Alvarium Investments is targeting a £250m launch for a real estate investment trust designed to tackle homelessness in the UK.
Home Reit, which is slated to list on the London Stock Exchange by mid-October, will invest in a diversified portfolio of assets across the UK that provide accommodation to the homeless that are let or pre-let by charities, housing associations, community interest companies and other regulated businesses.
It will target a minimum total return of 7.5% per annum over the medium term and an annual dividend yield of at least 5.5%.
The investment company will be managed by Alvarium Fund Managers and advised by Alvarium Home Reit Advisors, subsidiaries of Alvarium Investments, which currently looks after $7bn of real estate assets.
Home Reit chairman Lynne Fennah said there is a “significant opportunity” to invest in the UK homeless accommodation market and that the team had already identified a “substantial pipeline” of assets that are at low and sustainable rent levels.
London-based charity Shelter estimates that over 320,000 Britons are sleeping rough, in homeless shelters or other temporary housing, a situation which national homelessness charity Crisis has dubbed a “national emergency”.
“We aim to be part of the solution to the homelessness crisis in the UK, drawing on the Alvarium team’s sector specialist expertise to achieve our objective of delivering secure inflation-protected income and capital returns to shareholders, whilst delivering a positive social impact,“ Fennah said.
The trust’s assets will typically have longer leases of 20 to 30 years and are index-linked. They will reflect a wide range of sub-sectors within homelessness like women fleeing domestic violence, people leaving prison, individuals suffering from mental health or drug and alcohol issues and foster care leavers.
Home Reit will have a tiered fee structuring, charging 0.85% of net asset value up to £500m, 0.75% of NAV up to £750m and 0.65% on NAV above £750m. It will not charge a performance fee.
