Home REIT hopes to raise £150m in a new placing of shares as it looks to grow its portfolio of homeless accommodation.
The placing price of 115p represents a discount of 5.7% to the closing price of 122p on Friday 13 May 2022 and a 4.7% premium to the 28 February 2022 NAV of 111.2p (adjusted downwards for the interim dividend of 1.37p announced on 5 May 2022).
The group said the proceeds will be used to acquire further homes in line with the company’s strict investment criteria and that are dedicated to providing suitable accommodation for homeless people. It is in advanced legal negotiations on a £300m pipeline of such investment opportunities, with an average net acquisition yield of 5.84%.
Since its launch in October 2020, the company has amassed a portfolio valued at £713.4m (as at 28 February 2022) that provides 8,556 beds to homeless people across the UK, with 28 tenants across England and working closely with 118 local authorities. The fund has delivered a 17% EPRA Net Tangible Assets / NAV total return since launch (to 28 February 2022).
The company said: “Homelessness continues to be an endemic challenge within the UK, a situation which is deteriorating further given rising inflation (particularly the impact on domestic energy costs), feeding through to what has been identified as a cost of living crisis. Since the start of the COVID-19 pandemic a total of 222,360 households have been tipped into homelessness – equivalent to the population of the city of Liverpool. According to government figures, 397 households became homeless every day between July and September 2021. There is an ongoing critical need for suitable accommodation to meet this increasing need and a lack of available and affordable, high-quality, fit-for-purpose homes to address this societal issue in a sustainable way.”
Home REIT history
In October 2020, the company raised gross proceeds of £240m from an initial public offering and was admitted to the premium segment of the Official List of the Financial Conduct Authority and to trading on the premium segment of the Main Market of the London Stock Exchange. It raised a further £350m in September 2021, with the proceeds fully deployed by January 2022.
Alongside investment of the equity raised in October 2020 and September 2021, the company has also been focused on deploying its two debt facilities totalling £250m with Scottish Widows. As at 6 May 2022, the company had drawn down £152m in aggregate from these facilities.
Timeline
The latest date for commitments to the placing is 26 May and the results are due to be announced on the 27 May. If all goes to plan the new shares will be listed on 31 May.
Lynne Fennah, chair of Home REIT, commented:
“This placing will significantly enhance our capacity to invest in the provision of high-quality accommodation for homeless people across the UK at a time of grave necessity. The proceeds will enable us to continue expanding our existing portfolio which is generating inflation-protected income, utilising our strong pipeline of off-market opportunities, and work with our local partners to provide essential long-term support to some of the UK’s most vulnerable people.”
HOME : Home REIT looks to raise £150m