Triple Point Social Housing REIT (SOHO) has announced that it has completed on the sale of four specialised supported housing properties, for a total of £7,586,600, to a private UK real estate investment firm. The sale price reflects a gain of £663,136 (9.6%) against the total purchase price (excluding transaction costs) and is principally in line with the portfolio’s book value of c.£7,870,000 as at 30 June 2023. The properties sold are located across four local authorities and contained a range of property types, lessees and care providers. As at 30 June 2023, the blended NIY of the assets sold was 5.75% and the WAULT was 19.3 years. SOHO’s board says that, following the publication of the Group’s interim results on 7 September 2023 and feedback from shareholders, it will determine the best use of the sale proceeds, which may include the repayment of debt and/or the return of capital to shareholders through further share buybacks.
Comments from Chris Phillips, chair of Triple Point Social Housing REIT
“The Board is very pleased to have completed the sale of this portfolio of properties for a gain against purchase price and principally in line with its book value. The sale demonstrates continued liquidity, and the resilience of valuations in the specialised supported housing sector.”
[QD comment: At the time of writing, SOHO is trading at a 56% discount to NAV reflecting concerns over higher interest rate and what this means for debt servicing costs and property valuations. However, this latest sale gives considerable credence to the valuation methodology used to calculate the NAV and even if property valuations and debt servicing costs move up from here the current discount looks excessive to say the least and leaves a huge margin for error.]