Social Housing REIT to acquire €126m senior living portfolio

Social Housing REIT is set to undergo a significant strategic transformation, including the acquisition of a senior living portfolio from Residential Secure Income (ReSI) for approximately £108.3 mln (€126.3 mln).

Jos Short

This move, announced conditionally, will also see the company propose a change to its investment objective and policy, and a rebrand to Living REIT.

The acquisition will be financed by £45 mln (€52.5 mln) in cash and £62.3 mln (€72.7 mln) through the issuance of 66,103,233 new shares. A further £1 mln (€1.17 mln) of the purchase price will be deferred pending finalisation of completion accounts.

The acquisition will materially increase the company's scale, boosting its gross asset value to £831.4 mln (€970.6 mln) and EPRA NTA to £471.4 mln (€550.4 mln) on a pro forma basis, and enhance the resilience and diversification of its income streams. The acquired portfolio comprises 1,907 senior living rental flats and 256 housing manager flats, which benefit from inflation-aligned income and needs-driven demand. It also includes attractive long-dated debt from Scottish Widows with an all-in cost of 3.46% maturing in 2043.

Crucially, the acquisition falls outside the scope of Social Housing REIT's current investment policy. Therefore, it is conditional upon shareholder approval of a new, broader investment objective and policy. This revised strategy will expand the company's focus from primarily specialised supported housing to a wider "Living" sector, encompassing specialised supported housing, senior living, and care homes.

Jos Short, chair of Social Housing REIT, commented: "The acquisition of this high-quality senior living portfolio materially increases our scale, broadens exposure across structurally supported living sectors, and enhances the resilience and diversification of income. The Board believes that senior living is a natural extension of our existing strategy. Like specialised supported housing, it benefits from long-duration, inflation-aligned income streams, strong demographic demand drivers, and the ability to deliver meaningful social outcomes."

The Company has received FCA approval for the new investment objective and policy.

In a related move, Atrato Group Limited (parent company of Social Housing REIT's AIFM) will acquire the Property Manager that services the senior living portfolio for a nominal sum, ensuring continuity of service and cost savings for the Company.