Civitas Social Housing PLC Acquisition (8917Z)

TIDMCSH

RNS Number : 8917Z

Civitas Social Housing PLC

20 December 2017

20(th) December 2017

CIVITAS SOCIAL HOUSING PLC

("Civitas" or the "Company")

GBP121.5 million Acquisition of Specialist Supported Living and Mental Health Properties

The Board of Civitas Social Housing PLC is pleased to announce that the Company has completed the acquisition of 57 properties, comprising 405 tenancies or places, for a total consideration of GBP116.6 million. The Company has also exchanged contracts (with completion expected shortly) for the acquisition of 4 properties, comprising 22 tenancies for a consideration of GBP4.9 million.

This builds upon the Company's existing portfolio of specialist supported living properties and diversifies further the range of underlying tenancies or places, each within the regulated social housing sector in England and Wales and each managed by a regulated Housing Association under a long-term indexed lease.

The freehold properties are located across various geographic regions including a presence in the London area and are immediately income generating, with a net initial yield in line with the Company's expectations. They were secured off-market by Civitas Housing Advisors Limited, the Company's Investment Manager.

The properties are subject to long-term leases of either 25 years or 35 years (save for one property with a lease of 22 years), adjusted annually in line with CPI or CPI+1 over the period and as more fully set out below:

 
       Lease Length   22yrs   25yrs   35yrs 
===================  ======  ======  ====== 
  No. of Properties     1      52       8 
-------------------  ------  ------  ------ 
 
         Indexation    CPI        CPI+1 
===================  ======  ============== 
  No. of Properties    12          49 
-------------------  ------  -------------- 
 
 

The counterparties to the leases are all regulated Housing Associations and comprise; First Priority Housing Association, Falcon Housing Association C.I.C, Westmoreland Supported Housing Limited and Inclusion Housing C.I.C each of whom have been a counterparty to leases within the Company's previous portfolios.

The acquisition enables Civitas to provide long-term accommodation to a broadening range of underlying client groups across various defined sub-groups which now comprise; Learning Disability, Autism, Drug & Alcohol Dependency, Homelessness and NHS Step-Down. This in turn strengthens the Company's presence within a growing number of local authorities and other government funded organisations and enables the establishment of broadening relationships.

These transactions were funded through a combination of the Company's remaining available equity capital represented by the Company's issued Ordinary Shares and associated debt finance and by the deployment of GBP27.6 million of capital from the Company's recently issued C Share.

In addition to this transaction, Civitas Housing Advisors continues to undertake due diligence on additional transactions within its extensive pipeline of investment opportunities and to consider new potential transactions that today have not formed part of this extensive pipeline. Further announcements are expected to be made shortly.

Civitas targets the objective of delivering sustainable returns to its shareholders by making socially relevant investments within the regulated social housing sector in England and Wales.

Michael Wrobel, Chairman of Civitas, commented: "We are pleased to be able to announce the acquisition of this substantial portfolio of social housing which has enabled us to deploy fully the equity raised at the time of IPO together with all the associated debt capital secured to date. In addition, we are very encouraged to have commenced the deployment of the recently raised 'C share' capital and look forward to making further progress in this regard shortly."

For further information, please contact:

Civitas Housing Advisors Limited

   Paul Bridge                           Tel: [phone] 
   Andrew Dawber                 Tel: [phone] 

Cenkos Securities PLC

   Sapna Shah                           Tel: [phone] 
   Tom Scrivens                        Tel: [phone] 

Pagefield

   Philip Dennis                        Tel: [phone] 
   David Leslie                          Tel: [phone] 

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 is listed on the premium listing segment of the Official List of the Financial Conduct Authority and was 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 company news service from the London Stock Exchange

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December 20, 2017 02:00 ET (07:00 GMT)