Home Reit Plc · LSE:HOME
Home Reit — Investor Presentation (September 2022)
27 slides from Home Reit's investor presentation, September 2022
Slide 1: Update Presentation
Update Presentation Dedicated to fighting homelessness through funding the acquisition and creation of high quality accommodation for homeless people let on long term index-linked leases, providing superior inflation protected income and capital returns
Slide 2: Advisory team
Advisory team Gareth Jones Experienced advisory team with strong track • Partner/Fund Manager/CFO record • Chartered Accountant with significant experience as CFO to both listed and private companies • The Advisory team has transacted on over £2 billion of real • Sector experience at private and lis
Slide 3: Financial & operational highlights - six months to 28 February 2022
Financial & operational highlights - six months to 28 February 2022 5.6% 7.9% 111.2 pps £713m 5.9% 100% Average Total NAV return EPRA NTA Portfolio Value Average valuation NIY Rent Collection Since August 2021 +5.8% in the period +6.4% from acquisition acquisition NIY Valued on an individual propert
Slide 4: Post Balance Sheet Events – as at 13 September 2022
Post Balance Sheet Events – as at 13 September 2022 • Since period end 723 properties containing 3,028 beds have been purchased deploying over £263m of capital • 88% of the Company’s oversubscribed May 2022 £263m equity issue deployed • Portfolio has reduced London exposure whilst increasing in the
Slide 5: Performance since IPO: NAV & Portfolio Bridge
Performance since IPO: NAV & Portfolio Bridge EPRA NTA (pps) 115.0 2.4 17% 5.0 111.2 2.2 Total NAV return 110.0 Since IPO in Oct-2020 0.9 2.3 1.6 105.0 105.0 4.2 102.8 111.2 pps 1.7 100.0 EPRA NTA 98.0 0.6 +13.5% from IPO 95.0 3.9 pps 90.0 12-Oct-20 Earnings Change in 28-Feb-21 Earnings Dividends Ch
Slide 6: Delivering tangible social impact – at 13 September 2022
Delivering tangible social impact – at 13 September 2022 2,308 11,131 28 100% Properties purchased Beds provided Tenant partners Green leases Wide range of 65% Low carbon support areas 132 footprint Savings to Local Mental health Authorities* Prison leavers Local Authorities Properties well Drug & A
Slide 7: Portfolio diversified by occupier and geography
Portfolio diversified by occupier and geography Asset location by percentage acquisition value (13 Sept) Top 10 tenants (28 Feb) Tenant Target area Exposure Big Help Project General homeless and prison leavers 10.5% Lotus Sanctuary CIC Vulnerable women 9.9% Supportive Homes CIC General homeless 8.6%
Slide 8: Social impact case study 1
Social impact case study 1 CASE STUDY: BB BB was in an abusive relationship and struggled with alcohol addiction. BB was thrown out of her home by her husband and became homeless. BB moved into a hostel but felt unhappy and unsafe there. Since moving to a Home REIT property operated by Lotus Sanctua
Slide 9: Social impact case study 2
Social impact case study 2 13% in Q2 2020, an estimated 13% of people released from prison did not have a home to go to. Source: Ministry of Justice CASE STUDY – P P was referred to a Home REIT property by his probation officer. P had completed serving a prison sentence and was pleased to move into
Slide 10: Social impact case study 3
Social impact case study 3 CASE STUDY – AR AR was referred from Merseyside Domestic Violence Service (MDVS) and was fleeing from an extremely abusive partner with her daughter SR. AR was also suffering abuse from her partner’s family. AR and SR needed secure and safe accommodation very quickly and w
Slide 11: Challenge of homelessness in the UK
Challenge of homelessness in the UK Homelessness is a persistent & growing problem for our society; being homeless devastates people’s lives, significantly affecting their physical and mental health. Cause Impact Cost • Loss of income/financial difficulties • 111% increase in local authority • £1.4b
Slide 12: Home REIT offers tailored, cost effective housing supply
Home REIT offers tailored, cost effective housing supply Modern, high quality accommodation focused on specific local needs • Let or pre-let to tenant partners • Home REIT funds the acquisition/creation and ownership of high quality accommodation, • Long term security of tenure to allow the tenant c
Slide 13: Benefits for our tenants and local authorities
Benefits for our tenants and local authorities Home REIT provides considerable cost savings: Statutory and downside protection: • There is a critical need for further homeless housing in the UK, • The Homelessness Reduction Act 2017 came into force on 3 April due to an increasing homeless population
