March 2021 Pipeline Update
Summary
United Response
After completing our first purchase for United Response – a charity that supports people with learning disabilities, autism and mental health needs – last month (a 3-bed bungalow in Devon, view the opportunity here), they are keen to pursue future partnerships with Assetz Exchange. They are at early stages of looking to move 12 residents out of tired shared accommodation in Devon and into newly built bungalows. We hope to be involved in the purchase and repurposing of the existing accommodation into halls for students with special needs, and the development of the new accommodation. We have also discussed two opportunities in Kent to create new self-contained accommodation for a number of current residents of shared accommodation. We hope to share more details of these if they develop over the next few months.
Nacro
Work with social justice charity Nacro continues apace, building on the commencement of leases on two houses in Nottingham towards the end of 2020. You can view this opportunity on the Exchange with a current yield of 6.7% (as of 8 March 2021). We have viewings arranged on properties in Orpington and in Swindon. We are also looking to purchase several flats in Birmingham, Leicester and Peterborough to help Nacro fulfil Local Authority contracts.
Other
We are in the process of assessing a variety of other purchases including a children’s home and a development opportunity for eco-homes. We also continue conversations with multiple providers of supported accommodation as we look to establish ourselves more firmly in this sector and offer investors a wider range of investment opportunities.
Estimated total value/timing of opportunities:
- Nacro, Croydon – £400,000: Planning declined, withdrawn from pipeline
- United Response, Devon – £371,000: Completed
- Nacro, Bristol – £235,000: Anticipated March 2021
- Nacro, Hastings – £197,500: Anticipated March 2021
- Nacro, Staines – £390,000: Anticipated April 2021
- Nacro, Birmingham – £114,500: Anticipated April 2021
- Nacro, Nottingham – £100,000: Anticipated April 2021
Profiles of property in pipeline
| Town and postcode | Bristol BS13 | Hastings TN35 | Staines TW20 | Birmingham B23 | Nottingham NG6 |
|---|---|---|---|---|---|
| Charity | Nacro | Nacro | Nacro | Nacro | Nacro |
| Area | Hartcliffe | Ore | Egham | Erdington | Old Basford |
| House type | 4-bed terraced | 2-bed terraced (converting to 3-bed) | 4-bed terraced | 2-bed apartment | 2-bed terrace |
| RICS valuation | 235,000 | 210,000 (investment valuation) | TBC | TBC | TBC |
| Purchase Price (£) | 235,000 | 197,500 | 390,000 | 114,500 | 100,000 |
| Lease length (years) | 10 | 10 | 10 | 10 | 10 |
| Net yield (funding target) | 5.6% | 6.4% | 5.4% | 5.3% | 6.5% |
| Profile | Awaiting completion date – delayed due to outstanding search results up the chain | Search and valuation complete. Schedule of work being produced. | Searches completed and have received full approval from the police and LA. | Beginning legals for purchase | Beginning legals for purchase |
Please note
RICS valuations will be carried out prior to the purchase of the properties. Given these are sometimes carried out prior to HMO conversion works they may not capture any uplift in value resulting from additional rental income that can be gained by renting a property out by the room.
Tenant profile → Nacro
Nacro is a social justice charity founded in 1966. One of Nacro’s main aims is to ensure that disadvantaged young people and adults reach their full potential in life. Good quality and appropriate housing is often the first step to unlocking this potential by laying the foundations for stability and improvement. Housing is, therefore, integral to Nacro’s work.
Over the last 50 years, Nacro has developed specialist housing knowledge and expertise in delivering housing solutions for vulnerable groups. This includes people that have experienced homelessness due to current challenges in the housing market.
Nacro currently provides a range of accommodation options including supported housing, floating support services and Nacro’s social lettings agency – Nacro Homes Agency.
They have expertise in meeting the specific needs of people who have been homeless, care leavers, young people including teenage parents, women, families, former members of the regular armed forces, victims of domestic abuse, people experiencing mental illness or impairment, people experiencing alcohol or drug issues, people leaving prison and people in wider contact with the criminal justice system.
Tenant profile → United Response
United Response were founded in 1973 with just one service in West Sussex. They now support around 2,000 people, work in 400 locations across England and Wales and employ more than 3,500 staff.
They support adults and young people with disabilities to live the life they choose. That includes people with learning disabilities, physical disabilities, autism and mental health support needs. They can help with things like day-to-day living, finding a house or a job, education, and activities in the local community.
As well as supporting people, they campaign on disability awareness and social care policy, provide expert guidance for professionals and carers and make easy to read information, like Easy News.