Results For the 12 Months Ended 31 December 2025
Summary by AI BETAClose X
26 March 2026
Social Housing REIT plc
(the "Company", "SOHO" or, together with its subsidiaries, the "Group")
FULL YEAR RESULTS FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2025
The Board of Social Housing REIT plc, a UK Real Estate Investment Trust investing in Specialised Supported Housing ("SSH"), is pleased to announce its Audited results for the twelve months ended 31 December 2025. The first year under the management of Atrato Partners Limited ("Atrato") delivered improved earnings and strengthened operational oversight.
Chris Phillips, Chair of Social Housing REIT plc, commented:
"As I conclude my tenure as Chair, I would like to thank shareholders, advisers and my fellow Directors for their support. I am confident that Jos Short, as Chair-elect, supported by Fionnuala Hogan as Audit Chair, will guide the Company admirably through its next phase.
With a strengthened platform, an inflation-aligned income profile, and a clear ambition to build scale responsibly within the listed market, I believe that SOHO is well-positioned to deliver secure and growing dividends for shareholders for the long term."
Highlights for the twelve months ended 31 December 2025
· Adjusted earnings per share rose 20.9%
Driven by an increase in rental income collected, fixed cost of debt and a reduction in operational costs.
· Significant improvement in adjusted dividend cover to 1.17x (2024: 0.99x).
Reflecting an adjusted EPS of 6.53p per share (2024: 5.40p) compared to total dividends per share paid in FY25 of 5.58 per share.
· Net rental income increased by 11.7% to £40.03 million compared to 2024 (£35.85 million)
Driven by inflation-linked rental uplifts and improved rent collection outcomes of 91.5 per cent in 2025 (87.6% as at FY2024).
· Dividend target raised by 3%
Dividends of 5.622 pence per share were declared, in line with the announced annual target. The increase was possible due to successful lease assignment progress, reduced costs, index-linked rental growth and our highly attractive, long-term, low cost of debt.
· Substantial cost savings delivered with further savings targeted
EPRA cost ratio reduced to 18.7% (2024: 29.9 per cent), reflecting the transition to a market capitalisation-based management fee and a detailed cost reduction programme.
· Highly attractive debt profile with an average fixed cost of 2.74%
The Company has £263.5 million of fixed-rate debt at a weighted average cost of 2.74%, weighted average maturity of 7.6 years, and no near-term refinancing requirement, with the earliest maturity in mid-2028.
· Fitch 'A-' investment grade rating reaffirmed
Reflecting improving operating performance, strong debt metrics, and the long-dated secure income.
· Asset valuation at a Net Initial Yield of 6.42%
The portfolio was valued at £606.3 million at 31 December 2025 (2024 £626.4 million) reflecting a Net Initial Yield of 6.42% (2024: 6.22%).
Financial and Operational Summary
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Year ended 31 December 2025 |
Year ended 31 December 2024 |
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Adjusted Earnings per Share1 |
6.53p |
5.40p |
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Dividends per Share (declared) |
5.62p |
5.46p |
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Adjusted Dividend Cover2 |
1.17x |
0.99x |
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EPRA Cost Ratio |
18.7% |
29.9% |
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Rent Collection |
91.5% |
87.6% |
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As at |
As at |
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IFRS & EPRA Net Tangible Assets per share |
94.23p |
99.05p |
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Net Loan to Value3 |
39.5% |
37.7% |
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Number of properties |
492 |
494 |
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Number of homes |
3,412 |
3,424 |
Operational Highlights
· Continued rent collection progress, supported by robust occupancy
Rent collection for the year was 91.5 per cent of contracted rental income, reflecting improved performance and active management of legacy counterparty positions. Resident occupancy remained robust, rising slightly to 87 per cent4.
· Proactive counterparty engagement and portfolio optimisation
More than half of the properties assigned from Parasol to Portus (formerly Westmoreland) have returned to fully repairing and insuring ("FRI") terms with rents ahead of target. The remaining assigned properties will revert to FRI terms once stabilisation is reached during 2026. For the properties leased to My Space, assignments of the performing properties are due to complete imminently and will move from pass-through to long-term FRI leases following stabilisation. The remaining assets deemed unsuitable are being sold, or assigned pending sale once residents are carefully re-housed.
· 100% of leases inflation-linked5
Inflation linkage remains central to the investment proposition. All contracted rent is indexed to CPI or RPI and reviewed annually, with 86 per cent of uplifts uncapped. For properties that had a rent review during 2025, the average rental uplift amount was 2.2%. The majority of inflation uplifts are indexed to September CPI which was 3.8% in September 2025, supporting strong rental growth for the coming year.
Outlook
The Investment Manager, Atrato, has improved earnings, strengthened counterparty oversight and Social Housing REIT is now well-positioned for growth. Atrato's focus remains on earnings growth, portfolio optimisation, cost discipline, and accretive growth opportunities. The Board believes the Company is well positioned to continue providing high-quality SSH accommodation, delivering long-term, predominantly inflation-linked income for shareholders alongside measurable social impact.
Notes
1 EPRA adjusted earnings basis removes the impact of non-cash items and the termination payments to the previous investment manager from IFRS profit.
2 Calculated as EPRA adjusted earnings divided by dividends paid during the period.
3 Net LTV is calculated as balance sheet borrowings less cash and cash equivalents divided by investment property.
4 Excluding assets being sold
5 14% of leases are capped at 4%, with one additional lease capped at 5%.
Results Presentation - Today
A presentation for analysts will be hosted by SOHO's Investment Manager today at 08.30am. Those wishing to attend should contact Lauder Teacher on the details below.
The Company's Full Year Results and accompanying presentation will be available via the SOHO website at www.socialhousingreit.com.
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
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Social Housing REIT plc |
Via Lauder Teacher Associates |
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Chris Phillips |
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Atrato Partners Limited |
ir@atratopartners.com |
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Adrian D'Enrico |
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Michael Carey |
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Eddie Gilbourne |
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Deutsche Numis (Corporate Broker & Financial Adviser) |
Tel: +44 (0) 207 545 8000 |
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Hugh Jonathan Amit Wangoo |
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Lauder Teacher (Financial PR Adviser) |
sohoreit@lauderteacher.com |
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Colm Lauder Andrew Teacher Shirin Iqbal |
Tel: +44 (0) 7787 444 960 |
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The Company's LEI is 213800BERVBS2HFTBC58.
Further information on the Company can be found on its website at www.socialhousingreit.com.
IMPORTANT INFORMATION
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014, as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented ("UK MAR") and is disclosed in accordance with the Company's obligations under UK MAR. Upon the publication of this announcement, this inside information will be considered to be in the public domain.
NOTES
The Company primarily invests in residential properties providing social housing in the UK, with a particular focus on specialised supported housing ("SSH"). SSH provides homes for vulnerable adults requiring support to live independently, including those with learning difficulties, mental health problems and physical disabilities. These homes are specially designed or adapted to meet residents' needs and are managed by Approved Providers who are predominantly regulated by the Regulator of Social Housing. Approved Providers consist of Housing Associations and Local Authorities, or other regulated organisations in receipt of direct rental payments from local Government.
These operational residential properties deliver sustainable, long-term, growing income for shareholders, improved outcomes for residents and savings to the taxpayer.
The Company is listed on the Closed-ended investment funds category of the FCA's Official List and its Ordinary Shares are traded on the LSE's Main Market.
Atrato Partners Limited is the Company's Investment Manager.
Chair's Statement
It is a privilege to present my final Chair's statement for the Social Housing REIT plc. As I conclude my nine years as Chair, I am pleased to report that I leave SOHO in a strong financial position and well positioned for future growth having completed the appointment of Atrato as Investment Manager in January 2025 and changed the Company's financial advisers.
Our Specialised Supported Housing ("SSH") portfolio is a key facilitator of independence for those vulnerable adults who call our properties home. Across our extensive portfolio, registered providers of social housing ("Approved Providers") manage our properties and collect rent paid for residents by housing benefit, funded by central Government. This model continues to underpin the Company's focus on secure, inflation-aligned income streams, offering independent living.
In a listed real estate market where scale and liquidity are increasingly important to institutional investors, the Board remains clear that relevance and investability require both income security and credible growth ambitions.
The value of asset-backed residential strategies offering attractive long-term income is increasingly recognised. The Company continues to engage actively with shareholders to reinforce understanding of the SSH sector's underlying fundamentals. These fundamentals are shared by other adjacent living sector strategies, with demographic drivers and funding reforms reshaping occupational demand and financial outcomes. The Company is well positioned to be a beneficiary of this dynamic.
