FUNDAMENTUM SUPPORTED HOUSING REIT PLC

Transcription

1 INTRODUCTION Issue of up to 150 million Ordinary Shares pursuant to a Placing, Offer for Subscription and Intermediaries Offer at an Issue Price of 100 pence per Ordinary Share Investment focus on Supported Housing properties (accommodation that is suitable, or adapted for residents with identified care needs) Targeting dividend yield of 5.0% p.a., expected to increase broadly in line with inflation Investment Adviser with a 5 year track record operating in the Social Housing sector, with strong relationships with the key sector participants Substantial market opportunity with a large number of people requiring specialist housing against a backdrop of a housing shortage Significant identified investment pipeline Advertisement This is an advertisement and not a prospectus for the purpose of EU Directive 2003 / 71 / EC or Part VI of the Financial Services and Markets Act 2000 ( FSMA ). Potential investors should not apply for or buy any shares in Fundamentum Supported Housing REIT PLC ( the Company ) except on the basis of information contained in the prospectus published by the Company in connection with the offer of shares in the Company and which is available at: This is a financial promotion and is not intended to be investment advice. It is possible that investors might not see a return on money for a number of years, if at all, as target returns are not guaranteed. The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than originally invested. // 01

2 INVESTMENT HIGHLIGHTS Targeting a dividend yield of 5.0% p.a., expected to increase broadly inline with inflation Government supported cash flows with rental agreements with Housing Associations and Local Authorities (collectively know as Registered Providers ) Multi year leases with guaranteed income/occupancy are entered into with the Registered Providers Leverage limit of 40% with 30% loan-to-value targeted Creation of leases provides the opportunity to create additional value for shareholders in excess of the dividend Substantial market opportunity A large number of people require housing against a backdrop of a housing shortage Focus on Supported Housing with rental income directly received by Registered Providers from government agencies Long-term opportunity with multiple government parties supporting the sector A health problem within the UK increases demand Significant pipeline identified Significant investment pipeline of assets subject to exclusivity ( 101m), with an additional pipeline of investment opportunities identified across the UK Relationships with Registered Providers help to provide an outline of their needs and requirements for Supported Housing Purchasing small/medium lot sizes linked directly with the specific needs of the service user Investment adviser Fundamentum Property was established in 2013 as a boutique property adviser specialising in the UK Supported Housing sector Successfully transacted on 100+ properties, 70 of which were in the Supported Housing sector Team has combined 40+ years experience in the sector Fundamentum will focus on Supported Housing : Tenants are specific interest groups with identified needs (e.g. learning disabilities, autism, etc.) Multi-year leases/management agreement with guaranteed income/occupancy are entered into by the Housing Association/Local Authority Houses are professionally managed by a Registered Provider, all of which are regulated by the Regulator for Social Housing (RSH) Fundamentum Property s investment strategy will focus on Supported Housing where rental income is directly received by Registered Providers from government agencies. // 02

3 THE GROWING NEED FOR SOCIAL HOUSING There are 13.3 million people in the UK who live with a disability 1 in 3 houses occupied by an individual are considered Non- Decent or Appropriate Accommodation 1 in 5 people with a disability state they are in the wrong accommodation The NHS states it is managing 2,500 people at any one time who require urgent accommodation within supported living environments The Government under the Transforming Care Agenda have allocated resources to repatriating people who were lost in care or in the wrong place, such as hospitals and institutions. Individuals living with disabilities and/or mental health issues are being brought back into communities and into supported living environments. Current figures show there are over 900,000 adults still to be accommodated Supported Housing through Registered Providers allows service users the advantage of independent living within their community at a cost very much lower than institutional care // 03

