Responsible Housing REIT, a care-focused property trust, has unveiled plans to float on the London Stock Exchange as it looks to raise up to £250 mln (€291 mln) through a share issue.
Proceeds from the IPO would be invested into a diversified portfolio of supported housing accommodation across the UK. The REIT focuses on a number of care sectors including adults and young people with learning disabilities, mental health issues, physical disabilities, addiction, those with support needs and those in need of temporary accommodation.
The company will be managed by BMO Investment Business, BMO REP Asset Management and BMO REP Property Management, all part of the group of companies whose parent is BMO Asset Management.
Robin Minter Kemp, chairman of Responsible Housing REIT, said: 'Responsible Housing REIT 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.
'This will be an impact-led strategy, with a peer leading ESG framework, that also offers an attractive dividend underpinned by inflation-linked income supported by sustainable rents.'
According to the firm, the UK's supported housing sector experiences continuous resident demand, underpinned by supportive demographic trends, but continues to suffer from a lack of available, quality and fit-for-purpose accommodation.
Projections suggest the overall number of supported homes may need to expand by 30%, from approximately 650,000 units in 2015 to approximately 845,000 units by 2030 to accommodate the increasing demand.
Responsible Housing's properties will be let on tailored leases with a variety of lengths to registered charities, housing associations, community interest companies and other regulated organisations, which have a proven operating track record and meet minimum screening requirements.
Leases will typically be aligned to the length of care-provision packages and underlying contractual documentation and, where appropriate, contain break options. This creates a new model which seeks to balance the needs of registered providers and investors and seeks to be aligned with the regulator of social housing’s (RSH) requirements.
Guy Glover, lead manager at BMO said: 'We have been engaging extensively with stakeholders in the supported housing community, including registered providers, care providers and the social housing regulator, culminating in the Responsible Housing REIT model, which we believe offers a new and compelling proposition for investors.
'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.'