The Board has been encouraged to see the improvement in the Company's share price and the corresponding improvement in the discount to Net Asset Value ("NAV").
Macroeconomic Backdrop
Several macroeconomic indicators improved during the year, although geopolitical uncertainty continued to weigh upon markets and economic growth. Earlier concerns that interest rates would remain elevated placed pressure on property valuations. Whilst inflation declined meaningfully during 2025, allowing for a 100 basis point reduction in the UK base rate to 3.75% during the year, more recent geopolitical events could see a short to medium-term inflation pick up. We remain optimistic that, over the longer term, lower inflation will support a more stable interest rate environment, which should be supportive of income-producing real estate, particularly strategies with inflation-linked cashflows such as SSH.
The Company continues to benefit from attractive long-term debt. All borrowings are fixed rate, with a weighted unexpired average term of 7.6 years and a weighted average fixed rate of 2.74%. This conservative financing structure supports income resilience and underpins the Company's ambition to pursue disciplined growth.
Sector Tailwinds
Positive policy reforms introduced by the Labour Government in 2025, including the £39 billion Affordable Homes Programme and the introduction of a ten-year CPI plus 1% rent settlement, provide long-term favourable tailwinds for the sector. Despite this, the UK continues to face a structural supply shortage in supported housing. Demand for SSH remains strong, driven by demographic trends and policy preference for community-based living.
The persistent supply/demand imbalance, combined with the appeal of inflation-linked rental uplifts, has underpinned our portfolio performance over the past 12 months and provides a strong platform for sustainable income growth over time.
Operational Performance
Across the portfolio, excluding the Portus and My Space matters noted below, rent collection remained strong with 100% collected during the year. In total, the Company has 389 leases with a total annualised contracted rental income of £43.7 million as at 31 December 2025, an increase of £1.1 million over the year, resulting from contractual inflation-linked rental uplifts, with all leases subject to annual index-linked reviews.
The homes within the portfolio continue to be well maintained - over 440 asset inspections having been completed to ensure they remain safe and compliant. They are also well utilised, with occupancy rising to 87% following the sale of non-core assets identified by the Investment Manager. For context, it is worth noting that sustainable occupancy in the SSH sector is generally accepted to be around 80%. Our current levels comfortably exceed this threshold. The Investment Manager continues to undertake property-by-property reviews of occupancy with its lessees to ensure long-term sustainability and income visibility.
The Investment Manager inherited a portfolio with two Approved Provider challenges which were disrupting rent collection. Since its appointment in early 2025, they have driven rapid progress toward resolving both issues, with solutions now well advanced.
The Investment Manager has substantially completed the stabilisation of properties transferred from Parasol to Portus and advanced the lease assignments from My Space to Inclusion and from Pivotal to IHL. These actions are on track to strengthen rent collection and asset value, undertaken throughout with careful prioritisation of vulnerable residents' needs.
In parallel, Atrato is working to mitigate longer term counterparty risk; a pilot is now being established to improve rent recovery resilience, with plans for a wider rollout upon successful completion.
Portfolio Optimisation
The Investment Manager has completed the assessment of each property against five key characteristics of a successful SSH scheme: suitable properties, appropriate adaptations, identified demand, sustainable rents, and reputable partners. Through its initial portfolio-wide property review, a small number of assets were identified as unsuitable or below required standards. These assets are being disposed of, with sales already progressing at or around book value. The remaining portfolio is well positioned to provide long-term homes for residents and durable income for shareholders.
I am pleased to report that our most recent forward-funded scheme in Chorley reached practical completion during the year and is nearing full occupation. Looking ahead, the Board expects the Company to move from stabilisation towards a measured phase of earnings-led growth, focused on scale, liquidity and sustainable dividend progression.
Alongside social impact benefits, Atrato continues to enhance the environmental credentials of the portfolio. The portfolio-wide EPC Upgrade Programme has commenced, and compliance with anticipated legislative standards improved from 71% to 77% during the year. We expect to achieve full compliance by 2028, ahead of the anticipated 2030 deadline.
The newly introduced Sustainability Report, which accompanies this Annual Report and this year's Social Impact Report, exemplifies the Investment Manager's evolving focus on the wider societal and environmental impacts of our investment decisions and the role the Company plays in delivering efficient homes that work for residents and the environment.
2026 Outlook
The Board is confident that improved rent collection, inflation-linked income growth and disciplined capital allocation will support further narrowing of the NAV discount. Growth will be pursued only where it reinforces income quality and strengthens long-term dividend cover.
The dividend target was increased in 2025 to 5.622 pence per share and remains well covered at 1.17 times. Completion of the Portus and the My Space assignments is expected to support further dividend growth in 2026.
As I conclude my tenure as Chair, I thank shareholders, advisers and my fellow Directors for their continued support. I am confident that Jos Short, as Chair-elect, supported by Fionnuala Hogan as Audit Chair, who replaces Peter Coward who has also completed nine years of tenure, will guide the Company admirably through its next phase.
With a strengthened platform, an inflation-aligned income profile, and a clear ambition to build scale responsibly within the listed market, I believe that SOHO is positioned to deliver secure and growing dividends for shareholders over the long term.
Chris Phillips
Chair
25 March 2026
KEY PERFORMANCE INDICATORS
We set out below our key performance indicators for the Company.
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KPI and Definition |
Performance (as at 31 December 2025) |
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1. IFRS & EPRA NTA Per Share |
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The value of our assets (based on an independent valuation) less the book value of our liabilities, attributable to Shareholders and calculated in accordance with EPRA guidelines. Further information is set out in Note 3 of the Unaudited Performance Measures. |
94.23 pence per share |
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2. Total Accounting Return |
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Total accounting return is measured by reference to the growth in the Group's share price over a period, plus dividends declared for that period. |
0.8% for the year The total accounting return since IPO is 39.1% |
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3. Adjusted EPS |
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EPRA earnings adjusted for company specific items to reflect the underlying profitability of the business, calculated on the weighted average number of shares in issue during the year. |
6.53 pence per share for the year |
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4. Adjusted Dividend Cover |
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Dividends paid or declared in respect of the year ended 31 December 2025 totalled 5.622 pence, with dividend cover |
The dividend was 1.17x covered for the year |
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5. Net Loan to Value ("LTV") |
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Net LTV is calculated as net borrowings (being total borrowings less cash and cash equivalents) divided by the gross carrying value of investment properties and other relevant property assets. |
39.5% |
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6. Rent Collection |
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Rent collection is one of the Group's principal measures of performance, measured against total contracted rent due. Material rent arrears during the year mainly attributable to two Approved Providers, My Space Housing Solutions and Portus Supported Housing Limited. |
91.5% for the year |
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7. Ongoing Charges Ratio |
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A measure of all operating costs incurred, calculated as a |
1.51% |
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8. EPRA Cost Ratio |
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Administrative & operating costs (including costs of direct |
18.68% |
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9. Exposure to Largest Approved Provider |
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The percentage of the Group's gross assets that are leased |
33.4% |
Adjusted earnings is a performance measure used by the Board to assess the Group's financial performance and dividend payments. The metric adjusts EPRA earnings for non-cash items such as the amortisation of finance costs and the movement in lease incentive debtor. Adjusted earnings is considered a better reflection of the measure over which the Board assesses the Group's trading performance and dividend cover.
Adjusted EPS reflects the adjusted earnings defined above attributable to each share.
The Group uses alternative performance measures including the European Public Real Estate ("EPRA") Best Practice Recommendations ("BPR") to supplement its IFRS measures as the Board considers that these measures give users of the financial statements the best understanding of the underlying performance of the Group's property portfolio. The EPRA measures are widely recognised and used by public real estate companies and investors and seek to improve transparency, comparability and relevance of published results in the sector.
The EPRA cost ratio does not exclude the impact of non-operational or exceptional items.
Reconciliations between EPRA measures and the IFRS financial statements can be found in the unaudited performance measures section.
EPRA PERFORMANCE MEASURES
The table below shows additional performance measures, calculated in accordance with the Best Practices Recommendations of the European Public Real Estate Association ("EPRA"). We provide these measures to aid comparison with other European real estate businesses.
For a full reconciliation of all EPRA performance indicators, please see the Notes to EPRA measures within the supplementary section of the financial statements.
