Portfolio Update - Highstone Housing Association
3 November 2022
Triple Point Social Housing REIT plc
(the "Company" or, together with its subsidiaries, the "Group")
Portfolio Update - Highstone Housing Association
The Board of Triple Point Social Housing REIT plc (ticker: SOHO) notes the Regulatory Notice published today by the Regulator of Social Housing (the "Regulator") in relation to Highstone Housing Association ("Highstone"). This follows the Regulator's ongoing review of the specialised supported housing sector which the Board welcomes, bringing as it does, higher levels of accountability and transparency.
Highstone, a registered provider focused on the supported housing sector, has recently been subject to a review by the Regulator, resulting in Highstone being deemed non-compliant with regards to elements of the Governance and Financial Viability Standard. This reflects the Regulator's desire to see Highstone demonstrate improvement in the areas of governance, business planning and risk management. As Highstone had fewer than 1,000 social housing units under management based on the most recent statistical data return, no formal rating was given by the Regulator.
As at 30 June 2022, Highstone represents 4.2 per cent of the Group's current portfolio value and 3.7 per cent of the Group's rent roll. All rent payable under the leases with the Group continues to be paid in full.
The Group's investment manager, Triple Point Investment Management LLP (the "Manager") has an established relationship with Highstone and is in regular dialogue with the housing association, particularly with regard to the regulatory review. The Company notes that Highstone has committed to work with the Regulator to address the issues outlined in this Regulatory Notice and had already implemented certain changes, prior to regulatory engagement.
The Manager has liaised with the Group's independent valuer, Jones Lang LaSalle Limited, who has confirmed that there should be no material impact on the value of the Group's property portfolio as a result of the Regulatory Notice.
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
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Triple Point Investment Management LLP (Investment Manager) |
Tel: 020 7201 8989 |
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Max Shenkman |
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Isobel Gunn-Brown |
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Akur Capital (Joint Financial Adviser) |
Tel: 020 7493 3631 |
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Tom Frost |
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Anthony Richardson |
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Siobhan Sergeant |
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Stifel (Joint Financial Adviser and Corporate Broker) |
Tel: 020 7710 7600 |
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Mark Young |
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Mark Bloomfield |
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Rajpal Padam |
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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 majority of the assets within the portfolio are subject to inflation-linked, long-term, 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 a 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 pressure and social need to increase housing supply across the UK which is creating opportunities for private sector investors to help deliver this housing. The Group's ability to provide forward funding 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.
The Company is a UK Real Estate Investment Trust ("REIT") listed on the premium segment of the Official List of the UK Financial Conduct Authority and is a constituent of the FTSE EPRA/NAREIT index.
Additional information on regulation
The Specialised Supported Housing sector is regulated by the Regulator who carries out assessments on registered providers either through a scheduled In-depth assessment ("IDA") or reactive engagement. When a registered provider passes the 1,000-unit threshold, it automatically becomes subject to a detailed IDA by the Regulator. The IDA assesses compliance with the requirements of the Governance and Financial Viability Standard. The outcome of an IDA results in the Regulator publishing a formal grading (V 1-4 for Viability and G 1-4 for Governance, where V1-2 and G1-2 are considered "compliant" ratings, and V3-4 and G3-4 are considered "non-compliant" ratings), known as a regulatory judgement.
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