Civitas Social Housing has completed the purchase of a portfolio of regulated social housing for a total consideration of £17 million, comprising the freehold interest in 16 supported living properties, with 92 tenancies, across the south of England. The portfolio is immediately income generating with an initial net yield of 6.0%, based on the purchase price (excluding purchase costs) and was sourced off-market by Civitas Housing Advisors Limited, the Investment Adviser.
Each of the properties within the portfolio is subject to a 25-year lease with one of two specialist Housing Associations – Westmoreland Supported Housing Association and Trinity Housing Association – focused around supported living, with rents established by the relevant local authority and adjusted annually in line with inflation (CPI) over the full period.
Both Housing Associations are Registered Providers, regulated by the Homes and Communities Agency. Westmoreland is a counterparty to leases within the Company’s previous portfolios. Trinity provides bespoke accommodation that is designed to meet the needs of vulnerable adults. It was founded in 2006 to develop and manage supported living schemes and currently provides in excess of 800 tenancies across 10 local authorities.
The properties in the portfolio have been, or will be, adapted for use as specialist supported living homes for tenants with physical and/or mental disabilities or other care needs, and a care provider for each property is in place.
The portfolio was funded through existing cash resources. In due course it is intended that leverage will be applied to this portfolio in accordance with stated policy and it is expected that this will further enhance the yield achieved from this investment.
Following this acquisition, Civitas has invested £106 million (excluding purchase costs) in 487 tenancies and 83 individual properties across the country. This represents an increasingly diversified portfolio of built and yielding social homes, each maintained by one of five different Housing Associations.
The social homes owned by Civitas are provided on a long-term basis to Housing Associations with a wide range of tenants who vary in age profile and in the level of support that each receives.
By acquiring these social homes, and working with Housing Associations, Civitas seeks for tenants to experience a stable, high-quality living environment that offers good visibility of tenure and further the Company promotes “additionality” by the provision of new equity capital that has the potential to be redeployed in the delivery of new social homes.
Civitas targets the objective of delivering sustainable returns to our shareholders by making socially relevant investments within the regulated social housing sector in England and Wales.
Michael Wrobel, Chairman of Civitas, commented: “With the acquisition of this additional portfolio of properties, Civitas has successfully deployed £106 million of capital into the social housing sector. This is very much in line with the strategy we set out at the time of the Company’s IPO in November. As it currently stands, Civitas’ overall portfolio comprises a diverse range of social housing across England and Wales.”
CSH : Civitas invests a further £17m