TIDMCSH
RNS Number : 9487F
Civitas Social Housing PLC
01 November 2018
1 November 2018
Net Asset Values, Investment and Market Update
1 November 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 September 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.
30 June Increase
IFRS NAV 30 September 2018 2018 %
Ordinary NAV (GBP'000) 371,209 370,388 +0.2%
------------------ ------- --------
Ordinary NAV per share 106.1 105.8 +0.2%
------------------ ------- --------
C Share NAV (GBP'000) 299,526 297,218 +0.8%
------------------ ------- --------
C Share NAV per share 99.2 98.4 +0.8%
------------------ ------- --------
In the quarter a C Share dividend of 0.75p per share was paid
amounting to GBP2.3 million. An Ordinary Share dividend of 1.25p
per share was also paid in the quarter amounting to GBP4.4
million.
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.
30 September 30 June Increase
Portfolio NAV 2018 2018 %
Ordinary NAV
(GBP'000) 403,245 402,600 +0.2%
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Ordinary NAV
per share 115.2 115.0 +0.2%
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C Share NAV
(GBP'000) 313,536 304,223 +3.1%
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C Share NAV
per share 103.8 100.7 +3.1%
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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
September 2018, the Company had acquired 522 properties in 83
transactions, which includes 162 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, 82 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 September 2018 of GBP37.3 million. This is expected to grow
further as the Company moves to full investment over coming months
and supports 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:
31-Mar 30-Jun 30-Sept 31-Dec 31-Mar 30-Jun 30-Sept
Period 2017 2017 2017 2017 2018 2018 2018
Investment*
(GBPm) 106 206 284 431 472 508 619
------- ------- -------- ------- ------- ------ -------
Properties 82 167 282 384 414 440 522
------- ------- -------- ------- ------- ------ -------
Tenancies 487 1,130 1,820 2,405 2,621 2,845 3,440
------- ------- -------- ------- ------- ------ -------
Local Authorities 32 68 82 99 109 123 140
------- ------- -------- ------- ------- ------ -------
Housing Associations 5 7 10 10 11 12 15
------- ------- -------- ------- ------- ------ -------
Care Providers 25 42 50 59 64 71 93
------- ------- -------- ------- ------- ------ -------
*excluding purchase costs
C Share Deployment Update
Total acquisitions of GBP105 million including purchase costs
were made in the quarter to 30 September 2018. As at the 30
September 2018, the Company had deployed GBP214 million after
purchase costs (GBP209 million before purchase costs but including
GBP5 million in respect of properties exchanged and expected to be
completed shortly) of the C Share equity.
The announcement of the conversion of the C Shares will be
triggered on the earlier of 90% of the C Share net proceeds being
invested or committed including purchase costs (GBP266 million) or
twelve months from the issue of the C Shares (14 November 2018).
Following this announcement both the Ordinary Share and the C Share
portfolios will be independently valued by JLL, the Company's real
estate advisers as at the nearest month end being 30 November 2018
to establish the conversion ratio for the C Shares, as per the
Company's Articles of Association. This will be determined by the
respective portfolio net asset values of the Ordinary Share
portfolio and the C Share portfolio.
Since 30 September 2018, a further GBP22 million of the C Share
equity has been invested including purchase costs, bringing the
total C Share equity invested to GBP236 million including purchase
costs. In addition the Company is undertaking surveys and the final
stages of due diligence on a number of additional properties from
the pipeline and subject to satisfactory completion these will
utilise most or all of the remaining C Share equity available for
investment prior to the conversion of the C Shares.
Market Update
The Government has continued to show its strong support for
social housing generally and Specialist Supported Housing in
particular through a range of measures including a return to the
CPI +1% maximum annual rent inflator for general needs social
housing rents, additional grant funding for Housing Associations to
develop new social housing and a confirmation that the government
consultation on Funding for Supported Housing had concluded that
funding would continue to be provided by Central Government rather
than from Local Authority budgets.
The Regulator of Social Housing (RSH) separated from Homes
England in September 2018 and will now be responsible for
regulating all social housing providers whilst Homes England will
focus solely on investment. The RSH is in consultation with the
housing sector on a range of regulatory issues to ensure their
approach is suitable for the future. This takes into account the
post-Grenfell environment and the increased focus on health and
safety and consumer rights.
The RSH has published its sector risk profile for 2018, an
annual publication which reviews what it believes to be the risks
that exist within the sector as guidance for Housing Associations.
This includes appropriate and sensible matters that Housing
Associations should consider before entering into lease
arrangements.
Demand for high quality Specialist Supported Housing is high and
there is increasing competition for assets. The company continues
to decline unsuitable transactions and utilises its relationships,
existing agreements and buying power to acquire good quality
properties at competitive prices that remain within the yield range
set out at the time of IPO in 2016, whilst noting that there has
been an element of yield compression within the market.
Dividend
The Board has declared a third quarterly dividend in respect of
the Ordinary Shares and C Shares for the three months to 30
September 2018 of 1.25 per Ordinary Share and 0.75 pence per C
Share. The dividends will be paid on or around 30 November 2018 to
holders on the respective registers as at 9 November 2018 (the
record date) and the corresponding ex-dividend date being 8
November 2018. The Ordinary Share and C Share dividends will be
paid as a REIT property income distribution ("PID").
Quarterly Fact Sheet
The Company has today published its Fact Sheet for the quarter
to 30 September 2018 and this is available to view on the Company's
website,
http://civitassocialhousing.com/investor-relations/reports-and-publications/.
For further information, please contact:
Civitas Housing Advisors Limited
Paul Bridge Tel: +44 (0)20 3058 4844
Andrew Dawber Tel: +44 (0)20 3058 4846
Cenkos Securities PLC
Sapna Shah Tel: +44 (0)20 7397 1922
Tom Scrivens Tel: +44 (0)20 7397 1915
Pagefield
Philip Dennis Tel: +44 (0)7947 868206
David Leslie Tel: +44 (0)7584 070274
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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