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REIT calls homes leased to non-compliant association ‘attractive assets’

Real estate investment trust (REIT) Triple Point has told investors that homes leased to a housing association recently declared non-compliant by the regulator are “attractive assets”.

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Picture: Getty
Picture: Getty
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Triple Point REIT has said homes leased to a housing association recently declared non-compliant are “attractive assets” #ukhousing

It made the claim in an update to the stock market regarding the housing association Inclusion, which was declared non-compliant for both governance and financial viability in a scathing report from the Regulator of Social Housing at the end of last week.

Triple Point owns 60 homes that are leased to Inclusion, representing, it said, about 21% of the company’s property portfolio, measured by value.

These homes are all supported living properties, which house adults with physical and mental disabilities.


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Inclusion is obliged to pay monthly index-linked lease payments to the REIT, which has similar agreements with other housing associations.

The English regulator said that it “lacked assurance” that Inclusion would be able to protect its homes and tenants, “should risks crystallise”.

It said that Inclusion’s strategy to mitigate against such market risks was to rely on renegotiating its lease agreements with the various funds that own its homes.

As well as Triple Point, these include Civitas – another REIT – and Supported Housing Investment Partnership, a partnership between higher education pension scheme the Universities Superannuation Scheme and construction company Morgan Sindall.

In its update to the stock market, Triple Point said: “Inclusion continues to meet all of its obligations, including rent payments, under the terms of the leases with the company.

“As with all properties acquired for the company’s portfolio, the manager confirmed local demand, the suitability of the rental levels and the quality of those assets owned by the company and leased to Inclusion at the time of acquisition.

“Given the ongoing local authority support and the contractual obligations of the care providers attached to the properties, the manager and the board remain of the view that these are attractive assets.”

Both Triple Point and Civitas continued to strike lease deals with Inclusion after the regulator began its investigation into the housing association, placing it on its ‘grading under review’ list.

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