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Measure and Definition |
Performance (as at 31 December 2025) |
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1. EPRA EPS |
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A measure of EPS designed by EPRA to present underlying earnings from core operating activities. |
6.37 pence per share for the year |
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2. EPRA Net Reinstatement Value ("NRV") Per Share |
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An EPRA NAV per share metric which assumes that entities never sell assets and aims to represent the value required to re-build the entity. |
103.56 pence per share |
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3. EPRA Net Tangible Assets ("NTA") Per Share |
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An EPRA NAV per share metric which assumes entities buy and sell assets, thereby crystallising certain levels of unavoidable deferred tax. |
94.23 pence per share |
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4. EPRA Net Disposal Value ("NDV") Per Share |
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An EPRA NAV per share metric which represents the Shareholders' value under a disposal scenario, where deferred tax, financial instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax. |
106.62 pence per share |
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5. EPRA Net Initial Yield ("NIY") |
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Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers' costs. |
6.82% |
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6. EPRA "Topped-Up" Net Initial Yield |
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This measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents). |
6.82% |
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7. EPRA Vacancy Rate |
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Estimated Market Rental Value ("ERV") of vacant space divided by ERV of the whole portfolio. |
1.54% |
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8. EPRA Cost Ratio |
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Administrative & operating costs (including costs of direct vacancy) divided by gross rental income. |
18.68% |
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9. EPRA LTV |
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Net debt divided by total property portfolio and other |
39.08% |
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10. EPRA Like-For-Like Rental Growth |
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Changes in net rental income for those properties held for the duration of both the current and comparative reporting period. |
Rental increase of 2.21% for the year |
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11. EPRA Capital Expenditure |
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Amounts spent on the purchase and development of investment properties (including any capitalised transaction costs). |
£2.2 million for the year |
FUND MANAGER'S REPORT
Introduction
This report marks our first anniversary as Investment Manager for Social Housing REIT plc ("SOHO"). Over the past year, we have made considerable progress in remediating not only the existing portfolio, but also confidence in the asset class.
Specialised Supported Housing ("SSH") remains a vital component of the UK residential market, providing specifically adapted homes for vulnerable adult residents and enabling independent living with support. This long-term housing solution delivers improved wellbeing outcomes for residents and material savings to the public purse, representing an invaluable win-win in an era of constrained public finances.
Demonstrating Sector Value and Restoring Investor Confidence
Despite our confidence in both the sector and SOHO's portfolio, the well-publicised failures of other, different social housing models have affected shareholder and public sector confidence in SSH.
It is therefore essential that we demonstrate SOHO's continued ability to deliver secure, inflation-aligned income for shareholders, whilst also playing an active role in restoring confidence in the sector as a viable private sector asset class.
We are pleased to see momentum returning, reflected in the SOHO share price and the narrowing of the discount to NAV during the year. Improved investor sentiment has been supported by continued progress in portfolio optimisation. This includes enhanced asset standards, clearer counterparty expectations, the replacement of underperforming lessees, and the disposal of noncore assets. SOHO's increasingly refined portfolio demonstrates the benefits of proactively managed SSH assets and we remain focused on evidencing those outcomes.
Portfolio Optimisation
At its core, SSH is simply operational residential real estate. This requires the right property in the right location, with the correct adaptations. Given those factors, occupancy will be high and rents sustainable. Leveraging our experienced operational team and sector expertise, we are working to strengthen lessee relationships, enhance property quality, and improve both resident and financial outcomes.
Our primary focus since appointment has centred on two workstreams. First, completing the assignments from Parasol Homes ("Parasol") to Portus and implementing solutions in respect of My Space Housing Solutions ("My Space"). Second, acting decisively on the outcomes of our comprehensive portfolio review. Both workstreams have progressed materially and once completed, will result in improved occupancy, enhanced rent collection, and strengthened income visibility.
Lease Assignments
Parasol to Portus
In the second half of 2024, the Parasol leases were assigned to Portus. Post-assignment, all 38 properties moved to an initial stabilisation period, where the Company receives rent on an agreed pass-through basis. Portus has now assessed maintenance costs and sustainable rental levels. We are pleased to confirm that 20 properties have reverted back to long-term fully repairing and insuring ("FRI") leases at the top end of the previously indicated target range (75-85%) of the previously contracted rents. The remaining properties assigned to Portus are expected to revert to FRI terms during 2026.
My Space
The principal portfolio challenge relates to the My Space portfolio of 34 properties. My Space ceased paying rent in June 2024 due to financial difficulties. In March 2025, My Space entered into a Company Voluntary Arrangement ("CVA"). Prior to the CVA vote, we secured an option agreement on behalf of the Company permitting assignment of SOHO's properties within 12 months of the challenge period.
Whilst rent collection has recommenced under a pass-through arrangement, we concluded that assignment of these properties to stronger approved providers was in shareholders' best interests.
A two-part solution is being implemented:
· Notice has been served to assign eight well-occupied properties to Inclusion. This is due to complete imminently and will move from pass-through to long-term FRI leases following stabilisation. Since the option was agreed, 86% of the contracted rent was collected in these properties.
· Of the remaining My Space properties, those which are vacant will be sold once deeds of surrender are agreed. Those which have been assessed as unsuitable or economically unviable, will temporarily be assigned to Granville Community Homes to facilitate the transfer of residents to more appropriate accommodation, after which vacant possession will be secured and the properties will be sold.
Throughout this process, all vulnerable residents will be fully supported to ensure their housing needs remain met and that any transfers are handled sensitively with the residents and their representatives.
This structured approach is consistent with our earnings-led strategy and focus on strengthening income quality.
Asset Disposals
Following our appointment in early 2025, we conducted a full portfolio review to identify property and operational issues. This comprehensive review identified selected properties which we deemed unsuitable or economically unviable. These properties were largely contained within the portfolio leased to My Space (referred to above). However, they also included four properties leased to Portus (three within the portfolio leased to Portus and one to BeST), and individual properties leased to Blue Square and Falcon.
In respect of vacant properties, two were immediately sold to a Local Authority. For the remainder, lease surrenders are, or will be, agreed and sales achieved via auction. Three sales have already completed, with a further ten sales agreed via auction, post-year end.
For the other partially occupied properties, we have been working with the respective Approved Providers to achieve vacant possession. Any residents will be moved to alternative suitable properties in conjunction with the relevant stakeholders, before the leases are surrendered. They will then be similarly sold via auction over the coming months.
Auction sales achieved to date have been at or around book value.
Disposal proceeds will be redeployed into accretive opportunities consistent with our focus on strengthening income and improving portfolio quality whilst maintaining a disciplined capital allocation approach.
Asset Management
Assignments and disposals have been a key focus of our portfolio optimisation, however we remain focused on ensuring our properties are well managed and maintained, benefiting our residents both now and into the future.
During 2025, 442 inspections were completed across our portfolio of 492 assets. These inspections collect valuable information about the condition and operation of our homes. They also complement the health and safety and other mandatory regulatory information we receive from our Approved Provider lessees. They guide our engagement with the lessees and ensure that both standards and contractual obligations are met.
We have commenced the roll out of the EPC Upgrade Programme, which will ensure that all properties have an Energy Performance Certificate ("EPC") rating of C or above in advance of the expected legislative deadline of 2030. Whilst the portfolio was already materially more efficient (average EPC 'C') than the wider housing market (average EPC 'D'), the Company is committed to being a sector leader when it comes to reducing emissions.
By 2028, the Programme will deliver both compliant EPC ratings and reductions in occupational energy consumption. Already, at the end of 2025, 77% of the Company's properties now benefit from an EPC of C or better, improving 6% over the year and overall energy consumed across the portfolio is declining - benefiting the environment and reducing the costs incurred by residents.
Our Sustainability Report, which accompanies this Annual Report, contains further detail on our progress, certifications and ambitions as we work to future-proof our homes, make them more comfortable for residents, and achieve our Net Zero targets.
Proactive Asset Management
The immediacy of our actions in assigning underperforming counterparties and exiting unsuitable properties reflects our proactive approach. Whilst doing so, we will continue to operate with transparency, ensuring shareholders are informed of our actions and intentions.
We also continue to evolve our asset management processes iteratively, leveraging operational data and sector expertise to mitigate risk proactively. By doing so, we seek to avoid tenant issues such as those experienced with Parasol and My Space. Where they do arise, we will deliver solutions in a more expeditious manner than has been achieved historically, seeking to avoid future material credit losses.
With the right properties, assignments to new approved provider lessees can be facilitated, leaving residents, income and value unaffected. Our assignment from Pivotal to Independent Housing (IHL) of two properties in Cornwall (undertaken in 2025 and completing early in 2026) typifies this principle and our proactive approach.