Slide 14: The Good Economy Report (September 2021)
The Good Economy Report (September 2021) The Good Economy (TGE) aims to assess HOME impact As part of its assessment TGE: performance as follows: • Analyses portfolio data collected by HOME Is HOME achieving its defined impact objectives? • Interviews the fund management team • Interviews with housi
Slide 15: Sustainable rents underpinned by government funding
Sustainable rents underpinned by government funding • Typically, government funding for each tenant in this sector Home REIT represents 100% of the cost for care and housing and is paid from (Landlord) the Department of Work and Pensions to the relevant Local Authority. The Local Authority passes fu
Slide 16: Rigorous process for charity and asset selection
Rigorous process for charity and asset selection Pre Acquisition Post Acquisition Due diligence steps are undertaken by the Home REIT Asset management and monitoring steps undertaken by team includes: the Home REIT team includes: • Meeting with the Local Authority and Charity to discuss • Annual sit
Slide 17: Inflation-linked returns
Inflation-linked returns * Returns model* Income & capital growth 10% • Strong focus on long term affordability / sustainability of rent – 9% material headroom between total benefits received vs. rents paid 8% and discount to private rent levels (c.2.25x rent cover between gross housing benefits rec
Slide 18: Long dated, low cost, fixed rate debt
Long dated, low cost, fixed rate debt 1st Debt Tranche Long term free cash flow generation Lender Scottish Widows • 357bps spread between triple net indexed rental Term 12 years income (5.87% NIY) and fixed costs of debt (2.3%) All-in rate 2.07% (180 bps margin) underpins target returns Rate Fixed t
Slide 19: Summary
Summary • Home REIT is having a genuine social impact and is helping to significantly reduce homelessness • Since IPO in October 2020, Home REIT has delivered over 11,100 beds across 2,308 high quality accommodation for homeless people • Resilient portfolio, 100% let, with strong residual value and
Slide 20: Appendices
Appendices
Slide 21: Term sheet
Term sheet Company Home REIT plc Investment Advisor Alvarium Home REIT Advisors Limited Structure Closed-ended, listed REIT Exchange Main Market, London Stock Exchange (Premium Listing) Target returns Minimum of 5.5%+ pa target dividend once fully invested / total net return of 7.5%+ pa* Dividend gr
Slide 22: Non Executive Board
Non Executive Board Lynne Fennah Simon Moore • Chair • Non Executive Director • Qualified accountant and current CFO/CSO • Experienced non executive director specialising of Empiric Student Property plc in investment trusts, currently serving at • Vast experience within various real estate Athelney
Slide 23: Downside Protection
Downside Protection Asset Tenant • Robust portfolio with secure long-dated inflation • Rents are pre-agreed with the local authorities linked income underpinned by built property assets with a very low spread to vacant possession value • Rent reviews provide for a cap (at 4% pa) and collar (at 1% pa
Slide 24: Key sector differentiators
Key sector differentiators • Low and sustainable level of rents broadly in line with Local Housing Allowance rates - providing narrow spread to vacant possession value • Alternative use options (PRS and student housing) by virtue of city/town locations and residential assets with little need for rev
Slide 25: HY Results: Income Statement & Balance Sheet – 28 Feb 2022
HY Results: Income Statement & Balance Sheet – 28 Feb 2022 Income Statement Balance Sheet £m HY22 HY21 FY21 £m HY22 HY21 FY21 Rental Income 17.51 3.06 11.76 Investment Property 713.37 243.0 327.86 Admin Expenses (3.32) (1.44) (3.26) Cash at bank 153.42 132.45 42.09 Operating profit before valuation
Slide 26: Disclaimer
Disclaimer This document has been prepared by Alvarium Home REIT Advisors Limited (“Home") for information and discussion purposes only and should not be considered an offer or solicitation of an offer to buy or sell shares in the capital of Home REIT plc (the “Company”). In particular this document
Slide 27: Contacts
Contacts Home REIT PLC Gareth Jones gareth.jones@homereituk.com 020 7195 1433 07766 313 310 Charlotte Fletcher charlotte.fletcher@homereituk.com 020 7195 1409 07825 578 879 Alex Baker alex.baker@homereituk.com 0203 866 7100 07717 131 451 Alvarium Securities Mark Thompson mark@alvariumsecurities.com