need of housing. The Properties are located in areas where there is a critical need for more homeless accommodation. Each of the Properties is let on low and sustainable rents to a registered charity with a proven operating track record in providing accommodation to the homeless and which receives housing benefit or comparable support from local or central government.”