When Pivotal received an Enforcement Notice from the Regulator of Social Housing during the year, we moved quickly to identify an alternative lessee, engaged with the Local Authority and care providers, effecting the assignment with no impact to residents. Rental income continued to be paid by Housing Benefit in respect of the two properties and care provision to the residents was unaffected.
Central to this process was strong engagement with counterparties, leveraging our networks (including facilitating the introduction of a new care provider to one of the schemes) to implement a solution. The process completed in early 2026. We look forward to working with IHL going forwards on the two schemes, which are well-occupied and well-supported by the Local Authority.
Enhanced Lessee Monitoring
We maintain rigorous oversight of our Approved Providers through financial monitoring, KPI tracking, regular meetings, and property inspections. By working proactively with our lessees, we seek to minimise the occurrence of operational risks. Where challenges arise, we work collaboratively to remedy any issues swiftly. If required, we will not hesitate to assign leases to more appropriate approved providers or find alternative solutions for properties.
It is important to reiterate that whilst the SSH sector has often historically been described as one which offers government-backed income, the reality of the sector and its lease counterparts is more nuanced.
Robust contractual arrangements in the form of long-term fully repairing and insuring ("FRI") leases are in place. However, although the Company's lessees are highly specialist organisations which deliver social good to society's most vulnerable people, they are not institutional grade covenants.
As noted earlier, it is key to understand that SSH comprises operational residential properties and relies on two key elements:
· The property fundamentals of location, structural quality and functionality with an appropriate rent basis; and
· The operational efficacy of the lessees.
The Group's lessees are instrumental in delivering day-to-day operational performance. The properties are typically specialised or adapted to house people often with a variety of complex needs. The lessees' staff are trained individuals who are passionate about improving people's lives. The properties require both intensive housing management and to be kept to a high standard, requiring specific levels of adaption to ensure that residents' homes are comfortable and safe.
These requirements are far beyond what one would expect to see in the Private Rental Sector which makes the lessees' expertise vital.
Valuation
Market pricing certainty continues to be hampered by limited transactional activity across the SSH sector. After a 20bps softening of the portfolio Net Initial Yield ("NIY") in the first half of 2025, which saw the portfolio yield move from 6.22% to 6.42% at 30 June 2025, there were no further movements during the second half of the year. At 31 December 2025, the portfolio NIY therefore remained at 6.42%, reflecting an EPRA NIY of 6.82%.
Reflecting this outward shift in investment yields over the year, the portfolio value as at 31 December 2025 was £606.3 million compared to £626.4 million at 31 December 2024, representing a decline of 3.2% over the period, driven in large part by a reduction in the valuation attributed to properties being considered for sale.
All of SOHO's leases are reviewed annually, with the majority of inflation-linked uplifts occurring in April, based on the prior September reference rate in line with the wider social housing sector. For April 2026, this reference rate will be 3.8%.
Income Security Enhancement
We continue to explore structuring options to strengthen the security of rental income from our occupied homes. While legislative change would be required for us to receive rental income directly, we are, together with one of our Approved Providers, segregating rental cashflows for a number of properties into a dedicated account from which SOHO is the sole payee. This approach, supported by legal advice, has been discussed with the Regulator of Social Housing, and the Approved Provider will be seeking the regulator's views once implemented.
Subject to the Regulator's acceptance and confirmation that the change has no adverse impact on the Approved Provider's financial viability, we plan to replicate this structure across the wider portfolio.
Over the medium term, we will continue to advocate for reform of the sector's financial model to provide clearer visibility and greater control over rental income. We believe that achieving a more direct link to government sourced cashflows could materially lower the risk profile of SSH, reduce the cost of capital, and attract new investment to support the delivery of more homes at lower rents.
We will continue to keep shareholders updated as this work progresses.
Outlook
As we look ahead to 2026, we remain confident in SOHO's trajectory. Our near-term priorities are:
· Portfolio optimisation: sales, assignments and asset enhancements. We are nearing completion of the Parasol to Portus stabilisation and have commenced a solution for the My Space portfolio, including assignments to stronger counterparties and sales of non-core assets. These initiatives will lead to improved occupancy, rental levels, rent collection and will be supportive to asset value of assets held. Concurrently, we will continue to enhance the energy efficiency of our homes, ensuring they are suitable for our residents now and into the future.
· Restoring confidence with continued transparency. We remain strong and vocal advocates for the sector and the benefits it can deliver for residents, shareholders and the public purse and will continue working to restore investor confidence in the SSH model. Restoring confidence in the ability of SSH to deliver long-term inflation-aligned income whilst delivering positive social impact, should support a further narrowing of the share price discount to NAV.
· Strategic growth: diversification and accretive investment. Our work to optimise our extensive, established SSH portfolio will provide a strong foundation for responsible growth, increasing scale and diversification for shareholders and delivering secure and growing dividends over the long term.
We look forward to building on the positive momentum achieved during the year as SOHO progresses into its next phase.
Adrian D'Enrico
Fund Manager, Atrato Living
25 March 2026
STRATEGY and growth
Following a period of operational stabilisation and financial repair, the Company can now enter the next phase of its development from a position of strength. Investors in the UK REIT sector value scale and liquidity and, as a result, companies fulfilling those criteria are seen as more attractive investment propositions. Increasing scale and liquidity, together with strict capital discipline, are at the forefront of SOHO's future strategic plans. Over the medium term, we are working with the Board to consider options to retain the Company's core strategy of delivering sustainable income and capital growth, whilst evaluating the ability to capitalise on accretive opportunities to scale the Company.
The UK housing and care landscape continues to evolve and it is key to the long-term success of the Company that its strategy evolves to reflect this. Demographic change and funding reform are reshaping demand across the living sector and the Company is well positioned to be a beneficiary of this dynamic. SSH will always remain a cornerstone of the Company. However, we believe there is an accretive and logical growth opportunity within the wider UK living sector in appropriate, affordable and fit-for-purpose accommodation and the Company's future strategy could evolve to capitalise on this broader opportunity, whilst retaining a firm anchor in secure, inflation-aligned income.
Any material changes to the Company's strategy would be subject to the necessary regulatory and shareholder approvals.
Earnings Growth-Led Diversification
SOHO's investment approach will always be centred around earnings growth, focused on the sustainability and security of underlying cashflows. Its core objective remains clear: to deliver secure, inflation-aligned sustainable income which supports a progressive dividend policy. Through sustained, proven performance, we believe that, as Investment Manager, we can achieve a re-rating of SSH, reduce the Company's cost of capital and deliver attractive returns to shareholders. But SOHO could further reduce its cost of capital by achieving greater scale, increasing relevance, enhancing liquidity and significantly broadening its potential investor base.
Broadening the scope of its investment policy could afford SOHO the flexibility to pursue accretive growth opportunities across the broader living sector. This would enable it to invest into adjacent UK living sectors, which share common characteristics with the existing portfolio - being structurally-supported by population demographics, housing demand pressures and affordability needs. Investments in adjacent sectors would, of course, have to offer income characteristics that are accretive and meet the Company's sustainable income and inflation-aligned requirements. Each new target sector would similarly need to offer stable income streams, be resilient across economic cycles and comprise assets that fit within Atrato's operational expertise, to ensure they are acquired well and managed efficiently. A revised investment policy, if adopted, would allow the Company to deliver growth while maintaining its attractive income profile.
Responsibility and Long-Term Relevance
An expanded, strategic approach for the Company could combine sectors that address essential housing needs and reflect long-term demographic trends, favouring community-based independent living. While social outcomes would not be expected to be codified within the investment policy, they would be able to be clearly evidenced. Measurable indicators, for example average resident tenure, would be essential to provide insight into occupational stability and resident satisfaction, reinforcing the Company's role as a responsible long-term investor.
Looking ahead, we believe the Company is well positioned for the next phase of its corporate strategy. With strengthened financials offering a strong foundation, by adopting a new, broader investment policy the Company would be able to stay committed to remaining as a listed company whilst becoming more investable to a broader universe of REIT investors.
As we look ahead, we will work with the Board to consider a future strategy that continues to deliver growth via secure, inflation-aligned income across compatible living sectors. We, along with the Board, are committed to maintaining a progressive dividend policy and to building a robust and resilient platform for shareholders.
Michael Carey
Managing Director, Atrato Living
Chief Financial Officer's Report
I am pleased to present the financial results for the year ended 31 December 2025.
