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Civitas Social Housing – Socially beneficial investing

12
2018
June

Civitas Social Housing – Socially beneficial investing

180612 CSH Initiation QD

In a world where investors want above-average, predictable, inflation-linked income; returns from an asset class whose values do not move in-line with equity markets; the ability to buy and sell easily; AND the chance to invest in a company that provides a clear benefit to society, few investments make the grade. However, Civitas Social Housing (CSH) could be said to tick all the boxes.

CSH is helping to inject fresh equity capital into housing associations and is releasing capital for reinvestment by other parties. In turn, this allows them to build new social housing for the neediest in society.

CSH has deployed over £500m since launch. Around £200m of cash from its C share issue last November is still to be invested. The manager says that it expects the pace of investment to accelerate over coming months. Once the issue proceeds have been invested and CSH reaches its target gearing level, QuotedData’s model estimates that its 5 pence per share dividend will be covered by earnings.

Income and capital growth from social housing

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 company expects that these will benefit from inflation adjusted long-term leases or occupancy agreements with Registered Providers and that they will deliver, on a fully invested and geared basis, a targeted dividend yield of 5% per annum on the issue price. CSH intends to increase the dividend broadly in line with inflation.

CSH : Civitas Social Housing – Socially beneficial investing

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