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First social housing REIT posts profits in annual results

The UK’s first social housing real estate investment trust (REIT) has made £36.9m profit since launching in November 2016, it announced today.

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Picture: Getty
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Civitas posts profit as it clears £500m investment #ukhousing

Issuing its annual results at the end of the financial year, Civitas, which buys up specialist supported housing and leases it to housing associations, also noted that its annual rent roll stood at £28.4m.

The results came a day after it announced that it has now spent over £500m on 433 properties in 122 local authority areas around the UK. This amounts to around 2,800 homes, meaning Civitas has spent an average of £178,000 per home.

Today, the REIT also added £20m more debt to its existing loan from Lloyds Bank, bringing the revolving credit facility up to a total of £60m.


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Michael Wrobel, chair of Civitas, said: “The investment advisor has identified a further pipeline of opportunities and is engaged presently in conducting detailed due diligence on those that are near term and evaluating further those for purchase later in 2018 and beyond.

“As part of this work, the investment advisor continues to build relationships with potential vendors, particularly care providers who today form a growing element of the pipeline overall in addition to housing associations and other private vendors.”

Civitas added that it expects about £100m worth of this pipeline to be available “in the near term”.

In the update, Civitas also said that it had made “various enhancements” to its due diligence process following the issues faced by First Priority, until recently one of its partner housing associations.

First Priority, which was previously obliged to pay £2.4m in annual rent to the REIT was censured by the Regulator of Social Housing in February for a “fundamental failure of governance”.

Civitas responded by transferring the homes to another of its partners, Falcon Housing Association. According to the annual results, Falcon was already obliged to pay £4.2m annually in rent.

With the First Priority rents added, this figure has risen to £7.1m, meaning Falcon and Westmoreland – which is obliged to pay £9.9m – together account for 60% of Civitas’ total rental income.

Update: at 17.38 on 14.6.18 This story was updated to clarify how many homes Civitas has bought.

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