Housing for the homeless and vulnerable is expected to get a £600m boost, with two REIT raises and a tie-up in Bromley revealed this week.
Canadian asset manager BMO plans to float a new REIT in London to buy up housing for the vulnerable and disabled. Responsible Housing REIT aims to raise £250m in its listing this month, and will set alongside BMO’s maiden £500m housing fund targeting the private rented sector. The REIT will provide supported housing, with properties let to specialist care providers, and a dividend yield of 5% and an annual return of 7.5% .
A second listed vehicle, Home REIT, is honing in on accommodation for the homeless with a £262m equity issue following a £240m IPO last October.
Home REIT buys and develops accommodation for homeless and has amassed a portfolio of 3,846 beds in 711 properties in under a year. It draws income from leases with operators and pays out a dividend of 5.5p with target shareholder returns of at least 7.5% per annum.
In a third strategy, Bromley Council has agreed a joint venture with Orchard & Shipman. Backed by a £65m loan from Pension Insurance Corporation, the partners intend to invest £85m buying 300 affordable homes to alleviate spend on costly overnight emergency accommodation.
John Knevett, chairman of Orchard & Shipman Homes, added: “With the traditional housing association sector retrenching, the market is in desperate need of new entrants and new funding models with the right long-term motives and good quality services. Novel creative models like this are perfect to help add to the numbers of additional affordable homes.”
New Homes England chief executive Peter Denton is a long-time supporter of private players investing in affordable housing. When Homes England and the Greater London Authority revealed the recipients of £8.6bn in funding in the 2021-26 Affordable Homes Programme, Denton took the opportunity to highlight the broad range of partners – including four for-profits, with Legal & General and McCarthy Stone, among others. He said: “We are creating the conditions needed for institutional investment to catalyse affordable housing supply.”
But it hasn’t been all good news for affordable housing registered providers this week. After proptech company Plentific suffered a data breach, some of the biggest housing associations have had tenant data stolen and used by scammers sending phishing e-mails and asking them to make payments in cryptocurrency. L&Q, Notting Hill Genesis, Peabody and Penge Churches all reported lost data, and Legal & General Affordable Homes has suspended a pilot with the company.
Elsewhere, London developer Pocket Living is launching its own form of affordable (with a small “a”) housing. Pocket specialises in market-sale homes (pictured) priced with a 20% discount for local buyers with low to moderate income. The new business aims to deliver an equal number of BTR homes to the core delivery model, with a debut scheme of more than 400 homes in Old Oak.
“As you grow up from being an ‘S’ in the SME spectrum, you can’t just keep spinning the same plate,” says Vlessing. “All of our stakeholders are pointing in the same direction, and one of our key stakeholders is our consumer. For our consumer, we know that a keenly priced rental product would get an awful lot of people into a home that they could consider their own for the long term.”
View the magazine , download the app (iOS and Android) and read on for more of the week’s headlines:
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