Net Asset Values, Investment and Market Update

RNS Number : 7045W

Civitas Social Housing PLC

03 August 2018

 

3 August 2018

Net Asset Values, Investment and Market Update

3 August 2018

CIVITAS SOCIAL HOUSING PLC

("Civitas" or the "Company")

The Board of Civitas Social Housing PLC ("Board"), the first London listed Real Estate Investment Trust ("REIT") dedicated to investing into regulated social housing in England and Wales, is pleased to announce its quarterly net asset value ("Net Asset Value" or "NAV") as at 30 June 2018.

Net Asset Values

IFRS NAV

The unaudited IFRS NAV, disclosed below, reflects an independent RICS "Red Book" valuation prepared on an individual asset basis by Jones Lang LaSalle Ltd.

IFRS NAV	30 June 2018	31 Mar 2018	Increase %
Ordinary NAV (£'000)	370,388	369,395	+0.3%
Ordinary NAV per share	105.8	105.5	+0.3%
C Share NAV (£'000)	297,218	298,752	-0.5%*
C Share NAV per share	98.4	98.9	-0.5%*

*The first C share dividend was paid in the quarter, for the extended period from inception to 31 March 2018; the total dividend paid was £3.4 million, representing 1.13p per C share. An Ordinary share dividend for the quarter ended 31 March 2018 of £4.4 million, representing 1.25p per Ordinary share was also paid.

Portfolio NAV

The unaudited Portfolio NAV, disclosed below, reflects an independent RICS "Red Book" valuation prepared on a portfolio basis by Jones Lang LaSalle Ltd.

Portfolio NAV	30 June 2018	31 Mar 2018	Increase %
Ordinary NAV (£'000)	402,600	398,505	+1.0%
Ordinary NAV per share	115.0	113.9	+1.0%
C Share NAV (£'000)	304,223	302,766	+0.5%
C Share NAV per share	100.7	100.3	+0.5%

Individual properties acquired by the Company are often relatively small in size and as such, benefit from being incorporated within a larger diversified portfolio. As at 30 June 2018, the Company had acquired 440 properties in 51 transactions, which includes 89 properties for the benefit of C shareholders.

The Portfolio NAV is intended to provide shareholders with an indication of the inherent value likely to be obtained by the sale of the portfolio as a single entity within its existing corporate structure. It is considered that comparable market transactions offer both support for the carrying value of the Company's properties on a portfolio basis and demonstrate the willingness of acquirers to pay enhanced values for larger portfolios.

Investment Update

During the period, 26 additional properties were acquired and a number of the existing leases entered into by the Company have seen their rental income increase as a result of annual indexation, which taken together has resulted in a run-rate of rental income at 30 June 2018 of £31.1 million. This is expected to grow significantly as the Company moves to full investment over the coming months which will support the Company's target dividends.

In the period since IPO, the Company has made the following investments and created a quality, nationally-based, diversified portfolio of regulated social housing in England and Wales as well as partnering with new Housing Associations and care providers in new local authorities:

Period	31-Mar-17	30-Jun-17	30-Sept-17	31-Dec-17	31-Mar-18	30-Jun-18
Investment (excluding purchase costs) (£m)	106	206	284	431	472	508
Properties	82	167	282	384	414	440
Tenancies	487	1,130	1,820	2,405	2,621	2,845
Local Authorities	32	68	82	99	109	123
Housing Associations	5	7	10	10	11	12
Care Providers	25	42	50	59	64	71

C Share Deployment Update

As at the 30 June 2018 the Company had deployed £108.5 million before costs of the C share equity, of which £36 million was invested in the quarter to 30 June 2018.

The Company is confident, based upon the current level of pipeline and due diligence of its ability to substantially deploy the net proceeds of the C share in a timely manner consistent with the terms of the conversion of the C shares into Ordinary shares as set out in the C share prospectus. This is expected to be supported by several significant transactions that are targeted to be announced shortly and which have been subject to ongoing due diligence. In particular, the Company expects to complete a number of material acquisitions in the near term with an expected value of circa £100m.

The Company has also continued to expand the network of Housing Associations and care providers that it interacts with, to further diversify the portfolio. The Company is well progressed with its due diligence in respect of several potential new Housing Association partners that it is seeking to work with during 2018.

Market Update

The need for increased levels of housing of all types and tenures continues to be a prominent political issue. The government is continually investigating various initiatives to try and meet the target of 300,000 new homes per annum that was set earlier in the year.

The restriction in housing provision and growing demand for specialist supported housing has resulted in significant and growing demand for good quality properties tailored to provide healthcare in the community. A recent report commissioned jointly by Mencap and Housing LIN expects the need for Specialist Supported Housing, in particular, to increase by up to 23% by 2027/28. 

Against this background Specialist Supported Housing remains very much in demand with a range of both private and public buyers seeking to purchase properties and with an element of upward pressure on pricing as a result. Despite this, the Company utilises its relationships, existing agreements and buying power to acquire good quality properties at competitive prices that remain firmly within the yield range set out at the time of IPO in 2016.

Dividend

The Board has declared a second quarterly dividend in respect of the Ordinary and C shares for the three months to 30 June 2018 of 1.25 pence per Ordinary share and 0.75 pence per C share.  The dividends will be paid on or around 7 September 2018 to holders on the respective registers as at 17 August 2018 (the record date) and the corresponding ex-dividend date being 16 August 2018. The Ordinary share dividend will be paid as a REIT property income distribution ("PID"); the C share dividend will be paid as an ordinary dividend.

Quarterly Fact Sheet

The Company has today published its Fact Sheet for the quarter to 30 June 2018 and this is available to view on the Company's website, http://civitassocialhousing.com/investor-relations/reports-and-publications/.

http://civitassocialhousing.com/investor-relations/reports-and-publications/

For further information, please contact:

Civitas Housing Advisors Limited

Paul Bridge                           Tel: [phone]

Andrew Dawber                    Tel: [phone]

Cenkos Securities PLC

Sapna Shah                           Tel: [phone]

Tom Scrivens                        Tel: [phone]

Pagefield

Philip Dennis                        Tel: [phone]

David Leslie                         Tel: [phone]

Notes:

Civitas Social Housing PLC is the first Real Estate Investment Trust offering pure play exposure to social housing in England and Wales. The Company is managed by Civitas Housing Advisors Limited. The Company's Ordinary shares are listed on the premium listing segment of the Official List of the Financial Conduct Authority and were admitted to trading on the main market for listed securities of the London Stock Exchange in November 2016.

 

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