Home Reit Plc · LSE:HOME
Home Reit — H1 2021 Earnings Presentation
26 slides from Home Reit's earnings presentation, April 2021
Slide 1: Interim results for the period ended 28 Feb 2021
Interim results for the period ended 28 Feb 2021 Dedicated to fighting homelessness through funding the acquisition and creation of high quality homeless accommodation let on long term index-linked leases, providing superior inflation protected income and capital returns
Slide 2: Investment highlights
Investment highlights Overview • Home REIT plc is dedicated to fighting homelessness through funding the acquisition and creation of new, high quality homeless accommodation • Extremely secure, government backed, statutory protected income – targeting very low risk income and capital returns whilst
Slide 3: Advisory team
Advisory team Jamie Beale Track record • Partner/Fund Manager • Significant experience in public and private real • The Advisory team has transacted on over £1.5 billion of real estate markets, long income, social housing and estate deals, including: forward funding real estate space • £430m social
Slide 4: Non Executive Board
Non Executive Board Lynne Fennah Simon Moore • Chair • Non Executive Director • Qualified accountant and current CFO/COO • Experienced non executive director specialising of Empiric Student Property plc in investment trusts, currently serving at • Vast experience within various real estate Athelney
Slide 5: Financial & Operational Highlights
Financial & Operational Highlights 5.57% 4.9% 102.8 pps £243m 5.83% 100% Average Total NAV return EPRA NTA Portfolio Value Average valuation NIY Rent Collection Over 6 month from IPO +5% from IPO +4.3% from acquisition acquisition NIY Valued on an individual property basis 0.83 pps 32.8% 100% £86/wk
Slide 6: Social Impact
Social Impact 572 16 3,019 100% Properties Tenant partners People housed Green leases purchased 15 Charities and 1 Housing Association Current Target Areas Low carbon 65% 66 footprint Mental health Savings to Local Prison leavers Local Authorities Properties well Authorities* Drug & Alcohol addresse
Slide 7: Portfolio overview
Portfolio overview Asset location by percentage weight Top 10 tenants Tenant Target area Rental exposure Lotus Sanctuary Vulnerable women 15% Dawson Housing Accommodation for homeless adults 13% Big Help Project Prison leavers 10% Circle Housing and Support Accommodation for homeless adults 10% Gen
Slide 8: Homelessness in the UK
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 • £1.2bn annual loca
Slide 9: How does Home REIT help?
How does Home REIT help? New, high quality accommodation • Home REIT funds the acquisition/creation and • Let or pre-let to Registered Charities ownership of high quality homeless accommodation, comprising: • Long term security of tenure to allow the registered charities to make a sustained impact a
Slide 10: 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 11: Case Study 1
Case Study 1 C was referred to Big Help Project by his probation worker as he was due to be released from HMP Berwyn without any secured accommodation due to drug issues he was dealing with prior to his sentence. Since being housed in a Home REIT property he has made immense progress in various ways
Slide 12: Case Study 2
Case Study 2 20,000 Victims of domestic violence made homeless last year When J moved into Lotus Sanctuary she was looking forward to a new beginning as she was having a difficult time in her current situation. She had been rough sleeping for some time after years of physical and sexual abuse and fi
Slide 13: Case Study 3
Case Study 3 Client D stumbled across our services when she became homeless and befriended a current client of ours. She had no fixed abode and was spending her nights sleeping anywhere she could find, often resulting to her sleeping rough on the streets. We spoke to client D and were able to get in
Slide 14: Government funding for reducing homelessness
Government funding for reducing homelessness • 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 funds dir
Slide 15: How we partner with charities?
How we partner with charities? 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 Registered Charity to • Annual site visits conduc
Slide 16: Generating returns
Generating 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 received a
Slide 17: Long dated, low cost, fixed rate debt
Long dated, low cost, fixed rate debt Debt pricing and terms Long term free cash flow generation Lender Scottish Widows • 376bps spread between triple net indexed rental income (5.83% NIY) and fixed costs of debt (2.07%) underpins target returns Term 12 years • Spread would increase to 524bps by exp
Slide 18: Interim Results: NAV & Portfolio Bridge
Interim Results: NAV & Portfolio Bridge EPRA NTA 104.0 4.9% 102.8 pps 4.2 pps 102.8 pps 103.0 102.0 Total NAV return EPRA NTA Over 6 month from IPO +5% from IPO 101.0 100.0 0.6 pps 99.0 0.83 pps 98.0 98.0 pps 0.57 pps 97.0 DPS declared EPRA EPS In line with FY21 2.5pps 96.0 target 95.0 12-Oct-20 Cas
Slide 19: Interim Results: Income Statement & Balance Sheet
Interim Results: Income Statement & Balance Sheet Income Statement Balance Sheet (£m) Half-year ended 28 February 2021 (£m) Half-year ended 28 February 2021 Rental Income 3.06 Investment Property 243.00 Admin Expenses (1.44) Cash at bank 132.45 Operating profit before valuation changes 1.62 Other as
Slide 20: Outlook
Outlook • Home REIT is having a genuine social impact and is helping to significantly reduce homelessness • We have successfully deployed the £235m of IPO net proceeds and have fully committed the £120m of debt capital • Resilient portfolio, 100% let, with strong residual value and alternative use •
Slide 21: Appendices
Appendices
Slide 22: 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 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: 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 26: Contacts
Contacts HOME REIT PLC Jamie Beale jamie.beale@homereituk.com 0207 195 1420 07754 885 797 Gareth Jones gareth.jones@homereituk.com 0207 195 1433 07766 313 310 Alvarium Securities Mark Thompson mark@alvariumsecurities.com 0207 016 6711 07976 632 422 Eddie Nissen eddie@alvariumsecurities.com 0207 016