A new real estate investment trust (REIT) has become the latest to target the supported housing sector.
Specialist investment firm Triple Point announced on Thursday that it is launching a new REIT, which will buy mainly supported housing assets.
Its subsidiary Triple Point Social Housing REIT is aiming to raise up to £200m in its initial public offering, which went live yesterday.
The REIT has said that at least 80 per cent of its portfolio will consist of supported housing assets, providing accommodation for elderly people or younger adults, who are mentally or physically disabled or who have mental health problems. The balance of the portfolio will be other kinds of social housing properties.
The supported housing properties owned by the group will be let out to a housing association.
This week’s launch by Real Point follows floats of supported housing REITs earlier this year by Civitas and LXI.
Triple Point is targeting a net yield of 5 per cent from the supported housing assets.
The issue is conditional on a minimum share-raising of £100m.
The REIT will be buying and holding, either directly or through special purpose vehicles, freehold and long leaseholds of supported residential properties. Lease lengths will range from 20 years to 25 years.
The REIT is chaired by Chris Phillips, who is also chair of the Places for People group and is subscribing for 50,000 of the 900,000 shares being issued by Triple Point through his self-invested personal pension.
A spokesperson for Triple Point said that it would use Mr Phillips’ expertise in the sector to help identify off-market acquisition opportunities, which is how the REIT intends to build up its portfolio.
The REIT’s first acquisition is a £17.9m seed portfolio of five supported housing assets, which it is buying from Triple Point subsidiary Pantechnicon Capital Limited. The portfolio has been valued at £18.46m by Jones Lang Lasalle.
The properties are located predominantly in and around town and city centres in the midlands and the north of England and are leased to Inclusion Housing CIC on a 20-year lease.
Triple Point said it had identified a pipeline of over £200m of predominantly off-market investment opportunities, which it is discussing with vendors. It is targeting operating and forward funded schemes but will not be developing itself.
Commenting on the launch, Mr Phillips said: ‘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. Our ability to provide forward financing for new developments is critical to securing deal flow for the company whilst addressing the key structural issues in the UK – chronic undersupply of suitable supported housing properties.’
Triple Point Group is a specialist investment firm founded in 2004, which currently has £470m worth of assets under management across a mix of property portfolios. Its investments have totaled over £1bn, including in public sector and housing association properties.
Triple Point ‘s joint financial advisers are Akur Limited and Canaccord Genuity Limited with the latter acting as sole global coordinator and bookrunner in relation to the issue.
The deadline to subscribe for shares in the initial public offering (IPO) is August 3rd.