GCP Infrastructure on First Priority Housing – Civitas Social Housing was not the only fund with exposure to First Priority Housing, the housing association that got itself into difficulties when it ended up with a lot of empty properties. On 22 February 2018 the Board of GCP Infrastructure announced that the directors and the investment adviser, Gravis Capital Management, were monitoring events in relation to First Priority Housing Association Limited.
As at 31 March 2018, the company was exposed to a loan to Supported Living Infrastructure Ltd to finance supported living units for occupation by adults with learning or physical difficulties. The loan is secured on a senior basis against a portfolio of 24 underlying properties in England and Wales let to c.200 tenants. The properties were subject to fully repairing and insuring 35-year leases with First Priority, and represented c.3.7% of the company’s total assets as at that date.
The leases on Civitas’ properties were assigned to Falcon Housing Association CIC and the company reckoned that the whole experience cost them £350,000. GCP Infrastructure has announced this morning that each of the 24 leases against which its loan is secured has been assigned to Bespoke Supportive Tenancies on terms which they believe, following discussions with its advisers, will have no material impact on the net asset value.
Bespoke Supportive Tenancies is a national, not for profit registered provider of social housing for vulnerable adults that operates nationwide and has a presence in all major regions. It is a registered charity which works in partnership with a wide range of local authorities and care providers. It obtained its Homes and Communities Agency (now the Regulator of Social Housing) registration in June 2012.
[QD comment: we covered this issue from Civitas’ point of view in our note published on 12 June (see page 12). The events with First Priority unnerved some investors. GCP Infrastructure’s shares hit a low of about 112p afterwards and Civitas’ shares dived to 95p. GCP always said the hit would be minimal, however. Today GCP’s shares are trading at 119p and Civitas is trading at 104.75p.]
GCP / CSH : GCP Infrastructure on First Priority Housing
Great opportunity???!