Financial Results
|
|
31 December £'000s |
31 December £'000s |
|
Net rental income |
40.0 |
35.8 |
|
Administrative expenses1 |
(7.2) |
(7.4) |
|
Net finance expenses2 |
(7.1) |
(7.2) |
|
Adjusted earnings |
25.7 |
21.2 |
Net Rental Income
In the year, the portfolio generated net rental income of £40.0 million (31 December 2024: £35.8 million), representing an increase of £4.2 million or 11.7% compared to the prior year. This increase was driven by the impact of increases from our inflation-linked leases, combined with improved collection in respect of the My Space and Portus3 properties.
All of the Group's contracted income is generated from leases which benefit from annual uplifts linked to inflation. The majority of these uplifts are based on CPI inflation (88% of rental income), with the remainder being linked to CPI +1% (4%), RPI (4%) or RPI +1 (4%). In 2025, the Company's weighted average annual rental uplift was 2.2% (2024: 4.3%). The majority of the portfolio (61% weighted by income) have annual rent reviews which occur in April. The April 2026 rent reviews are predicated on the prevailing inflation rate six months prior: the September 2025 reference CPI figure used as the basis to determine the uplift will be 3.8%, and RPI will be 4.5%.
In total, the Company has 389 leases (31 December 2024: 391) with a total annualised contracted rental income of £43.7 million as at 31 December 2025 (31 December 2024: £42.6 million). Over the past 12 months, the Company has collected 91.5% of this contracted rental income. As set out below, the shortfall relates to the difference in rent collected in respect of My Space and Portus where leases have been varied to a pass-through basis (whereby the Company is only paid the net rent collected by the Approved Provider) and the write-off of expected credit losses in relation to My Space and Pivotal.
|
|
At 31 December £m |
At 31 December £m |
|
Annualised contracted rental income |
43.7 |
42.6 |
|
Shortfall due to pass-through mechanism4 |
(3.0) |
(2.5) |
|
Expected Credit Losses |
(0.7) |
(3.3) |
|
Movement in Lease Incentive Debtor |
0.0 |
(1.0) |
|
Net rental income |
40.0 |
35.8 |
Administrative and other expenses and EPRA cost ratio
Administrative and other expenses, which comprise all operational costs of running the business, including irrecoverable property costs, decreased by £4.1 million to £7.6 million (2024: £11.7 million). This reduction was driven primarily by the change in the Investment Management fee basis from NAV to market capitalisation, aligning the Investment Manager more closely with shareholders. Included within these totals are the negative pass-through rent balances of £0.7 million (2024: £nil), which reflect instances where expenses exceed rental income received on properties and legacy costs related to the Parasol to Portus transfers (£0.25 million).
|
|
31 December |
31 December |
|
EPRA cost ratio including direct vacancy costs |
18.7% |
29.9% |
|
EPRA cost ratio excluding direct vacancy costs |
18.0% |
29.8% |
Adjusted earnings
The Directors consider adjusted earnings a key measure of the Company's underlying operating performance and a reference through which the Board measures dividend cover.
Adjusted earnings therefore exclude one-off items which are non-recurring in nature and non-cash items such as the amortisation of finance costs and the movement in lease incentive debtors.
Adjusted earnings for the year ended 31 December 2025 were £25.7 million (31 December 2024: £21.2 million). On a per share basis, adjusted earnings increased by 1.13 pence to 6.53 pence for the year to 31 December 2025 an increase of 21.0% (31 December 2024: 5.40 pence).
A full reconciliation between IFRS and Adjusted earnings can be found in note 35 of the Financial Statements.
Dividends
|
Declared |
Pence per Share |
In respect of financial year ended |
Paid |
|
20 March 2025 |
1.3650 |
31 December 2024 |
11 April |
|
20 May 2025 |
1.4055 |
31 December 2025 |
27 June |
|
9 September 2025 |
1.4055 |
31 December 2025 |
3 October 2025 |
|
27 November 2025 |
1.4055 |
31 December 2025 |
19 December 2025 |
The dividend was 1.17x (2024: 0.99x) covered on an adjusted basis for the year. This measure is based upon adjusted earnings relative to dividends paid in the 12-month period.
Post-period end, the Company declared an interim dividend in respect of the financial year ended 31 December 2025 of 1.4055 pence per Ordinary share (the 'Fourth Quarterly Dividend'). The Fourth Quarterly Dividend was declared on 20 March 2026 and will be a Property Income Distribution ("PID") to shareholders on the register as at 7 April 2026.
The Company has now declared four quarterly dividends totalling 5.622 pence per share in respect of the financial year ended 31 December 2025.
EPRA net tangible assets and IFRS net assets
|
|
31 December £m |
31 December £m |
|
Investment Property |
602.8 |
624.7 |
|
Assets Held for Sale |
2.0 |
- |
|
Bank and other borrowings |
(261.7) |
(261.4) |
|
Cash |
25.4 |
27.5 |
|
Other net assets/(liabilities) |
2.3 |
(1.1) |
|
IFRS net asset value & EPRA net tangible assets |
370.8 |
389.7 |
As set out above, the EPRA Net Tangible Assets ("EPRA NTA") per share at 31 December 2025 was 94.23 pence per share, the same as the IFRS NAV per share, compared to 99.05 pence per share as at 31 December 2024. The decrease was principally a result of a reduction in the value of the investment properties.
Debt Financing
With volatility in UK interest rates over recent years, the Group's debt continues to be a valuable asset. All £263.5 million of the Group's debt is fixed-rate, with a weighted average coupon of 2.74%. It is also predominantly long term, with a weighted average maturity of 7.6 years. The earliest debt maturity will occur in mid-2028, providing strong protection from currently elevated, albeit falling, interest rates. Whilst the debt is recorded at historic cost, it has a mark to market value of £48.7 million, which is not reflected in the net asset value. Further information on the Group's debt facilities is set out in Note 19 of the financial statements.
In June 2025, Fitch Ratings re-affirmed the Group's existing long-term Issuer Default Rating of 'A-' and senior secured ratings of 'A' in respect of both debt facilities. Fitch published its first rating on the Company in August 2021 with the same Investment Grade distinctions.
The Group continues to monitor its banking covenants and maintains adequate headroom on its Interest Cover Ratio ("ICR") and Asset Cover Ratio ("ACR") covenants across both debt facilities. Further information on the Group's covenant headroom is set out in Note 2.1 of the financial statements.
Natalie Markham
CFO, Social Housing REIT
1 Net of movement on Lease incentive debtor and one-off termination fees.
2 Excludes amortisation of finance costs.
3 Formerly Westmoreland. Portus resulted from the merger of Westmoreland Supported Housing and Bespoke Supportive Tenancies (BeST) on 1 December 2025.
4 For 2024 this includes a Parasol to Portus rent-free impact.
GOING CONCERN AND VIABILITY
Going Concern
The Strategic Report and financial statements have set out the current financial position of the Group and Company. The Board has regularly reviewed the position of the Group and its ability to continue as a going concern in Board meetings throughout the year.
The Directors have reviewed the Group's forecast which shows the expected annualised rental income exceeds the expected operating and financing costs of the Group. 91.5% of rental income due and payable for the year ended 31 December 2025 has been collected. Rent arrears are predominantly attributable to two Approved Providers, My Space Housing Solutions and Portus Supported Housing (Formerly Westmoreland) both of whom have leases on a passthrough basis which materially reduces the rent received when compared to the contracted rent.
The Directors believe that the Group is still well placed to manage its financing and other business risks and that the Group will remain viable, continuing to operate and meet its liabilities as they fall due. During the year, Fitch Ratings Limited assigned the Company an investment Long-Term Issuer Default Rating of 'A-' with a stable outlook.
The Directors have performed an assessment of the ability of the Group to continue as a going concern, for a period of at least 12 months from the date of signing these financial statements. The Directors have considered the expected obligations of the Group during this period and are confident that all will be met.
The Directors have also considered the financing provided to the Group. Norland Estates Limited and TP REIT Propco 2 Limited have bank facilities with MetLife and Metlife and Barings respectively.
The loans secured by Norland Estates Limited and TP REIT Propco 2 Limited are subject to asset cover ratio covenants and interest cover ratio covenants which can be found in the table on the right. The Directors have also considered reverse stress testing and the circumstances that would lead to a covenant breach.
