The final amount raised is just shy of the £250m target that Home Reit outlined in its intention to float document, against a volatile market backdrop over the past couple of weeks.
Home Reit has sold 240.57m new shares a 100p a share. The shares will begin trading on the London Stock Exchange on Monday, October 12.
“We are delighted with the strong response received from a broad range of high calibre investors to our initial public offering — the largest investment trust IPO of this year and the largest UK-focused Reit IPO for over three years,” said Lynne Fennah, chairman of Home Reit in a statement.
Alavrium Securities was broker and placing agent.
The new Reit is believed to be the first dedicated to providing accommodation for the homeless. There have been other funds launched focused on social housing, but Home Reit is the first to focus specifically on homes for the homeless.
Home Reit intends to use the proceeds of its IPO to invest in a portfolio of properties around the UK.
These properties will be let on long tenancies of around 20 to 30 years on inflation-linked lease to registered charities, housing associations and other regulated bodies that provide accommodation to the homeless.
Home Reit said during the marketing period that its properties will cater to individuals struggling with a wide range of issues, such as leaving prison, fleeing domestic violence, or struggling with addictions or mental health issues.
Reits have long been popular with investors seeking a stable stream of income, but their attractiveness has only increased in a world where interest rates have been at or near zero for a sustained period of time.
Home Reit’s IPO is the latest step in a proliferation of the asset class into all kinds of properties, such as supermarkets, warehouses and student accommodation.
Once listed, Home Reit is going to target a dividend yield of 5.5%, and a net shareholder return of 7.5% in the medium term.