4 ABOUT THE INVESTMENT ADVISER Investment adviser with a proven track record, sector knowledge and relationships: Fundamentum Property was established in 2013 as a boutique property adviser specialising in the UK Supported Housing sector The team has a proven track record in delivering professional services within the UK Social Housing sector Strong relationships with numerous Registered Providers across the country Team has combined 40+ years experience in the sector. Successfully transacted on 100+ properties, 70 of which were in the Supported Housing sector Successfully developed numerous sites across the UK, to ensure they are suitably equipped for Supported Housing KEY PROPERTY TEAM CHRISTIAN FORBES Christian began his career working for a Channel Islands Stock Exchange listed residential property fund the Armstrong Residential High Yield Fund in The role consisted of the property management of the 50 million property portfolio, specialising in asset management and development of propertiesin the United Kingdomand the Isle of Man. In 2013, Christian helped to establish a commercial property adviser, initially heading up the property management team on a listed Luxembourg fund as well as for numerous private client and family office investments. In June 2014, Christian set up Fundamentum Property, the main role of which is the management of the Castel Residential Property Fund, a Luxembourg SICAV. PAUL O ROURKE Paul is a qualified lawyer and also the founder of the Next Stage Group, a company which provides specialist care, support and accommodation for vulnerable adults, particularly those with severe and enduring mental health problems, and now employs in excess of 200 people. Paul has created a children s home for 8 17 year olds, a support and accommodation service for year olds, and a fostering service. Paul historically worked for Local Authorities in a number of different health/social care settings, as well as within the legal sector. Paul has worked with FPL for a number of years, and brings the benefit of his experience in dealing with Housing Associations and Local Authorities to the board of FPL. Paul has been appointed by the Investment Adviser to provide property consultancy services to the Investment Adviser in connection with the services it provides to the REIT. His extensive knowledge of relevant legislation ensures that the Investment Adviser is very well positioned in the market place. STEWART QUAYLE Stewart started his career with the NatWest Banking Group before moving to Cater Allen Private Banking (subsequently Abbey International). After eight years, Stewart moved to Bank of Ireland to assist in heading-up its Specialist Deposit Team, where he was part of the senior management team, running trades in excess of 1 billion and providing sales, relationship and operational support to large institutions, private banks, family offices and UHNW individuals. After leaving Bank of Ireland, Stewart established a bespoke news and investment portal for the intermediary market, IFA Shops. Following the sale of IFA Shops in 2012, Stewart took up a senior management role within Creechurch Capital, where he was responsible for the newly formed inhouse sales company, AVI Limited, contributing to significant growth. In a period of 4 years, assets under management grew to over 175 million. One of the products launched was the Castel Fund, for which AVI conducted the marketing, fund raising and strategy development. Stewart sits on the board of Fundamentum Property, bringing the benefit of his experience to relationship management with Housing Associations and Local Authorities. // 04

5 KEY RISKS Detailed disclosure of such risks is contained in the prospectus, in the section headed Risk Factors. You should consider these risks carefully. Investments made by the Company will comprise interests in the legal title to Social Housing and residential property assets that are not publicly traded or freely marketable and these investments are often subject to restrictions on who may own and/or operate the property assets concerned and may, therefore, be difficult to realise at the value attributed to such investments, or at all. The Net Asset Value should not be assumed to represent the value at which the Portfolio could be sold in the market or that the assets of the Company are saleable readily or otherwise. The growth of the Company depends upon the ability of the Company to identify, select, acquire and manage investments that offer the potential for satisfactory returns, including the ability to enter into suitable lease and/or management arrangements with Registered Providers. In addition, the Board, may or may not accept identified opportunities as being suitable for investment by the Company and there can be no guarantee that the Company will proceed to complete the acquisition of any such investment opportunities. The Company is dependent upon the good governance and financial viability of the Registered Providers. Returns from the Company s investments will be affected by the price at which they are acquired. The value of these investments will be (amongst other risk factors) a function of the discounted value of their expected future cash flows, and as such will vary with, inter alia, inflation and the competition for such assets. Property valuation is inherently subjective and uncertain. The value of such assets is determined by an appraisal process that can significantly differ from the transaction price, even though the basis of the appraisal process is to determine the fair value of the analysed assets. There is a risk of changes to the Social Housing regulatory regime, and the levels of rent payable under it, and/or to the housing benefit regime, any of which may adversely affect the Company and its return to Shareholders. Where a property requires refurbishment or renovation, the Company is dependent on the performance of third party contractors and sub-contractors who may fail to perform their contractual obligations, which may have a material adverse effect on the Company's performance, financial condition and business prospects. The Company will compete against other investors to acquire investments available in the Social Housing sector, which may not be favourable to the Company at all times. Global market uncertainty and the weakened economic conditions in the United Kingdom and elsewhere may reduce the value of the Company s portfolio once it has been acquired, and may reduce liquidity in the real estate market. The Company has no operating history. If the Company fails to qualify, or remain qualified, as a REIT, its rental income and gains will be subject to UK corporation tax. The Company s status as a REIT may restrict business consolidation opportunities and distribution opportunities to Shareholders. Changes in interest rates may adversely affect the Company s investments. Any change in the tax status of the Company or any of its underlying investments or in tax legislation or practice (including in relation to taxation rates and allowances) or in accounting standards could adversely affect the investment return of the Company. The market value of, and the income derived from, the Ordinary Shares can fluctuate. The market value of the Ordinary Shares, as well as being affected by their Net Asset Value and prospective Net Asset Value, also takes into account their dividend yield and prevailing interest rates. The market value of, and the income derived from, the Ordinary Shares can fluctuate. The market value of the Ordinary Shares, as well as being affected by their Net Asset Value and prospective Net Asset Value, also takes into account their dividend yield and prevailing interest rates. The Ordinary Shares may trade at a discount to Net Asset Value and Shareholders may be unable to realise their investments through the secondary market at Net Asset Value. There is no guarantee that a liquid market will be established in the Ordinary Shares. There is no guarantee that any dividend in respect of any period will be paid. There is no guarantee that the Company will achieve the stated target net total Shareholder return referred to in this document and therefore achieve its return objective. The Company's ability to pay dividends will be dependent principally upon the investments comprising of the Portfolio. No guarantee of return. A prospective investor should be aware that the value of an investment in the Company is subject to normal market fluctuations and other risks inherent in investing in equity securities. There is no assurance that any appreciation in the value of the Ordinary Shares will occur or that the investment objectives of the Company will be achieved. // 05

