Big spending REIT gets the once over in an independent report.

By Bill Tannner

Civitas – the REIT making the running on social housing purchases – has had the once over for an independent report.

Social advisory firm The Good Economy, examined the social impact of Civitas’ work during the nine-month period between December 2016 and September 2017.

The report found:

  • Civitas has so far committed £284m to 19 investments with 10 registered providers, comprising 282 properties
  • Civitas has worked with 45 care providers to ensure the high quality provision of care for up to 1,820 people
  • 25% of Civitas’ purchased properties have been successfully brought into the social sector creating low-rent homes for 341 people
  • 71% of purchased properties are in the 40% most deprived local authorities

In the report, The Good Economy concluded: “Civitas is committed to delivering the best quality housing and care to residents. It always takes a long-term view of the investment and only invests in properties that are intended to remain as social homes for residents with a significant proportion of investments being made in areas of high deprivation.” 

Paul Bridge, Chief Executive of Civitas Housing Advisors, said: “We are very pleased to have worked with The Good Economy to publish the first of what will be regular independent Social Impact Reports, covering the investment activities of Civitas and the additional activities in support of charitable organisations such as the national homelessness charity Crisis.”

Civitas was admitted to the London Stock Exchange in November 2016 in a £350 million offering, with the aim of raising private capital to invest in social homes across England and Wales.

The REIT is intended to provide long-term income to its shareholders while putting their capital to work for social benefit, increasing the provision of high-quality social housing to improve the quality of life of low-income and vulnerable people in social need.

Last month, Civitas announced a second fundraising offer with another £350m target – building on that near £300m spent so far on social homes.

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 this month 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.

  • A full copy of The Good Economy’s Civitas Social Housing PLC Social Impact Report 2017 can be downloaded at: civitassocialhousing.com