Civitas Social Housing PLC has completed the purchase of a portfolio of regulated social housing for a total consideration of GBP3.5 million, comprising the freehold interest in 3 supported living properties, with 13 tenancies, in the West Midlands and South East 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 .
Each of the properties within the portfolio is subject to a 25-year lease with one of three specialist Housing Associations – Westmoreland Supported Housing Association, Trinity Housing Association and Hilldale 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. These Housing Associations are all Registered Providers, regulated by the Homes and Communities Agency (“HCA”) and are all counterparties to leases within the Company’s previous portfolios.
The properties in the portfolio have been 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 the Company’s cash resources. In due course, it is intended that leverage will be applied to this portfolio in accordance with the Company’s stated policy and it is expected that this will further enhance the yield achieved from this investment.
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.
CSH : Civitas invests another £3.5m