Home REIT IPO
Intermediary offer
  • Offering Type: IPO
  • Offer: £250m
  • Offer Price: 100p
  • Minimum investment size: Targeting a minimum of 5.5% pa dividend.

About Home REIT

Home REIT is exclusively dedicated to tackling homelessness in the UK.It is targeting an initial fundraise of £250m that it will use to acquire and create a portfolio of homeless accommodation, bringing new supply to meet significant demand and deliver critical social impact.

Social impact
  • Over 320,000 people sleeping rough, in homeless shelters or other temporary housing in Great Britain
  • In England a household became homeless every four minutes
  • Focus on training and rehabilitation at the properties to provide individuals with the skills and confidence to reintegrate back into society
  • Obligation for local authorities to secure accommodation for homeless from 2018 legislation
  • Significant savings to local authorities via lower rents and better quality accommodation versus expensive alternatives eg bed & breakfast
Long and secure income
  • Inflation-protected income and capital returns underpinned by a portfolio of secure real estate assets with a low spread to vacant possession value
  • Strong residual value by virtue of their city/town centre locations, alternative use (PRS and student) and low rents (c. £100 per week)
  • Assets are let on long-term, index-linked FRI leases (typically, 25 years) to specialist Housing Associations and registered charities
  • Secure income is funded by statutory protected housing benefit paid directly to the Housing Association tenants from the relevant Local Authority
  • Targeting minimum 5.5% pa dividend and 7.5%+ pa total net return, with dividend to grow in line with inflation
Track record
  • To execute Runs the largest homeless accommodation private fund in Europe with £430m deployed into this strategy, creating over 3,500 beds
  • 100% of transactions were acquired off-market via established industry relationships
  • 5.75% av. acquisition yield v’s 5.35% av. valuation yield
Pipeline and deployment
  • Strong immediate pipeline of about £200m of off-market assets to allow rapid deployment (within at most 6 months)
  • Medium term NAV expectation of £750m to £1bn
Others
  • Prudent gearing, with a maximum of 35%
  • Fees will be scaled – starting at 0.85% and reducing to 0.65% over £750m
Use of Proceeds
  • To fund acquisition
  • Working capital
Risks*
  • There is no guarantee the group will meet its dividend target or be able to pay a dividend at all
  • The group may be unable to acquire identified projects in the pipeline or deploy capital in the anticipated timeframe
  • The companys due diligence mat not identify all the risks and liabilities in respect to an acquisition
  • Concentration risk- the groups performance is linked to the property market and UK economy
  • Regulatory risk
  • Brexit risk
  • The company is subject to the risk of a tenant defaulting
  • The groups investments are illiquid and maybe difficult or impossible to realise at a particular time
  • Forward funded projects possess a degree of risks associated with construction and development
  • Other risks associated with Real Estate Investment Trusts
  • Other risks associated with LSE listed stocks
Conflict of Interest

Pello Capital are receiving remuneration for their participation in this fundraise.


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Important Information

Minimum Investment

The minimum investment is £1,000 with no maximum. Please ensure that you have available funds allocated in your account before you make your subscription.

UK Domiciled

To participate in this offer you must be domiciled in the United Kingdom, the Channel Islands or the Isle of Man.

To Apply

To invest into this offer you must have an account with Pello Capital. The process is easy and you can click log in or sign up to be taken to our application page.

Allocation

Following your application at the end of the open offer period we will settle the bargain for you and allocate your shares. If there is excessive demand for the shares and it is oversubscribed, you may be allocated a smaller amount than you requested. We will credit the difference to your account.

Trading

Conditional trading can happen following the allocation of shares in this issue.

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