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Civitas Social Housing reports “a strong start”

12
2018
June

Civitas Social Housing reports “a strong start” – Civitas Social Housing REIT (CSH) aims to provide its shareholders with an attractive level of income, together with the potential for capital growth from investing in a portfolio of social homes. The homes are let to local authorities or housing associations.

The objective of Civitas Social Housing is to acquire high-quality properties off-market and to seek to ensure that Civitas benefits from the widest possible choice and range of potential properties that offer diversity of underlying tenants and mid to upper level care acuity.

Since the company was launched following in November 2016, the proceeds of £350m from the IPO were fully invested by December 2017. There was a further £302m of capital raised through a C share issue in November 2017 and the proceeds of that raising are being invested.

The company has acquired 414 properties in the period from 18 November 2016 to 31 March 2018, across 109 local authorities. They are based on long-term leases usually 25 years and rents linked to inflation, signed with 11 housing associations, providing accommodation for 2,621 tenants supported by 64 care providers.

As at 31 March 2018, the IFRS net asset value of the company was 105.5p representing an increase of 7.7% since the IPO price of 98p per ordinary share, giving a total return of 10.7% (including dividends paid of 3p per share in the period).

Outlook from the chairman, Michael Wrobel

“There remains a chronic shortage of all forms of social housing in the UK, including Specialist supported housing. The Company will look to continue to build on the successful deployment to date and further enhance the portfolio. The Investment Adviser has identified a pipeline of social homes that may be acquired by the Company over the next 12 months, of which approximately £100 million is expected to be available in the near term. The Investment Adviser will continue to implement a disciplined policy focused on quality opportunities, whilst rejecting others on the grounds of quality, location and value for money in addition to a number of other factors.

As at 31 March 2018 the Company’s Portfolio is spread across England and Wales, reflecting the Company’s objective of creating a coherent yet diversified portfolio:

KEY REGION COUNTY PROPERTIES TENANCIES
1 North East Durham 58 365
2 York & Humber South Yorkshire 11 81
3 York & Humber West Yorkshire 8 118
4 North West Cheshire 1 13
5 North West Lancashire 26 85
6 North West Merseyside 26 183
7 East Midlands Derbyshire 3 10
8 East Midlands Leicestershire 17 106
9 East Midlands Lincolnshire 4 39
10 East Midlands Northamptonshire 4 13
11 East Midlands Nottinghamshire 12 97
12 West Midlands Staffordshire 11 71
13 West Midlands Warwickshire 10 38
14 West Midlands West Midlands 43 121
15 West Midlands Worcestershire 10 44
16 East Bedfordshire 2 25
17 East Cambridgeshire 9 25
18 East Essex 2 8
19 East Hertfordshire 1 13
20 Greater London Greater London 24 326
21 South East Berkshire 4 29
22 South East Buckinghamshire 1 1
23 South East East Sussex 2 8
24 South East Hampshire 12 66
25 South East Kent 8 90
26 South East Oxfordshire 4 19
27 South East Surrey 8 53
28 South West Cornwall 14 110
29 South West Devon 5 19
30 South West Dorset 37 250
31 South West Gloucestershire 27 126
32 South West Somerset 5 41
33 South West Wiltshire 1 3
34 Wales Gwent 2 10
35 Wales West Glamorgan 2 15
Total 414 2,621

More on Civitas Social Housing

Civitas Social Housing aims to achieve inflation adjusted long-term leases or occupancy agreements with registered providers. The company is seeking to deliver, on a fully invested and geared basis, a targeted dividend yield of 5% on the issue price, which they expect will increase broadly in line with inflation.

Civitas works in partnership with Housing Associations and Local Authorities (together “Registered Providers” ) to help them unlock capital held in existing social homes for new development and to promote the delivery of new social homes. Civitas does not develop or manage social homes directly but works in close collaboration with Registered Providers and others who provide these services.

Civitas’ investment activity supports housing providers with the provision of permanent capital to facilitate their objective of delivering more social homes and offers investors the potential for sensible, risk adjusted real returns with regular dividend distributions.

The Civitas team has, over many years, been responsible for managing some of the larger portfolios of social homes in England and Wales as well as building many new social homes.

CSH : Civitas Social Housing reports “a strong start”

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