The Civitas spend on social housing tops £500m with the latest portfolio purchase for a PLC only started in November 2016.
Since that IPO, Civitas now provides accommodation for nearly 3,000 vulnerable adults across 122 local authorities, in partnership with 12 registered providers and 72 care providers.
Civitas chairman Michael Wrobel said the “landmark” £500m figure is “testament to the hard work of our manager, Civitas Housing Advisors, our growing reputation in the sector and the strength of the long-term relationships we are building.”
The latest acquisition – announced this week – is of five specialist supported living properties for just over £9m and made up of 43 tenancies with properties managed by registered providers Chrysalis Supported Association Ltd, Encircle Housing Ltd, and Falcon Housing Association.
Chrysalis, Encircle and Falcon are counterparties to leases within the company’s existing portfolio.
Sourced off-market by Civitas Housing Advisors Limited, the company’s investment manager, the properties have been – or will be – adapted for use as specialist supported living accommodation for tenants with learning disabilities and other needs, and there is a care provider in place at each property.
The properties are subject to 25-year leases with rents adjusted annually in line with CPI over the full period.
All Civitas properties are managed by registered providers, regulated by the regulator of social housing and have been immediately income-generating with initial net yields in line with the company’s expectations.
Acquisitions are sourced off-market by Civitas Housing Advisors Limited, the company’s investment manager.
Each property is subject to a long-term FRI based lease indexed at either CPI or CPI+1. During the company’s financial year to 31 March 2019, it is expected that 100% of leases will enjoy an indexation increase.
All properties are funded through the company’s cash resources from the company’s ordinary shares and more recently issued C shares.
In due course, it is intended that leverage will be applied to the entire portfolio in accordance with the company’s stated policy and it is expected that this will further enhance the yield achieved from this investment.
Civitas targets the objective of delivering sustainable returns to its shareholders by making socially relevant investments within the regulated social housing sector in England and Wales.