New supported housing REIT unveils £150m flotation plan

The latest in a string of Real Estate Investment Trust (REITs) to target the supported housing sector has unveiled plans for a £150m float on the stock exchange.

Independent Living REIT plc yesterday announced its intention to raise £150m through the launch of an initial public offering (IPO) on the London Stock Exchange. It published a prospectus for investors yesterday afternoon.

The trust said the finance raised will be used to invest in a ‘diversified portfolio of fit for purpose supported housing assets’. It will purchase and lease properties to housing associations and adds there is an ‘extensive’ pipeline of potential acquisition opportunities worth around £500m.

Independent Living is intending to focus on the extra care, specialised supported housing and homeless accommodation sub-sectors of supported housing.

It said its specialised supported housing will cater for adults with learning difficulties, mental health issues or physical disabilities, who require specialised services or support to enable independent living in the community. The extra care accommodation will offer an alternative to care homes, primarily for adults aged 55 plus in larger blocks of flats.

The new REIT’s stated investment objectives are to ‘address the shortage of high-quality supported housing, delivering capital growth and inflation-linked income returns for its investors whilst providing a fair deal for society through savings for the UK taxpayer, and improved outcomes for residents’.

It is chaired by Fiona Miller Smith, who also oversees the Barts Charity. The two other non-executive directors are Sebert Cox, a former chair of housing association giant Places for People Group and northeast-based provider Karbon Homes and a board member of the National Housing Federation.

Independent Living is targeting an initial dividend of 5p per share for the first and second financial years following its admission to the stock exchange.

The REIT said it offers government backed and inflation-linked income through rents funded by the Department for Work and Pensions, while helping to address a ‘significant backlog’ of demand by leasing supported housing properties to housing associations.

Independent’s investment adviser is Atrato Partners Ltd and its sponsor and broker is RBC Europe Limited, trading as RBC Capital Markets.

The results of the initial issue are due to be announced on September 30^th with a view to listing the new company on the stock exchange on October 4^th.

Miller Smith said: “The number of vulnerable people relying on supported housing is set to significantly increase over the coming years, whilst the structural undersupply of appropriate accommodation remains. We aim to address this rising demand and limited supply by leasing affordable, dedicated housing to housing associations via a well-governed and compliant model.

“We have specifically designed Independent Living REIT plc following extensive dialogue with the Regulator of Social Housing. Our model delivers a long-term, financially sustainable approach that benefits local authorities, residents and investors. By delivering safe housing for vulnerable members of the community, we will provide a clear and measurable impact to society.”

Independent is the latest in a series of social housing REITS, which have been established since the launch of Civitas’ pioneering trust in 2016.

Last year saw the £250m flotation of new supported housing REIT Responsible Housing, while Civitas raised £192m for its new Supporting Housing Fund.