The Multifamily Housing REIT, a new UK regional closed end property trust targeting the private rented sector (PRS), has unveiled plans to raise £175 mln (€197 mln) on the London Stock Exchange to purchase 658 PRS assets.
The Exeter-based fund will proceed with an initial public offering issuing 175 million ordinary shares for £1 each, whilst applying for admission to trade on the main market of the London Stock Exchange.
'The provision of, and access to, good quality and affordable privately rented accommodation has been lacking in the UK and it remains one the most undersupplied and fragmented, yet fastest growing, parts of the housing market,' said Nick Jopling, non-executive chairman of The Multifamily Housing REIT.
Seed portfolio in UK regions
The REIT plans to purchase a seed portfolio of 658 pre-built PRS homes plus five commericial units across 22 properties for a total fee of £70.26 mln. The assets are located in the UK regions, including Bristol, the West Midlands, East Anglia, Manchester and Leeds and are currently being managed by Harwood Real Estate (HRE), a real estate management platform launched in 2009.
According to Multifamily REIT, the seed portfolio has an independent market value of £78.25 mln and is expected to deliver a gross yield of 7% per annum, producing around £4.86 mln in rent.
Favourable supply-demand dynamics
'This is a hugely exciting opportunity for investors, as we look to capitalise on the favourable supply-demand dynamics supporting investment into the PRS sector, an addressable market believed to be valued at over £900 bn, and build out the UK’s first significant built stock platform to meet the demands of renters for genuinely affordable, well-located accommodation,' said Jonathan Whittingham, CEO of Harwood Real Estate Asset Management and non-executive director of The Multifamily Housing REIT.
'Through the assembly and performance of the seed portfolio, the highly experienced management team has demonstrated that The Multifamily Housing REIT model is a compelling proposition, delivering a highly visible and improving income stream year on year and giving us confidence that we can deliver significant market outperformance and attractive returns for shareholders,' Jopling added.
According to the REIT, the regional PRS is the fastest growing UK residential tenure and an emerging asset class, having expanded 108% in the last decade, compared to 89% growth in the Greater London market.
