Mailbox REIT's imminent listing has been described as a 'watershed moment' for the sector. In England, a household became homeless every four minutes between 2018 and 2019, according to the Ministry of Housing, Communities & Local Government. Mindspace REIT will be the second publicly traded REIT after Embassy and Blackstone raised over Rs 4,700 crore through an IPO in April 2019. Gareth Jones (partner and chief financial officer). Accessed July 22, 2020. Industry sources point out that Grandjoy, a major Chinese retail mall owner, made the mistake of speaking to media that it had been selected as the first C-REIT to list this year. It will create a portfolio of, and add to the supply of, fit-for-purpose accommodation for homeless individuals. Accessed July 22, 2020. She became European chief financial officer for the Toga Group in 2008, with responsibility for the development of hotels and management of commercial property investments. However, the minimum issue size … The fundamentals driving the continued growth and performance of the company are: Home REIT will use the proceeds of the IPO to fund the acquisition and creation of specialist homeless accommodation. The depositary is also entitled to a one-off set-up fee. The leases are ‘triple net, full repairing and insuring’ in nature, meaning the tenant (in this case the housing association or charity) is obligated to pay all taxes, building insurance, other outgoings and repair and maintenance costs on the property, in addition to the rent and service charge. She spent 20 years with the Miller Group, a major UK property business, predominantly as finance director for Miller Developments, the property development and investment arm, and latterly as group accounting and treasury director. The company will acquire the assets directly or through holdings in special purpose vehicles (SPVs). The portfolio accommodates homeless people from many backgrounds including mental health, ex-offenders, drug and alcohol dependency, domestic violence and foster care leavers. There was an eclectic mix […], IMPORTANT INFORMATION NB: Marten & Co has been paid to prepare this note on behalf of Home REIT Plc. Post-acquisition, the manager will carry out the following asset management and monitoring steps: The company will not assume any direct development risk. Opco is the abbreviation for "operating company," often used when describing a business that uses multiple business entities in conducting operations. However, diversified and specialty REITs may hold different types of properties in their portfolios, such as a REIT that consists of both office and retail properties. The note does not form part of any offer and is not intended to encourage the reader to subscribe for ordinary shares in Home REIT or deal in any other security or securities mentioned within the note. The Office for National Statistics found that the number of homeless people dying in England increased 22% in 2018 over 2017. In order to ensure that rents are sustainable, these leases will also include rental growth caps per annum, which avoids onerous rental increases for the company’s tenants in the event of extreme inflation. There are more than 225 publicly-traded REITs in the U.S., which means you’ll have some homework to do before you decide which REIT to buy. Be sure to consider the REIT’s management team and track record—and find out how they’re compensated. the maximum exposure to any one tenant will not be greater than 15% of gross asset value or, if not yet fully geared, gross asset value adjusted for portfolio geared at 35% loan to value; the maximum exposure to properties located within the boundary of any one local authority will not be greater than 15% of gross asset value or, if not yet fully geared, gross asset value adjusted for portfolio geared at 35% loan to value; the maximum exposure to forward funded developments will not be greater than 20% of gross asset value or, if not yet fully geared, gross asset value adjusted for portfolio geared at 35% loan to value; and. As mentioned, the REIT is European property centered, meaning they are or will be pretty impacted from the coronavirus. Healthpeak Properties—formerly HCP— is one example. What Is a Real Estate Investment Trust (REIT)? The company has a current pipeline of potential property acquisitions worth more than £350m under exclusivity, having already commenced negotiations and discussions with vendors. These targets are based on estimates prepared by the company and its investment adviser, and are not guaranteed. Poor-quality privately rented housing stock or expensive B&Bs are frequently being utilised by local authorities to manage increasing demands for accommodation. October finished with the threat […], Real Estate Quarterly Roundup Kindly sponsored by Aberdeen Standard Investments Toughing it out It has been another challenging quarter for the real estate sector as the COVID-19 pandemic […], Investment Companies Quarterly Roundup Kindly sponsored by Baillie Gifford and Aberdeen Standard Investments Table of contents In this issue Performance data Positive movers Negative movers Discounts and premiums Getting […], Real Estate Roundup Kindly sponsored by Aberdeen Standard Investments Performance data September’s biggest movers in price terms are shown in the chart below. Under such a lease, the tenant is responsible for all costs associated with the repair and maintenance of the building. The real estate investment trust that will own the building is set to be the first listing on the IPSX. According to Shelter, local authorities in England spent more than £1bn on housing homeless people in temporary accommodation, such as hostels, B&Bs and private rentals, in the financial year 2018/19. Marlene is currently non‐executive director and treasurer for One Parent Families Scotland. NB: Marten & Co has been paid to prepare this note on behalf of Home, The note does not form part of any offer and is not intended to encourage the reader to subscribe for. Prior to this, he practised as a commercial property solicitor in the City of London, where he acted for leading developers and property funds on a variety of deals, ranging from large-scale residential developments to substantial commercial property transactions. A REIT’s objective is to provide the investors with dividends that are generated from the capital gains accruing from the sale of the commercial assets. The IPO will close on 30 Sep 2019 at 12pm and start trading on 2 Oct 2019 at 2pm. The assets will typically be acquired from private owners/developers with referrals from housing associations, local authorities and charities. The investment objective of the company is to deliver inflation-protected income and capital growth over the medium term for shareholders by funding the acquisition and creation of high-quality homeless accommodation across the UK, let on long-term index-linked leases. 