Social housing REIT edges nearer
The company that looks set to become the first to set up a social housing real estate investment trust has taken a step towards raising up to £500 million of investment after appointing Mazars as its corporate adviser.
Single Access Funding Housing Solutions is expected to launch a REIT in late summer or early autumn by listing on the AIM stock market with an initial investment pot of at least £200 million.
SAF will finance up to 4,000 new social homes, focusing on extra care and supported housing, grouping together properties and leasing them back to local housing providers. The homes will be either new-build or newly converted properties.
Phil Shanks, co-founder of SAF, said that one authority has signed up to the scheme already with several others going through a due diligence. He added that there were ‘a number of investors interested’ in financing the REIT, which will offer index-linked returns of at least 4 per cent.
The government is consulting on how to adapt legislation around REITs to help attract new investors into social housing. Some changes have already been included in the Finance Bill, which is expected to come into effect before the end of the month. These include the scrapping of a 2 per cent levy on starting a REIT and a three-year grace period before the vehicle has to be listed on a stock exchange.