CIVITAS SOCIAL HOUSING PLC
(“Civitas” or the “Company“)
The Board of Civitas Social Housing PLC is pleased to announce that the Company has completed a £15m acquisition of a portfolio, with an initial net yield of 6.5%, comprising the freehold interest in 17 supported living properties in Gloucester, Weston-Super-Mare, the Wirral and Durham (the “Portfolio”). The Portfolio was sourced off – market by Civitas Housing Advisors Limited (“CHA”), the Company’s Investment Advisor.
Each of the properties within the Portfolio is subject to a 25 – year lease arrangement with one of two specialist housing associations – Westmoreland Supported Housing Association (“Westmoreland”) and IKE Supported Housing Limited (“IKE”) – focused around supported living, with rents agreed by the relevant local authority and adjusted annually in line with inflation (CPI) over the full period.
Westmoreland is a registered provider, regulated by the Homes and Communities Agency (“HCA”) and specialising in the provision of housing for people with learning and physical disabilities. IKE is a registered provider, regulated by the HCA and specialising in the provision of housing for adults with learning difficulties and autism/ASD.
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 operator for each property is in place.
In accordance with the lease terms, the Portfolio is immediately income producing on the basis of an initial net yield of 6.5% based on the purchase price of £15 million (excluding purchase costs), which itself reflects the regional location of the properties and the nature of the tenant services provided. It is intended that in due course leverage will be applied to the Portfolio in accordance with the Company’s stated policy and it is expected that this will further enhance the yield achieved from this investment.
This acquisition and that announced earlier on 15 December 2016 are intended to be part of a longer term programme of asset purchases to enable Civitas to build a nationally based, diversified portfolio of supported living properties in England and Wales and to become a leading investor in the sector.
The Portfolio will be funded through the Company’s cash resources.
Michael Wrobel, Chairman of Civitas, commented:
“We are pleased to have completed our second investment so quickly after IPO and our first investment announced last week. This further diversifies our portfolio of supported living properties and begins to broaden the number of counter party housing associations with whom we work. This acquisition is expected to deliver excellent returns for our shareholders and provides superior long term housing for a further 120 residents across the portfolio.”Download PDF