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Civitas borrows £90m to continue investment
Civitas, the first social housing real estate investment trust (REIT), has borrowed £90m to invest further in the sector.
As it approaches the limits of the £350m invested at its initial public offering (IPO), the funding, secured from “leading UK financing institutions” with “experience of lending to the social housing sector”, will expand the REIT’s capacity.
It has invested £284m in the supported housing sector, generating income from 282 properties with 1,820 tenants of 10 housing associations. Of these 10, nine have fewer than 350 units and all have fewer than 1,000.
Civitas, which was the first in a spate of new REITs in the sector when it launched at the end of last year, has identified further properties worth more than £160m which will all be bought subject to due diligence. The news comes as UK inflation climbs to its highest level in more than five years – 2.9% – increasing the speed at which rents paid by associations to REITs offering inflation-linked deals will rise.
The investment vehicle buys supported housing properties and leases them to small housing associations with rents linked to inflation. The Homes and Communities Agency has warned housing associations without much business expertise to ensure they understand all the implications of such deals before getting involved with REITs.
Michael Wrobel, chair of Civitas, said: “We are very pleased with the company’s progress since IPO and are on track to be fully invested within the timescales indicated at IPO. In a short time, the company has established itself as a leading owner of built social homes, providing a very considerable number of people with high-quality homes that suit their particular needs on a long-term basis.
“Civitas now has the potential to strengthen this position further through additional investment. We are grateful for the support and encouragement of the company’s shareholders and the hard work of the team and our advisors.”