Given the level of headroom, the Directors are of the view that the risk of scenarios materialising that would lead to a breach of the covenants is remote.
|
|
Norland |
TP REIT |
|
Asset Cover Ratio (ACR) |
|
|
|
ACR Covenant |
x2.00 |
x1.67 |
|
ACR 31 December 2025 |
x2.39 |
x1.96 |
|
Blended Net initial yield |
7.03% |
6.40% |
|
Headroom (yield movement) |
128bps |
104bps |
|
|
|
|
|
Interest Cover Ratio (ICR) |
|
|
|
ICR Covenant |
1.75x |
1.75x |
|
ICR 31 December 2025 |
4.89x |
4.82x |
|
Headroom (rental income movement) |
64% |
61% |
Under the downside model the forecasts have been stressed to show the effect of some Care Providers ceasing to pay their voids liability, and as a result this causes Approved Providers to default under some of the Group leases. The assumptions of rent paid by two Approved Providers have been sensitised, and for an additional 5% non-rent collection provision has been made for all other Approved Providers. Under the downside model the Group will be able to settle its liabilities for a period of at least 12 months from the date of signing these financial statements. As a result of the above, the Directors are of the opinion that the going concern basis adopted in the preparation of the financial statements is appropriate.
The Group has no short term refinancing risk given the 7.6 year weighted average maturity of its debt facilities with MetLife and Barings, the first of which expires in June 2028, and which are fully fixed at an all-in weighted average rate of 2.74%.
Based on the forecasts prepared and the intentions of the Company, the Directors consider that the Group will be able to settle its liabilities for a period of at least 12 months from the date of signing these financial statements and therefore have prepared these financial statements on the going concern basis.
Viability Statement
In accordance with Principle 21 of the AIC Code, the Board has assessed the prospects of the Group over a period longer than 12 months required by the relevant 'Going Concern' provisions. The Board has considered the nature of the Group's assets and liabilities, and associated cash flows, and has determined that five years, up to 31 December 2030, is the maximum timescale over which the performance of the Group can be forecast with a material degree of accuracy and therefore is the appropriate period over which to consider the viability.
In determining this timescale, the Board has considered the following:
· The length of the service level agreements between Approved Providers and care providers.
· The future growth of its investment portfolio of properties is achieved through long-term, inflation linked, fully repairing and insuring leases.
· The Group's property portfolio has a WAULT of 22.4 years to expiry, representing a long-term income stream for the period under consideration.
· The Group's Loan Notes have a weighted average term of 7.6 years.
In assessing the Company's viability, the Board has carried out a robust assessment of the emerging risks and principal risks facing the Group, including those that would threaten its business model, future performance, solvency, liquidity and dividend cover for a five-year period.
The Directors' assessment has been made with reference to the principal risks and uncertainties and emerging risks and how they could impact the prospects of the Group and Company both individually and in aggregate. The following risks in particular have been addressed in the assessment:
1. Approved Provider default (taking into account that two of the Group's lessees have built up arrears since 2022)
2. Non-payment of voids cover by Care Providers.
The business model was subject to a sensitivity analysis, which involved flexing a number of key assumptions underlying the forecasts. The sensitivities performed were designed to provide the Directors with an understanding of the Group's performance in the event of a severe but plausible downturn scenario, taking full account of mitigating actions that could be taken to avoid or reduce the impact or occurrence of the underlying risks outlined below:
· Rental income: It is assumed that some care providers do not meet their void payment obligations, and this causes Approved Providers to default under some of the Group's leases; and rental receipts from two Approved Providers are lower than the previously contracted rent levels. An additional 5% non-rent collection was included for other Approved Providers.
· Property valuations: It is assumed that where there are void units Approved Providers will default on their leases, and those units will be valued significantly below their vacant possession value. We believe this represents a severe reduction in value.
· Inflation: No inflation uplift on rental income but costs increase in line with inflation.
The outcome in the downturn scenario on the Group's covenant testing is that there are no breaches, and the Group can maintain a covenant headroom on existing facilities.
In the downturn scenario mitigating actions to reduce variable costs would be required to enable the Group to meet its future liabilities.
The remaining principal risks and uncertainties, whilst having an impact on the Group's business, are not considered by the Directors to have a reasonable likelihood of impacting the Group's viability over the five-year period.
Based on the results of this analysis, the Directors have a reasonable expectation that the Group and Company will be able to continue in operation and meet its liabilities as they fall due during the period up to 31 December 2030.
STRATEGY AND BUSINESS MODEL
The Board is responsible for the Company's Investment Objective and Investment Policy, which is kept under constant review, and has overall responsibility for ensuring the Group's activities are in line with this overall strategy.
Atrato, the Company's new investment manager, undertook a thorough review of the properties, lessees and relevant metrics as part of its onboarding of the portfolio. Whilst the overarching strategy of the Company is unchanged, the approach being implemented by Atrato is one of transparency, proactive asset management and a renewed focus on property fundamentals. The social housing team at Atrato comprises individuals with deep sector experience, knowledge and connections. We believe Atrato is well placed to deliver on the Company's Investment Objective, optimising the Company for success.
Investment Objective
The Group's Investment Objective is to provide shareholders with stable, long-term, inflation-linked income from a portfolio of social housing assets in the United Kingdom with a focus on Specialised Supported Housing assets. The portfolio comprises investments in operating assets and the forward funding of pre-let development assets. The Group seeks to optimise the mix of these assets to enable it to pay a covered dividend increasing in line with inflation and so generate an attractive risk-adjusted total return.
Investment Policy1
To achieve its Investment Objective, the Group invests in a diversified portfolio of freehold or long leasehold social housing assets in the UK. Supported Housing assets account for at least 80% of the Group's gross asset value. The Group acquires portfolios of social housing assets and single social housing assets, either directly or via SPVs. Each asset is subject to a lease or occupancy agreement with an Approved Provider. The rent payable thereunder is, or is expected to be, subject to adjustment in line with inflation (generally CPI) or central housing benefit policy. Title to the assets remains with the Group under the terms of the relevant lease. The Group is not primarily responsible for any management or maintenance obligations under the terms of the lease or occupancy agreement, which typically are serviced by the Approved Provider lessee, save that the Group may take responsibility for funding the cost of planned maintenance. The Group is not responsible for the provision of care to residents of Supported Housing assets.
The social housing assets are sourced in the market by the Investment Manager. In asset selection, consideration is given to the alignment of an asset to supporting the impact objective sought.
The Group intends to hold its portfolio over the long-term, benefiting from generally long term upward only leases which are, or are expected to be, linked to inflation or central housing benefit policy. The Group may sell investments should an opportunity arise that would enhance the value of the Group as a whole.
The Group may forward fund the development of new social housing assets when the Investment Manager believes that to do so would enhance returns for shareholders and/or secure an asset for the Group's portfolio at an attractive yield. Forward funding will only be provided in circumstances in which:
(a) there is an agreement to lease the relevant property upon completion in place with an Approved Provider;
(b) planning permission has been granted in respect of the site; and
(c) the Group receives a return on its investment (at least equivalent to the projected income return for the completed asset) during the construction phase and before the start of the lease.
For the avoidance of doubt, the Group will not acquire land for speculative development of social housing assets. In addition, the Group may engage third party contractors to renovate or customise existing social housing assets as necessary.
Gearing
The Group uses gearing to enhance equity returns.
The Directors will employ a level of borrowing that they consider prudent for the asset class and will seek to achieve a low cost of funds while maintaining flexibility in the underlying security requirements and the structure of both the Company's portfolio and the Group.
The Directors intend that the Group will target a level of aggregate borrowings over the medium-term equal to approximately 40% of the Group's gross asset value. The aggregate borrowings will always be subject to an absolute maximum, calculated at the time of drawdown, of 50% of the Group's gross asset value.
Debt will typically be secured at the asset level, whether over a particular property or a holding entity for a particular property (or series of properties), without recourse to the Group and having consideration for key metrics including lender diversity, cost of debt, debt type and maturity profiles.
Use of Derivatives
The Group may use derivatives for efficient portfolio management. In particular, the Group may engage in full or partial interest rate hedging or otherwise seek to mitigate the risk of interest rate increases on borrowings incurred in accordance with the Investment Policy as part of the Group's portfolio management. The Group will not enter into derivative transactions for speculative purposes.
