Investment Trust Insider on Civitas and Horizon
James Carthew: I hope Horizon revives faith in social housing
Horizon Housing (HZN) real estate investment trust (Reit) is the latest launch in the burgeoning social housing sub-sector. At one point, investors were falling over themselves to invest in this area, attracted by its stable, secure and inflation-linked returns.
However, all is not so rosy now: the last attempted launch, Fundamentum Supported Housing Reit, failed to get off the pad; Triple Point Social Housing (SOHO) Reit’s C-share issue (SOHC) in March targeted £200 million but raised just £47.5 million; the sector’s flagship, Civitas Social Housing (CSH), trades at a 7.6% discount to its last published NAV (for its ordinary shares, as at 31 December); and Residential Secure Income (RESI) has resorted to share buybacks as a way of addressing its discount as investors despair about its pace of investment.
The first thing I would say is that I think there is room for another investment company specialising in this area but I understand why some investors look warily at the proliferation of these Reits. The sector has expanded rapidly over the past couple of years (there are already four funds with exposure to this area) but the scale of the addressable market is vast.
The two largest funds, Civitas and Triple Point, do not appear to have had any problem in building their portfolios… read more here