6 SUMMARY TERM SHEET Investment Adviser Fundamentum Property Advisers Limited 1 Sponsor and Bookrunner Investec Bank plc Issue price 100 pence per share Issue size Up to 150,000,000 shares Listing Premium listing on the Main Market of the London Stock Exchange Target Dividend per cent, based on the initial issue price, rising broadly in line with inflation (paid quarterly) Exclusive Portfolio Up to 101 million Deployment IPO proceeds to be invested in accordance with the investment policy within 12 months Gearing Target 30% LTV (maximum 40%) Frequency of NAV Half-yearly Management fee Sliding scale investment advisory fee: m - 1%, m - 0.9%, 500-1,000m - 0.8%, > 1000m - 0.7% 1 Investment advisory services will be provided by a UK subsidiary of Fundamentum Property Limited. 2 Based upon the initial issue price (5 pence per share once fully invested). This is a target only and not a profit forecast. There can be no assurance that the target can or will be met and should not be taken as an indication of the Company's expected or actual future results. Accordingly, potential Investors should not place any reliance on this target in deciding whether or not to invest in the Company or assume that the Company will make any distributions at all and should decide for themselves whether or not the target dividend yield is reasonable or achievable. // 06

7 The contents of this advertisement, which has been prepared by and is the sole responsibility of Fundamentum Supported Housing REIT PLC, has been approved solely for the purposes of section 21(2)(b) of the FSMA by Investec Bank plc ( Investec ) whose registered address is 2 Gresham Street, London London EC2V 7QP. Investec, which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority is acting exclusively for the Company and no-one else in relation to or in connection with the potential offer of the shares in the Company and will not be responsible to anyone other than the Company and is not providing, and will not provide, advice in relation to the offer or any matter referred to in this advertisement. The investments referred to in this advertisement may not be suitable for all investors. Any person who is in any doubt as to the suitability of the shares should seek independent financial advice. This advertisement does not constitute an offer or recommendation concerning the shares referred to in this advertisement. These materials are not directed at or accessible by persons in the United States or persons resident or located in Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction where the extension of availability of the materials to which you are seeking access would breach any applicable law or regulation. This advertisement is not for distribution or publication in any jurisdiction outside the UK. Certain investors will be able to apply for shares through intermediaries. Intermediaries may charge commissions to apply for shares and there may also be fees to continue to hold or to sell any shares that investors buy. Ask intermediaries for full details. Any prospective investor is recommended to consult an independent financial adviser. The securities of the Company have not been and will not be registered under the U.S. Securities Act of 1933, as amended the ( Securities Act ) and may not be offered or sold within the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. There will be no public offering of the securities in the United States.