A real estate investment trust (REIT) that buys and develops properties for homelessness accommodation has announced an acquisition of £166.4m for 366 properties located across England and Wales.
Home REIT funded the acquisition from its “oversubscribed” £350m equity issue in September this year.
The company said it has a £400m “acquisition pipeline”, which this latest batch of properties has come from after negotiations that began in early 2021.
The property acquisition was in an advanced stage before the equity was raised and responds to specific needs for the local authorities the units are in, Home REIT said.
The acquisition brings 1,850 beds to the firm’s portfolio, bringing its total to just under 5,700, and includes its first acquisitions in Wales.
In its announcement, Home REIT said: “[The properties] are let on an average lease length of 25 years at low and sustainable rents, on new, unbroken, long-term, fully repairing and insuring leases to 12 different specialist registered homeless charities, including three that are new to the tenant base, providing them with sought-after long-term security of tenure.
“The leases are subject to annual upward-only rent reviews, index-linked to the Consumer Prices Index, with an annual collar and cap of one per cent and four per cent respectively.”
The company’s portfolio is now diversified across 92 different local authorities, 23 charities and one housing association, with the majority of its assets based in London.
According to Home REIT, all rent payable by its tenants is funded by support from local and central government.
Jamie Beale, partner at Alvarium Home REIT Advisors, said: “Since announcing the results of its oversubscribed equity issue, the company has been busy responsibly investing the proceeds into the pipeline of properties identified, efficiently deploying a sizeable portion of the funds into a portfolio generating long-term income on sustainable rents.
“Importantly, this latest tranche of properties will enable us to increase the amount of high-quality accommodation we can provide members of society facing homelessness, working alongside our charity partners and local authorities, as we enter the colder months.”