In QuotedData’s morning briefing 21 April 2023:
- The Regulator of Social Housing has published an enforcement notice on Auckland Home Solutions, a tenant of Triple Point Social Housing REIT (4.6% of income) and Civitas Social Housing (15.9% of income). The enforcement notice follows on from the regulator’s ongoing engagement with Auckland and the regulatory notice that was published on 13 August 2021. The regulator has directed Auckland to commission an independent review focused on appraising governance, business planning, risk management and compliance with the rent standard. Following the conclusion of the review Auckland must develop, and submit to the regulator, an action plan to achieve compliance. In addition, the regulator has appointed three new board members to Auckland’s board to improve its capacity and capability. [QD comment: Regulatory intervention in the social housing sector can only be a good thing, as standards are driven up and maintained across the relatively nascent sector. Both Civitas and Triple Point have stated that they are working with their housing association tenants, along with the regulator itself, to help improve standards. Some people seem to have linked these issues with that of Home REIT. They are completely different sub-sectors, with completely different characteristics. Firstly, the social housing sector is regulated (while the homeless sector is not), which means unscrupulous housing associations are easily identified. Secondly, high-acuity care is given at the vast majority of social housing properties – requiring the homes to be specially adapted to meet these requirement (again, this is not the case with homeless accommodation). Due to the care needs of the underlying tenants, they will be residents of the home for the rest of their lives (with an average age in Civitas’s portfolio of around 35 years). This is why the manager argues that long leases are appropriate to match up with the long-term care needs of the underlying tenant. The properties that Civitas and Triple Point provide not only save money for the taxpayer (with the alternative being NHS beds) but have been proved to improve quality of life and outcomes for residents. Demand for such accommodation is also on the rise (exacerbated by the priority of the NHS to unlock beds).]
- International Public Partnerships (INPP) has amended the terms of its Corporate Debt Facility (CDF), agreeing to increase the committed size of its existing CDF from £250m to £350m. In addition, INPP will retain a flexible ‘accordion’ component which, subject to lender approval, allows for a further increase in the committed size of the facility to £400m. The maturity date of the CDF has also been amended from March 2024 to June 2025. The key pricing terms remain unchanged. These are: a margin of 165bps over EURIBOR for euro drawings and 170bps over SONIA for sterling drawings; and a ratchet mechanism applies to the commitment fee such that it varies between 50bps and 90bps depending on the level of utilisation. The banking group for the CDF remains unchanged and comprises National Australia Bank, The Royal Bank of Scotland International, Sumitomo Mitsui Banking Corporation and Barclays Bank. As at 20 April 2023, the facility was undrawn from a cash perspective but with c.£17m committed via letters of credit for near-term pipeline investments. The funding available under the CDF will be used to finance the company’s investment pipeline, including the Moray East OFTO and the portfolio of five operational assets in New Zealand.
- Urban Logistics REIT (SHED) is proposing a change in its management agreement that will see Logistics Asset Management LLP, which currently undertakes the day-to-day running of the company through asset management services, take over from PCP2 (which is part of the Pacific Investments Group) as investment adviser to SHED. Pacific will transfer its interests in the investment adviser to Richard Moffitt and Christopher Turner. This will mean that the existing management team – principally Richard and Christopher – will continue to lead the management of the company. The investment adviser’s appointment is to be extended for a further three years from 12 May 2024 and may be terminated on one year’s notice from 12 May 2026 onwards. As part of the plans, G10 Capital Limited will succeed PCP2 as the AIFM to the company. Under the terms of the proposal (which will be voted on by shareholders on 11 May 2023), the annual advisory fee will also be reduced from May 2024. An annual fee will be calculated as follows: 0.9% of EPRA NTA up to £250m (previously 0.95%); 0.825% up to £500m (previously 0.9%); 0.775% up to £1bn (previously 0.85%); and 0.75% above £1bn (previously 0.85%). Based on the company’s 30 September 2022 EPRA NTA, the new arrangements would save around £414,000. Both Richard and Christopher have considerable sector knowledge and have a long track record of success in logistics and real estate, built up over more than 25 years. The manager identifies and acquires assets (the majority of which have been sourced off-market, utilising its contacts and reputation in the sector) and implements its asset management strategy to create value for shareholders.
We also have
- HydrogenOne Capital Growth – merger of Cranfield Aerospace Solutions with Britten-Norman
- Annual results from abrdn European Logistics Income
- Annual results from Aurora