Investment trust insider on social housing – James Carthew: Time for good social housing Reits to grow
One bit of good news last week was that Home Reit (HOME) is ready to expand again. The trust, which launched last October, has invested all of the £240m it raised at its flotation, plus the £60m it borrowed. It has deals lined up to deploy a further £60m of debt to reach its target 50% gearing (33% loan to value).
What this represents in practice is homes for 3,648 formerly homeless people in 643 properties around the UK. The rents, which average £90 per week, are covered by a range of charities, housing associations and community interest companies. These in turn get funding for this purpose from local and central government. Investors (of which I am one) get an attractive dividend yield.
The hotel accommodation offered to the homeless during last year’s lockdown changed some lives for the better. However, it was a temporary measure. Funds such as Home Reit can provide a more permanent solution.
The more money Home Reit can raise, the more people it can help. However, fortunately it isn’t the only trust operating in this field. In recent months, the £722m Civitas Social Housing (CSH) real estate investment trust, which I also hold, has partnered with Barnet Council in North London to repurpose three properties into specialist accommodation for the homeless. Altogether, the three projects should provide around 90 beds. Barnet Council paid Civitas income during the refurbishment period.
One of the three properties is a 42-bed former supported living facility for people with mental health needs in Golders Green. The idea is that… read more here