The first company to launch a social housing real estate investment trust has begun to accept bids from landlords for up to £700 million of funding. The REIT will provide funding for more than 6,000 extra-care and supported homes. SAF Housing Solutions plans to list the company – Houses4Homes – on the Alternative Investment Market in the next two months. The company will ascertain demand for funding before approaching institutions – life and pension funds – for equity investment.
Phil Shanks, co-founder of SAF, said several councils and at least two charities were in the process of completing due diligence ahead of applying for funding. He added that he could ‘easily identify’ at least £200 million of demand already, mainly from local authorities. An initial £60 million of equity has already been raised as ‘seed capital’ for projects that need funding urgently to get off the ground. A further £500 million to £700 million will be brought in once landlords give an indication of how much investment they are likely to need over the next three years.
Once built, the properties will be owned by the new REIT and leased back to the individual providers, which will take on management responsibilities. REITs are listed tax-efficient property investment companies that attract institutional equity investors.