Triple Point Social Housing REIT Portfolio update: Westmoreland Supported Housing (0563J)
November 30 2018 - 5:13AM
UK Regulatory
TIDMSOHO
RNS Number : 0563J
Triple Point Social Housing REIT
30 November 2018
30 November 2018
Triple Point Social Housing REIT plc
(the "Company" or, together with its subsidiaries, the
"Group")
Portfolio update - Westmoreland Supported Housing
Association
The Board of Triple Point Social Housing REIT plc (ticker: SOHO)
notes the Regulatory Judgement published today by the Regulator of
Social Housing (the "Regulator") in relation to Westmoreland
Supported Housing Association ("Westmoreland").
Westmoreland, a registered provider focused on the supported
housing sector, has 1,379 social housing units under management and
has recently been subject to a review by the Regulator, resulting
in Westmoreland being given a 'non-compliant' rating of V3 for
viability and G3 for governance.
The Company's investment manager, Triple Point Investment
Management LLP (the "Manager"), has an established relationship
with Westmoreland and has been in regular dialogue with it,
particularly with regard to the regulatory review. The Company
notes that Westmoreland is working with advisers and the Regulator
to produce and implement a financial and governance improvement
action plan in order to address the Regulator's concerns.
Westmoreland has also voluntarily decided to appoint an independent
board member and amend the governance arrangements of its board in
order to address the Regulator's concerns around conflicts of
interest and is improving the quality of information provided to
senior management.
The Company has 17 assets leased to Westmoreland, the aggregate
value of which, as at 30 September 2018, was GBP22.2 million. Two
of these properties are forward funded assets with an aggregate
value of GBP5.9 million which are in the process of being
transferred to another registered provider. The Company had
instigated the transfer of these agreements to lease several weeks
ago reflecting Westmoreland's decision to focus on the
consolidation of its existing portfolio. Accordingly, following the
transfer of the two properties, Westmoreland will account for
GBP16.4 million of the Company's assets (under 5 per cent. of the
Company's net assets).
There has been no suggestion from Westmoreland that the rent
payable under the leases with the Company will not continue to be
forthcoming.
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 Westmoreland 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. However,
notwithstanding the quality of the Company's assets leased to
Westmoreland, the Board and Manager understand that Jones Lang
LaSalle Limited ("JLL"), the Company's independent valuer, will
have regard to the Regulator's rating of a registered provider -
and thus investors' likely perception of its covenant strength - as
one factor, amongst various considerations, in determining the
valuation of a leased supported housing asset. Following
conversations with JLL, the Manager and the Board estimate that the
potential impact of Westmoreland's rating on the Company's net
asset value would be less than 1 per cent.
Both the Board and the Manager see the Regulator's involvement
as a positive for the sector due to the increased accountability
and higher degree of transparency which it brings. The Regulatory
Judgements give registered providers the opportunity to address any
specific concerns the Regulator might have thereby ensuring that
their governance and viability are compliant and reflective of
their growing size and maturity.
The Board and the Manager note that Westmoreland is actively
engaging with the Regulator in order to put themselves into a
position to achieve grading improvements in the future.
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
Triple Point Investment Management (via Newgate below)
LLP
(Delegated Investment Manager)
James Cranmer
Ben Beaton
Max Shenkman
Justin Hubble
Canaccord Genuity Limited (Joint Tel: 020 7523 8000
Financial Adviser and Corporate
Broker)
Lucy Lewis
Denis Flanagan
Andrew Zychowski
Akur Limited (Joint Financial Adviser) Tel: 020 7493 3631
Tom Frost
Anthony Richardson
Siobhan Sergeant
Newgate (PR Adviser) Tel: 020 7680 6550
James Benjamin Em: triplepoint@newgatecomms.com
Anna Geffert
The Company's LEI is 213800BERVBS2HFTBC58.
Further information on the Company can be found on its website
at www.triplepointreit.com.
NOTES:
The Company invests in primarily newly developed social housing
assets in the UK, with a particular focus on supported housing. The
assets within the portfolio are subject to inflation-adjusted,
long-term (typically from 20 years to 30 years), Fully Repairing
and Insuring ("FRI") leases with Approved Providers (being Housing
Associations, Local Authorities or other regulated organisations in
receipt of direct payment from local government). The portfolio
comprises investments into properties which are already subject to
an FRI lease with an Approved Provider, as well as forward funding
of pre-let developments but does not include any direct development
or speculative development.
There is increasing political and financial pressure on Housing
Associations to increase their housing delivery and this is
creating opportunities for private sector investors to participate
in the market. The Group's ability to provide forward financing for
new developments not only enables the Company to secure fit for
purpose, modern assets for its portfolio but also addresses the
chronic undersupply of suitable supported housing properties in the
UK at sustainable rents as well as delivering returns to
investors.
Triple Point Investment Management LLP (part of the Triple Point
Group) is responsible for management of the Group's portfolio (with
such functions having been delegated to it by Langham Hall Fund
Management LLP, the Company's alternative investment fund
manager).
The Company was admitted to trading on the Specialist Fund
Segment of the Main Market of the London Stock Exchange on 8 August
2017 and was admitted to the premium segment of the Official List
of the Financial Conduct Authority and migrated to trading on the
premium segment of the Main Market on 27 March 2018. The Company
operates as a UK Real Estate Investment Trust ("REIT") and is a
constituent of the FTSE EPRA/NAREIT index.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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