Triple Point Social Housing REIT has proposed making changes to its investment policy and investment restrictions.
In summary, the company proposes to make the following changes to its investment policy and investment restrictions:
- Removing the company’s minimum lease term restriction
- Allowing the company to selectively take on the cost of funding planned maintenance
- Giving the company the ability to enter into leases which are subject to upward only adjustments, tracking either inflation or central housing benefit policy.
Rationale
The Regulator of Social Housing has publicly commented on the risks associated with leases in the specialised supported housing sector. The group said that increasingly housing association tenants are looking to evolve the terms of the leases they enter into going forward, in part to address the observations made by the regulator. Simultaneously, over the last six months the investment manager has seen an increasing prevalence of new lease structures in the sector and the endorsement of those new lease structures by other investors.
The company said the proposed change to its investment policy and investment restrictions were to ensure it has the flexibility to allow tenants to accommodate points raised by the regulator, and thereby remain an attractive partner to it.
The company said that the investment manager has identified a pipeline of investment opportunities that incorporate lease terms compatible with the proposed changes to the investment policy. These opportunities, it said, were consistent with the company’s income and capital return targets, and are supported by formal valuation advice from the company’s independent valuer, JLL.
Shareholder and regulatory approval
The proposed amendments constitute a material change to the company’s published investment policy and therefore require approval from the Financial Conduct Authority and shareholders. Shareholder approval will be sought by way of an ordinary resolution which will be proposed at the company’s Annual General Meeting to be held on 27 May 2022.
SOHO : Triple Point Social Housing REIT to amend investment policy