The Board of Civitas Social Housing PLC is pleased to announce the Company has completed the purchase of a portfolio of regulated social housing for a total consideration of £4.8 million, comprising the freehold interest in five supported living properties, with 28 tenancies, in the South West of England. The portfolio is immediately income generating with an initial net yield in line with the Company’s expectations and was sourced off-market by Civitas Housing Advisors Limited (“CHA”), the Company’s Investment Manager.
Each property is subject to a 25-year lease with a specialist Housing Association – Falcon Housing Association C.I.C. (“Falcon”) – focused around supported living, with rents established by the relevant local authority and adjusted annually by inflation (CPI) over the full period. Falcon is a Registered Provider, regulated by the Homes and Communities Agency (“HCA”) and is a counterparty to leases within the Company’s previous portfolios.
The properties in the portfolio have been adapted for use as specialist supported living homes for tenants with physical and/or mental disabilities or other care needs, and a care provider for each property is in place.
The portfolio was funded through the Company’s cash resources. In due course, it is intended that leverage will be applied in accordance with the Company’s stated policy and it is expected that this will further enhance the yield achieved from this investment.
The social homes owned by Civitas are provided on a long-term basis to Housing Associations with a wide range of tenants who vary in age profile and in the level of support that each receives.
By acquiring these social homes, and working with Housing Associations, Civitas seeks for tenants to experience a stable, high-quality living environment that offers good visibility of tenure and further, the Company promotes “additionality” by the provision of new equity capital that has the potential to be redeployed in the delivery of new social homes.
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.