Responsible Housing REIT is targeting a listing on the main market of the London Stock Exchange to raise £250 million to invest into a diversified portfolio of supported housing accommodation across the UK.
In its intention to float announcement the group said it would deliver a sustainable income with low volatility to investors, underpinning a minimum 5% dividend yield target with a total NAV return target of a minimum of 7.5% per annum over the medium term. Publication of the results of the share issue and the admission of ordinary shares was expected by the end of September.
The REIT is seeking to acquire and develop assets to address a lack of quality accommodation for supported residents across a number of care sectors. According to the group, demographic trends strongly support the sector. Projections suggest that the overall number of supported homes may increase by 30% by 2030, rising from 650,000 to 845,00 in the UK. Demand is also expected to arise from the continued implementation of the government’s Transforming Care Agenda, which aims to improve the overall quality of care.
Properties will be let on tailored leases with a variety of lengths to registered charities, housing associations, community interest companies and other regulated organisations with a proven operating track record. Leases will be aligned to the length of care provision packages and underlying contractual documentation and, where appropriate, contain break options. This is a new model which seeks to balance the needs of registered providers and investors and which will ensure transparency in the setting of rents with benchmarking against private market rents.
The company will be managed by BMO Real Estate Partners, part of BMO Asset Management. Responsible investing is a core competency of BMO, which has £8 billion of AUM in responsible funds. “We believe the Responsible Housing REIT model offers a new and compelling proposition for investors,” said Guy Glover, lead manager at BMO.