0.85% per annum of NAV up to and including £500m; 0.75% per annum of NAV above £500m up to and including £750m. The REIT's industry-leading retail properties and investments across North America, Europe and Asia provide shopping experiences for millions of consumers every day and generate billions in annual retail sales. Across the company’s portfolio, the average rent payable by the housing association will be around 40% of the total housing benefit received per property providing a robust 2.25x portfolio rent cover. Valuations of the company’s properties will be conducted twice a year. The registrar is also entitled to certain transaction fees under the registrar agreement. A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. It advises that "You can verify the registration of both publicly traded and non-traded REITs through the SEC's EDGAR system. Accessed July 22, 2020. The local authority is funded by the Department of Work and Pensions, which covers 100% of the cost for care and housing benefit for each individual tenant housed in homeless accommodation. Several REITs focus on this sector. Most REITs are publicly traded like stocks, which makes them highly liquid (unlike physical real estate investments). The administrator is also entitled to a company secretarial fee of £60,000 per annum for the provision of certain company secretarial services. Accessed July 22, 2020. If the company’s shares are trading at a discount, the directors will consider repurchasing shares on an ad hoc basis. No expenses will be charged to investors by the company. As part of their structure, they must pay 90% of income back to investors. So, only 10% of taxable income can be reinvested back into the REIT to buy new holdings. Home REIT is a passive landlord and has no responsibility for the operation of the assets or the care provided to the individual tenants. In China, sponsors will need to be granted a licence before they can prepare an initial public offering (IPO). ARA US Hospitality Trust, Elite Commercial REIT, Prime US REIT and United Hampshire have not released full-year financial figures yet. In addition, the chair of the audit committee will receive an additional fee of £5,000 per annum. This enables Home REIT to offer a low-risk, inflation protected income stream to investors. Other negatives are that REIT dividends are taxed as regular income, and some REITs have high management and transaction fees. The Homelessness Reduction Act 2017 came into force on 3 April 2018, and states that: The long-term security of tenure that Home REIT will provide housing associations and registered charities with allows them to make a sustained impact on the lives of individual tenants. By using Investopedia, you accept our, Investopedia requires writers to use primary sources to support their work. According to Shelter, the homelessness charity, more than 320,000 people are estimated to be homeless in Great Britain. The causes of homelessness are varied and complex and include lack of affordable housing; drug and alcohol dependency; leaving institutional settings such as prisons, foster care and armed forces with no home to go to; eviction by private landlords; relationship breakdowns; domestic violence; and mental illness. "REITs by the Numbers." Properties in a REIT portfolio may include apartment complexes, data centers, healthcare facilities, hotels, infrastructure—in the form of fiber cables, cell towers, and energy pipelines—office buildings, retail centers, self-storage, timberland, and warehouses. Ordinary shares repurchased may be held in treasury or cancelled. He worked for four Cabinet ministers in four departments: the Northern Ireland Office; the Home Office; the Ministry of Housing, Communities & Local Government; and the Ministry of Justice. He has been an investment trust analyst since 1994 and has worked with several stockbrokers in the City of London, including Williams de Broe, Teather & Greenwood and Collins Stewart. Two-thirds of people released from prison without accommodation reoffend within a year, at a cost of £16bn to the UK economy, according to the Ministry of Justice. Debt will be secured at the asset level and potentially at the company or SPV level, depending on the optimal structure for the company and having consideration to key metrics including lender diversity, debt type and maturity profiles. The company is targeting a minimum annual dividend yield of 5.5% and a total shareholder return of at least 7.5% per annum over the medium term, when fully invested. In general, REITs specialize in a specific real estate sector. Sleeping rough is the most extreme form of homelessness, but most people categorised as homeless have no permanent home, stay with relatives and friends or reside in temporary accommodation, such as bed and breakfast hotels (B&Bs), hostels, night shelters and refuges. This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves. If investors want to consider diversifying their REIT exposure beyond Singapore to the United States, this should be a name that can be considered. Where the company invests in forward funded developments: In order to achieve a portfolio that is diversified by property, tenant and location, the company will be subject to the following investment restrictions: Home REIT intends to invest the net issue proceeds as quickly as practicable following admission, and the investment adviser estimates it should be substantially invested or committed within six to nine months. DoubleDragon Properties Corp. is eyeing to raise P14.7 billion from the public listing of its own real estate investment trust (REIT). In addition, no fees are payable to the investment adviser on any cash raised under the issue that remains undeployed more than six months after admission. Congressional Research Service. 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