Civitas has announced a second fundraising offer with another £350m target – building on the near £300m the ambitious REIT has already spent on social homes.
Earlier this month the company confirmed it was considering options for raising additional equity capital with pipeline in excess of £500m of purchases in its sights over the next 12 months.
Now, the board has backed a new £350m target fund raise following the success in securing a similar sum through IPO in November last year.
Civitas has established a diverse portfolio of built and income generating social homes in England and Wales since, across 282 properties, 1,820 tenants, 10 housing associations, 82 local authorities and 50 care providers.
The latest £350m will be raised via a fully pre-emptive Open Offer, Placing and Offer for Subscription (including an Intermediaries Offer) of C Shares .
Civitas Housing Advisors (“CHA”) has developed a significant pipeline of further opportunities, the value of which exceeds the remaining investible equity and proposed debt finance.
At the present time the Company, through CHA, can confirm that properties with a value in excess of £160 million are under exclusivity/detailed heads of terms and it is anticipated that subject to final due diligence these will complete over coming weeks and will be funded through the Company’s remaining available cash resources and newly arranged debt financing.
The Company has also confirmed the signing of detailed heads of terms for its initial debt facilities of more than £90m with leading UK financing institutions, which have experience of lending to the social housing sector.
It is anticipated that the loan facilities will be in place around the end of October on terms consistent with those anticipated at the time of IPO, subject to final agreement.
These proceeds will then be deployed within the existing pipeline.
CHA has continued to develop numerous off-market opportunities with various vendors for the provision of a significant number of additional built social homes of a scale greater than the amount of capital invested to date.
To capitalise on these new opportunities the Company is now considering its options for raising additional equity capital.
Civitas only announced IPO in November last year.
Seeking to buy social housing stock in England and Wales – demand for its IPO exceeded the maximum gross proceeds of £350m at a pound a share, and a scaling back exercise was undertaken with respect to applications received – seeing £350m raised.
Applications were made in respect of 350 million shares to be admitted to the London Stock Exchange (LSE) Main Market.
Subsequently, Civitas became the first Real Estate Investment Trust (REIT) to be listed on LSE offering pure play exposure to built social housing.
Subsequently, CHA has identified a number of investment opportunities, including off-market portfolios.
In addition, the investment adviser has reached various commercial understandings with specific Registered Providers, independent owners, developers and suppliers of Social Homes including care providers, which are expected to deliver a significant quantity of opportunities to acquire Social Homes on terms that the Investment Adviser considers attractive for the Group.
Together, the various sources account for a pipeline in excess of £500m of social homes which may be acquired by the Group over the next 12 months.
Michael Wrobel, Chairman of Civitas, said: “The Board is very pleased to announce Civitas’ first fundraise since IPO.
“This reflects the Company’s consistent delivery against its objectives since it listed and the strength of the immediate and longer-term pipeline of investable opportunities.
“We believe the Issue will place the Company in the best possible position to capitalise on these opportunities; thereby continuing to deliver for tenants and shareholders alike.
“We would like to thank our shareholders for their continued support, together with the interest that has been shown from new investors.”