Civitas Social Housing Share Discussion Threads

[noiseboy] 10/8/2022 10:07

Yep , agreed. Added some more today

[spoole5] 10/8/2022 07:06

Excellent update, should return to 100 plus in due course.

[spoole5] 06/7/2022 14:58

Was last week capitulation?

[badtime] 05/7/2022 23:01

Tipped by Questor over the wkd

[spoole5] 04/7/2022 10:32

Some sanity returning here

[novision] 02/7/2022 11:20

Thanks for the feedback. That was an interesting link about the shorting activity spoole5. Will take my divi and keep watching.

[spoole5] 01/7/2022 20:27

https://www.msn.com/en-gb/money/other/a-housing-market-crash-wont-derail-us/ar-AAZ3Ust

[giltedge1] 01/7/2022 19:26

Luckily I got out of this one at a profit, a few months back the market can be very cruel.

[saltaire111] 01/7/2022 19:25

Novision - the risk is that the tenants default. I don’t really understand the negative sentiment - it looks overdone. You’re right in that the end users are funded by the public purse so the risk of default is not particularly high.

I’m already up to my allocation limit for this share so I’m not buying more. But if I wasn’t holding, I would be buying in now.

Salty.

[novision] 01/7/2022 17:09

Dipped my toe in here today. Can't really see why it has fallen so far. Have I missed something?? A- debt, 5.7p div p.a. Government backed clients. What's not to like?

[alanpro1] 01/7/2022 15:28

Bare in mind NAV rises to 120p if the whole portfolio is bought as a whole. Didn't Civitas recently partner with a large shareholder from Hong-Kong? Wonder if they are sniffing around?

[george stobbart] 01/7/2022 15:23

avoid this ponzi scam. it's heading to zero

[alanpro1] 01/7/2022 15:23

Looking at the shareholder register it could be Tilney Smith & Williamson fully exiting. Either way this looks like capitulation to me.

[polmonkeys] 01/7/2022 15:16

@indalo thanks for correcting, fat finger trade! I do stand by what i wrote though.

[spoole5] 01/7/2022 15:14

Well do you want to rely on businesses paying you into a recession or a local authority?

[indalo] 01/7/2022 15:09

this is on an 8.1% yield if they pay 5.7p next year.

[polmonkeys] 01/7/2022 15:03

I must be missing something here. Current yield is 8% at this price. All that article is saying is that if theres a shortfall in rent then csh receives less however how is this any different from any commercial landlord. During the last 2 covid years commercial landlords have been hammered with reduced rent paid. Even with a degree of shortfall the current yield would have to fall a long way to justify a share price under 90p. Looks like to usual overreaction that seems typical in a market driven by computer trading.

[spectoacc] 01/7/2022 15:00

@CWA1 - those are the occupants I believe.

[cwa1] 01/7/2022 14:42

I've taken a teeny punt on it at 69p in the hope it is overcooked(the fall)-but clearly not for widows and orphans!

[spectoacc] 01/7/2022 14:29

@pmusgrove123 - "..Putting individuals with significant care needs on the street.." isn't what it's about IMO. It's about whether CSH keeps getting their ever-rising rent roll. Market says not.

[spoole5] 01/7/2022 13:56

Well that's the dividend gone in one day!

[pmusgrove123] 01/7/2022 12:39

I don't know who in the Times wrote this but my view is that they do not understand how the contracts between Local Authorities, care providers, Housing Associations and providers of properties (such as Civitas) work. There is no "annual settlement" from "the government" as stated in this article. Care providers generally have five year contracts, which are normally rolling, with Local Authorities. They then pay the rent to either a Housing Association or a REIT such as Civitas. Demand for this type of property is not going to diminish so one way or another the rents will be paid; the political fall out of putting individuals with significant care needs on to the street is too great for the system to fail. At a 26% discount and a yield of 7% the advice to Avoid is wrong!

[toffeeman] 01/7/2022 12:20

The Times today

Civitas Social Housing Reit
A dividend yield of 6.9 per cent, backed by leases of about 25 years with an inflation link, what’s not to like about Civitas Social Housing Reit? In short, the fact that the income stream, and the dividend paid out of it, is actually less secure than might be assumed for a landlord whose rental payments are ultimately funded by local government.

The social housing Reit (real estate investment trust) is struggling to pick itself back up after an attack by the short-seller Shadowfall, which alleged, among many other gripes, that many Civitas tenants were in “significant financial difficulty”.

Civitas has emphasised the “long-term structural demand” for its homes, which house adults with learning or physical disabilities and mental health problems, as well as its ability to reassign leases in the event a housing association runs into financial trouble. Still, investors are unnerved. The shares trade at a 26 per cent discount to the Reit’s net asset value at the end of March.

Civitas leases homes to housing associations, who recoup rents from local authorities. But this produces a mismatch between the 25-year lease the housing association is tied into with Civitas and the annual settlement they receive from the government.


A new draft clause is set to be introduced, which would allow a housing association tenant to only pay what they can if they have a shortfall in their own income.

The clause is designed to address the “technical mismatch” that has come under renewed scrutiny by the regulator. But that leaves the risk that Civitas is still forced to impair rent that a tenant cannot meet. Last year, rents were collected as expected and net rental income rose by 6 per cent.

Unlike Reits such as Impact Healthcare Reit and Target Healthcare Reit, which lease properties to care home providers, Civitas does not produce a rent cover figure either, which makes judging the financial strength of tenants more difficult. A low level of diversification amplifies the risk of any tenant running into difficulty, with the Reit’s leading three tenants accounting for more than half the company’s rental income.

ADVICE Avoid
WHY Concerns around security of income stream

[campervan1] 01/7/2022 12:08

Well, the results didn't look that bad to me, so what's going on here!? Still the fallout from Shadowfall? Still question marks over the business model? Uncertainty around the proposed new regulatory clause?
Making me a bit nervous to add, but tempting:

5.7p @75 share price -> 7.6% yield!

[pmusgrove123] 01/7/2022 12:01

Vulnerable to what?