Canadian asset manager BMO is planning to float a new REIT in London to buy up housing for the vulnerable and disabled.
BMO Real Estate Partners this morning announced its plans to float the Responsible Housing REIT on the main London market in September.
BMO, which manages more than £229bn in assets, wants to buy and refurbish existing properties as well as bring new stock into the market.
The REIT aims to deliver a dividend yield of 5% and a minimum annual return of 7.5% over the medium term.
Responsible Housing REIT, run by fund manager Guy Glover, plans to invest in supported housing across the UK, with properties leased to providers on contract lengths that match their care-provision contracts.
BMO has consulted local authorities, housing associations and other providers to ensure its offering meets the needs of regulators.
The new REIT’s chair, Robin Minter Kemp, said: “This offers the opportunity to invest in a much-needed social resource, where demand is on an upward trajectory and yet there is a lack of suitable supported housing accommodation to cater for these vulnerable groups.
“We believe that we can help meet this growing requirement with a leasing model that meets the specific needs of the sector aligned to the aims of the Social Housing Regulator.
BMO lead manager Guy Glover said: “While local authorities have a statutory duty to provide for those in need of supported housing, the UK faces a shortage of suitable accommodation, underpinning our conviction in a strategy delivering a balance between all stakeholders to create a truly sustainable model.”
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