Investment Restrictions
The following investment restrictions apply:
· the Group will only invest in social housing assets located in the United Kingdom;
· the Group will only invest in social housing assets where the counterparty to the lease or occupancy agreement is an Approved Provider. Notwithstanding that, the Group may acquire a portfolio consisting predominantly of social housing assets where a small minority of such assets are leased to third parties who are not Approved Providers. The acquisition of such a portfolio will remain within the Investment Policy provided that at least 90% (by value) of the assets are leased to Approved Providers and, in aggregate, all such assets within the Group's total portfolio represent less than 5% of the Group's gross asset value at the time of acquisition;
· at least 80% of the Group's gross asset value will be invested in Supported Housing assets;
· the maximum exposure to any one asset (which, for the avoidance of doubt, will include houses and/or apartment blocks located on a contiguous basis) will not exceed 20% of the Group's gross asset value;
· the maximum exposure to any one Approved Provider will not exceed 35% of the Group's gross asset value, however the maximum aggregate exposure to the top two Approved Providers will not exceed 55%;
· the Group may forward fund social housing units in circumstances where there is an agreement to lease in place and where the Group receives a coupon (or equivalent reduction in the purchase price) on its investment (generally slightly above or equal to the projected income return for the completed asset) during the construction phase and before entry into the lease. Forward funding equity commitments will be restricted to an aggregate value of not more than 20% of the Group's net asset value, calculated at the time of entering into any new forward funding arrangement;
· the Group will not invest in other alternative investment funds or closed-ended investment companies (which, for the avoidance of doubt, does not prohibit the acquisition of SPVs which own individual, or portfolios of, social housing assets);
· the Group will not set itself up as an Approved Provider; and
· the Group will not engage in short selling.
The investment limits detailed above apply at the time of the acquisition of the relevant asset in the portfolio. The Group will not be required to dispose of any investment or to rebalance its portfolio as a result of a change in the respective valuations of its assets or a merger of Approved Providers.
Investment Strategy
The Group specialises in investing in UK social housing, with a focus on Specialised Supported Housing. The strategy is underpinned by strong local authority demand for more social housing, which is reflected in the focus on acquiring recently developed and refurbished properties across the United Kingdom. The assets within the portfolio have typically been developed for pre-identified residents and in response to demand specified by local authorities or NHS commissioners. The existing portfolio comprises investments made into properties already subject to a fully repairing and insuring lease with specialist Approved Providers in receipt of direct payment from local government (usually Registered Providers regulated by the Regulator of Social Housing), as well as forward funding of pre-let developments. The portfolio will not include any direct development or speculative development investments. Following the amendments to the Company's investment policy in May 2022, the Group can accommodate more flexible lease structures. This flexibility may include leases with shorter terms and, in certain cases, the Group may selectively take on the cost of funding planned maintenance on some properties.
In addition, we are continuing to progress the roll out of our risk-sharing clause in the Group's existing Registered Provider leases. The aim of this clause is to protect Registered Providers if factors beyond their control, such as a change in government policy in relation to Specialised Supported Housing rents, reduce the amount of rent they are able to generate from a property or properties that they lease from the Group. In some such circumstances the clause allows for the Registered Provider to agree a new rent level which is reflective of the revised circumstances. Should the new rent level not be acceptable to the Group, the Group has the ability to re-assign or terminate the lease.
Business Model
The Group owns and manages social housing properties that are leased to Approved Providers, being experienced housing managers (typically Registered Providers, which are often referred to as housing associations). The vast majority of the portfolio is made up of Specialised Supported Housing homes which are residential properties that have been adapted or built such that care and support can easily be provided to vulnerable residents who may have mental health issues, learning difficulties, physical disabilities or a combination of diagnosis. Whilst we have acquired operational properties, we focus on acquiring recently developed or adapted properties in order to help local authorities meet increasing demand for suitable accommodation for vulnerable residents. Local authorities are responsible for housing these residents and for the provision of all care and support services that are required.
The Specialised Supported Housing properties owned by the Group are leased to Approved Providers which are usually not-for-profit organisations focused on developing, tenanting and maintaining housing assets in the public and private sometimes, selectively, sectors. Approved Providers are approved and regulated by the Government with the majority through the Regulator of Social Housing (or in some instances, where the Group contracts with care providers and charitable entities, the Care Quality Commission and the Charity Commission, respectively). All of the Group's existing leases are linked to inflation, are long-term and are fully repairing and insuring - meaning that the obligations for management, repair and maintenance of the property rest with the Approved Provider.
The Group may take responsibility for funding the cost of planned maintenance and improvements to the property in order to improve the property's energy efficiency and performance. Typically, the Government funds both the rent of the individuals housed in Specialised Supported Housing and the maintenance costs associated with managing the property. In addition, because of the vulnerable nature of the residents, the rent and maintenance costs are typically paid directly by the local authority to the Approved Provider. The rent paid by the Local Authority to the Approved Provider on behalf of the residents is then paid to the Group via the lease. Ultimate funding for the rent typically comes from the Department for Work and Pensions in the form of Housing Benefits.
The majority of residents housed in Specialised Supported Housing properties require support and/ or care. Care and support provision sits outside of the Group, being provided to the residents by a separate care provider regulated by the Care Quality Commission. The agreement for the provision of care for the residents is between the Local Authority and the care provider. The care provider is paid directly by the Local Authority with funding ultimately coming from the Department of Health and Social Care. The Group has no direct financial or legal relationship with the care provider and the Group never has any responsibility for the provision of care to the residents in the properties the Group owns. The care provider will often be responsible for nominating residents into the properties and, as a result, will normally provide some voids cover to the Approved Provider should they not be able to fill the asset (i.e. if occupancy is not 100%, it is often the care provider rather than the Approved Provider that will cover the cost of the rent due on void units). Under the terms of the lease, the Group is owed full rent regardless of underlying occupancy, but monitors occupancy levels and the payment of voids cover by care providers, to ensure that Approved Providers are appropriately protected.
Assets that the Investment Manager sources for the Group to maintain an investment pipeline have been recently developed and are either specifically designed new build properties or renovated existing houses or apartment blocks that have been adapted for Specialised Supported Housing. The benefit of buying recently developed or adapted stock is that it has been planned in response to Local Authority demand and is designed to meet the specific requirements of the residents. In addition, it enables the Group to work with a number of high-quality developers on pipelines of deals rather than being reliant on acquiring portfolios of already-built assets on the open market. This has two advantages: firstly, it enables the Group to source the majority of its deals off-market through trusted developer partners and, secondly, it ensures the Group has greater certainty over its pipeline with visibility over the long-term deal flow.
As well as acquiring recently developed properties, the Group can provide forward funding to developers of new Specialised Supported Housing properties. Being able to provide forward funding gives the Group a competitive advantage over other purchasers as it enables the Group to offer developers a single funding partner for both construction and the acquisition of the completed property. This is often more appealing to developers than having to work with two separate funders during the build of a new property as it reduces practical and relationship complexity. As well as strengthening developer relationships, forward funding enables the Group to have a greater portion of new build properties in its portfolio which typically attract higher valuations, are modern and have been custom-built to meet the needs of the residents they house, helping to achieve higher occupancy levels. The Group benefits from the Investment Manager's significant experience forward funding residential properties and other social infrastructure assets. The Group will only provide forward funding when the property has been pre-let to an Approved Provider and other protections, such as fixed-priced build contracts and deferred developer profits, have been put in place to mitigate construction risk.
Since the Company's IPO, the Group has built a diversified, nationwide portfolio of assets leased to a variety of Approved Providers, serviced by over 100 care providers.
1 Approved by Shareholders on 10 February 2025.
RISK MANAGEMENT
The Board recognises that effective risk management is key to the Group's success and that a proactive approach is critical to ensuring the sustainable growth and resilience of the Group.
By way of background, the Group focuses on a single sub-sector of the UK real estate market with the aim of delivering an attractive, growing and secure income for shareholders. The Company has a specific investment policy which is adhered to and for which the Board has overall responsibility. In February 2025, the Company received shareholder approval to amend its investment policy, which will now allow for a maximum exposure of 35% to any one Approved Provider, where it was previously restricted to 30%.
The increase provides the Company with greater flexibility in capital deployment while maintaining prudent diversification, and the Board continues to monitor concentration levels closely as part of its ongoing risk oversight.
Following the appointment of Atrato as the Company's new investment manager effective from 1 January 2025, a comprehensive review of the current risk framework was undertaken.
In the Group's 2025 Interim Report, it was reported that the principal risks and uncertainties remained unchanged during the period. Following the comprehensive review undertaken by the Investment Manager, two existing principal risks were re-classified as non-material and two risks that were previously deemed non-material were elevated to principal risks. More information on the changes can be found in the Principal Risks and Uncertainties table.
As an externally managed investment company, the Company outsources key services to the Investment Manager and other service providers and relies on their systems and controls. The Board undertakes a formal review of the risks identified by the Investment Manager, with the assistance of the audit committee, twice a year to assess and challenge the effectiveness of the Company's risk management and internal control systems. The Board, supported by the Audit Committee, reviews control reports from key service providers and considers any internal control observations raised by the external auditor as part of its assessment.
