Home (HOME ), the real estate investment trust providing accommodation to the homeless, is looking to raise £150m from socially-minded income investors to ease the country’s worsening housing crisis.

The £713m closed-end fund managed by Alvarium Home Reit Advisors, says 222,000 people, equivalent to the population of Liverpool, have lost their homes since the start of the Covid pandemic in March 2020. The problem has been made worse by surging inflation and the current cost-of-living crisis.

It is offering new shares at 115p, 5.7% below Friday’s closing price of 122p, but at a 4.7% premium to the trust’s net asset value of 111.2p per share at the end of February. The offer ends on 26 May.

Fund managers Gareth Jones and Jamie Beale will use the money on a £300m pipeline of ‘off market’ properties, priced at an average net initial yield of 5.8%.

‘This placing will significantly enhance our capacity to invest in the provision of high-quality accommodation for homeless people across the UK at a time of grave necessity,’ said Home Reit chair Lynne Fennah.

‘The proceeds will enable us to continue expanding our existing portfolio which is generating inflation-protected income, utilising our strong pipeline of off-market opportunities, and work with our local partners to provide essential long-term support to some of the UK’s most vulnerable people.’

Earlier this month, the closed-ended fund spent £42.4m on 156 properties, bringing its tally of beds to 8,556 across England and Wales, let on an average lease length of 25 years.

After its £240m flotation in October 2020, the trust raised a further £250m last September which it deployed in January, drawing £152m of its £250m total debt facilities on top of that.

At 118.2p last night, the shares stood at a 6.6% premium above Numis Securities’ estimate of their 110.9p underlying net asset value, having fallen 7% this year. The fund is targeting quarterly dividends totalling 5.5p per share in the current financial year to September, putting it on a 4.6% yield. 

Numis analyst Ewan Lovett-Turner was optimistic about the trust’s investment opportunities, which are supported by the Homeless Reduction Act, which places a legal obligation on local authorities to house homeless people, underpinning rents.

‘The low weekly rents of £95 per week on average allows for strong residual value of assets through alternative uses. This is in contrast to the supported living Reits [CSH, SOHO] where the higher rental levels and value placed in the leases with housing associations results in asset valuations that are often more than twice the vacant possession value,’ he said.