Social Housing REIT (LSE:SOHO) agreed to acquire ReSI's senior living Portfolio for a headline purchase price of £108.29m, with the company disclosing £45m payable in cash on completion and a £1m amount deferred pending final completion accounts.
The property company says the cash on completion will be funded from its own resources together with a drawdown of £30m under a new Barclays facility, transaction costs are expected to be c.£3.8m, and the final purchase price will be adjusted on a pound-for-pound completion accounts mechanism.
“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,” Jos Short, Chair, said.
The acquisition includes long‑dated, portable and partially amortising debt provided by Scottish Widows with an attractive all‑in cost of 3.46% and final maturity in 2043, and the Enlarged Group’s combined weighted average cost of debt is expected to be c.3.15% with a weighted average maturity of 9.1 years.
The company expects the deal to be high‑single-digit earnings accretive in the first full year after completion, says pro forma gross asset value will rise to around £831.4m and EPRA NTA to £471.4m while Net LTV on completion is expected to be c.45% with a medium‑term target of 40%.
Atrato Group will acquire the Portfolio’s Property Manager (trading as My Future Living) for a nominal sum so the manager, which has over 25 employees and operates on a cost pass‑through basis with no profit paid, continues to provide services after completion.
Completion remains conditional on shareholder approval at a General Meeting and on Scottish Widows not revoking its consent, with the General Meeting the next formal milestone.
