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Civitas Social Housing quarterly update affirms regulator has no issue with model

Civitas adds another three properties

Civitas Social Housing quarterly update affirms regulator has no issue with model – Civitas Social Housing (CSH) has released a quarterly update, to 30 September 2019.


  • Annualised rent roll £46.5m (30 June 2019: £46.0m)
  • IFRS NAV per share 107.23p (30 June 2019: 107.21p)
  • 1.325p quarterly dividend declared
  • EPRA dividend cover 88% (EPRA run rate 96%)
  • Lease indexation targets achieved
  • New £60m NatWest debt facility secured
  • Share buy-backs commenced

CSH say that the portfolio, based on individual asset valuations, has been valued overall at 30 September 2019 at an average of 5.28% net initial yield (NIY), unchanged from 30 June 2019. The portfolio as a whole has been valued at 30 September 2019 at an NIY of 5.05% compared to 5.03% at 30 June 2019. The company says that the slight variation reflects the real estate company, Jones Lang LaSalle’s, current view of the market and comparable transactions.

Company update: Regulator says it has no issue with the lease-based model

  • In the three-month period to 30 September 2019, the company acquired five properties for a consideration of £3.5 million.
  • On 10 September 2019, the company announced a new £60m 5-year term facility with National Westminster Bank Plc that has the potential to be extended by a further £40m.
  • More recently, the RSH has issued a further risk report in relation to the entire social housing sector that is regarded as being more supportive of lease-based Housing Associations. The RSH has now stated publicly that they have no issue with the lease-based model.

Market update from CSH

“Demand for the properties provided by the company remains very strong across the UK and supported living is a preferred care solution for government and for most local authorities.

Our experience increasingly confirms that this demand is greatest for the provision of properties in which higher acuity care is delivered, as this generates the highest cost saving for the state and local authorities and the best personal outcomes for individuals.

It is also where the rental cost is at its lowest when compared with the total cost of care and accommodation combined. In some examples within the company’s portfolio the rental cost is below 5% of the total cost. This encourages care providers to enter into back to back 25-year leases with our Housing Association partners to ensure access to these specialist adapted properties over the long term.

A third of the CSH portfolio by rental income is now covered by such long-term care back-to-back care provider leases that complement the leases we hold with Housing Associations and this is expected to continue to increase over time.

The market generally has continued to evolve and now reflects the role played by significant parties such as CSH and certain other landlords, experienced in care who are designing schemes and working directly with major care providers and local authorities. This results in the delivery of high-quality bespoke buildings, both existing newly adapted properties and new build properties acquired at completion. It avoids the need to take either development or financing risk, as both of these are usually taken by large care providers or developers.

Whilst the company will continue to work with a small select group of experienced and reliable counterparties who deliver completed turn-key schemes, much is now generated and assembled directly by the company. We consider this increasingly represents a key point of differentiation that enhances our portfolio.”

Figures released by CSH this morning:

Period 30-Sept








30-Sept 2018 31-Dec 2018 31-Mar 2019 30-Jun




Investment* (£m) 284 431 472 508 619 674 758 761 764
Properties 282 384 414 440 521 557 591 594 599
Tenancies 1,820 2,405 2,621 2,845 3,440 3,746 4,075 4,094 4,114
Local Authorities 82 99 109 123 140 144 157 158 160
Housing Associations 10 10 11 12 15 15 15 15 15
Care Providers 50 59 64 71 93 98 113 113 114

CSH: Civitas Social Housing quarterly update affirms regulator has no issue with model

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