The Investment Manager has responsibility for identifying potential risks at an early stage, escalating risks or changes to risk, and relevant considerations and implementing appropriate mitigations which are recorded in the Group's risk register. Where relevant the financial model is stress tested to assess the potential impact of certain risks against the likelihood of occurrence. The Board regularly reviews the risk register to ensure gradings and mitigating actions remain appropriate.
The Group's risk management process is designed to identify, evaluate and mitigate (rather than eliminate) the significant and emerging risks the Group faces and continues to evolve to reflect changes in the Group's business and operating environment. The process provides reasonable, though not absolute, assurance and supports a disciplined approach to risk‑informed decision‑making aligned with the objective of long‑term value creation for shareholders.
During the year, the Board has not identified or been advised of any failings or weaknesses in the Group's risk management and internal control systems.
Principal Risks heat map
The Board considers the principal risks to be those shown in the chart in the FY25 Annual Report. The principal risks are categorised by their 12 month outlook.
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Risks with a negative outlook over the next year |
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4 |
Volatile Trading Market |
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5 |
Inflationary Pressures |
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9 |
Poor or Inadequate Housing Management |
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Risks with a stable outlook over the next year |
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2 |
Non-payment of Voids by Care Providers |
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6 |
Regulatory Changes Impacting the Sector |
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8 |
Property Valuation Volatility |
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10 |
Debt Covenant Breaches |
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11 |
Health and Safety Non-compliance |
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Risks with a positive outlook over the next year |
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1 |
Approved Provider Default |
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3 |
Potential Impact of Climate Change |
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7 |
Non-compliance with Regulatory Standards |
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Principal Risks and Uncertainties
The table below sets out what we, the Board, believe to be the principal risks and uncertainties facing the Group. The table does not cover all of the risks that the Group may face. Additional risks and uncertainties not presently known to management or deemed to be less material at the date of this report may also have an adverse effect on the Group.
Having conducted a full review of the Group's existing risk register, the Investment Manager has assessed that the previous non-material risk of "Inflationary Pressures" should be captured within the Group's Principal Risks.
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Risk Category: Credit Approved Provider Default |
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Risk Description |
Mitigating Actions |
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The default of one or more of the Group's Approved Provider lessees could impact the rental income received from the relevant assets. If the Approved Provider cannot remedy the default, the Group may have to forfeit, assign or regear the relevant lease. This could lead to a temporary or sustained reduction in rental income. |
Under the terms of the Group's Investment Policy and restrictions, no more than 35% of the Group's Gross Asset Value may be exposed to one lessee, with no two lessees representing more than 55% of exposure. This restriction is in place to mitigate against the risk of significant rent loss in the event of an Approved Provider default. When a lessee defaults or when the Group believes it likely that a lessee would default on its lease obligations, the Group will look to move the impacted properties to another Approved Provider. The intention is to ensure both ongoing provision of services to residents, and, as much as possible, to preserve the income stream associated with the relevant properties. The Group is currently looking to restructure the agreements it has with Approved Providers to improve the security of the income it receives from them, subject to agreement with the relevant Approved Provider and the consideration of the Regulator of Social Housing. |
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Risk Category: Credit Non-payment of Voids by Care Providers. |
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Risk Description |
Mitigating Actions |
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The Group has leases with Approved Providers under which they are responsible for paying rent irrespective of resident occupancy of the underlying property. The Approved Provider will usually mitigate this risk by entering into a Service Level Agreement ("SLA") with a Care Provider under which the Care Provider agrees to cover the rent in relation to any voids in the property (the Approved Provider being unable to claim Housing Benefit for void units). If a Care Provider enters financial difficulty and is unable to meet the terms of the SLA (specifically paying the contracted voids cover to an Approved Provider), this could have a negative impact on the financial performance of the Approved Provider, impinging its ability to pay the Group its rent. This risk is compounded if there is low occupancy or persistent voids in a property. |
Whilst the Group does not have a contractual relationship with Care Providers, it monitors and engages with them to ensure, as far as reasonably possible, that they are financially viable and operationally robust. Should a Care Provider experience a deterioration in financial performance, the Group works with a wide range of alternative Care Providers who would be invited to step in to provide care services and maintain void cover arrangements. Resident occupancy is also closely monitored by the Group, who proactively engages with Approved Providers and Care Providers to optimise occupancy throughout the portfolio.
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Risk Category: ESG Potential Impact of Climate Change. |
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Risk Description |
Mitigating Actions |
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Changing weather patterns under projected climate change scenarios could physically damage the properties owned by the Group, reducing their value and impacting their operational viability. New regulatory standards (e.g. minimum EPC standards) could require capital expenditure works to improve efficiency or result in a reduction in the economic utility of properties and their valuations if not undertaken. The impact of the most prominent climate-related risks to the portfolio is assessed in detail in the Group's Task Force on Climate-related Financial Disclosures ("TCFD") reporting. |
The Investment Manager's sustainability team has been working with the operations team to assess the risk that climate change poses to the Group's properties and ensuring that protections (or plans to implement protections) are put in place for any properties that are deemed to be at high risk of material adverse impacts resulting from climate change. The key transition risks to the portfolio have been identified and qualitatively assessed. Physical risks to the portfolio have been assessed using analytical software and the out-puts of this analysis are demonstrated in the Group's TCFD reporting. The Group believes that its reporting on climate change meets regulatory requirements and is reviewed on an ongoing basis to ensure continued compliance, in conjunction with the Sustainability Committee. The Group is actively working to upgrade the portfolio so that all properties meet the current legislative target (for England and Wales) of having an EPC rating of C or above from 2030. |
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Risk Category: Economic Volatile Trading Market. |
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Risk Description |
Mitigating Actions |
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A volatile trading market for the Group's shares could inhibit its growth. Shareholders may also not be able to realise their shares at a price above or the same as they paid for the shares or at all. The Company's shares have continued to be traded at a discount to Net Tangible Assets ("NTA"), which is limiting the ability to raise additional capital and thereby grow the fund. |
The Investment Manager and the Board review share performance on an ongoing basis. Normal share market pricing management may be utilised by the Board, including share buybacks, enhanced reporting and investor engagement, within the regulated framework. |
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Risk Category: Economic Inflationary Pressures. |
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Risk Description |
Mitigating Actions |
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Inflation-linked rent reviews greater than those supported by the current Rent Settlement could impact the ability of Approved Providers to pay rent due under the leases of properties owned by the Group, since they would not be matched by increases submitted to Housing Benefit. |
The Group's portfolio benefits from annual inflation-linked leases with Approved Providers who claim Housing Benefit which is similarly inflation-linked (the current rent settlement from 2026 to 2036 permits increases of CPI + 1% annually). There is therefore alignment between the Group's contractual rental income and underlying Housing Benefit claims. To mitigate the risk of any future misalignment between contractual rent due and Housing Benefit claims, the Group has rolled out a risk-sharing clause that will link rental increases to the lower of CPI or prevailing government policy in relation to SSH rent increases. |
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Risk Category: Legal, Tax & Regulatory Regulatory Changes Impacting the Sector. |
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Risk Description |
Mitigating Actions |
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Risk of changes to the social housing regulatory regime and changes to government policy in relation to social housing and Housing Benefit policy. |
It is important that the Group works with its Approved Provider lessees to ensure that they engage with the Regulator and respond proactively to any changes in regulation or policy. It is also important that the Group understands what, if any, impact it will have on their organisation and the properties leased to them. The Group frequently engages directly with the Regulator of Social Housing ("RSH") to gain insight into any proposed regulatory changes reasonably expected to be implemented. The social housing regulatory regime, in which most of the Group's lessees operate, provides a high degree of accountability and transparency. The Group has rolled out a risk sharing clause with 66% of its Approved Providers to re-balance the apportionment of risk between the parties, including mitigating changes in central government policy relating to Specialised Supported Housing ("SSH"). |
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Risk Category: Legal, Tax & Regulatory Non-compliance with Regulatory Standards. |
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Risk Description |
Mitigating Actions |
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Should an Approved Provider lessee of the Group be deemed non-compliant by the RSH, in particular in relation to financial viability, depending on the further actions of the RSH it is possible that there may be a negative impact on the market value of the relevant leased properties. Depending on the exposure of the Group to such an Approved Provider(s), this in turn may have a material adverse effect on the Group's NTA unless the matter is resolved through an improvement in the relevant Approved Provider's rating or the transfer of leases to an alternative Approved Provider.
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The Investment Manager has established relationships with the Approved Providers with whom it works. The Approved Providers keep the Investment Manager informed of developments surrounding regulatory notices and interactions with the RSH. Where Approved Providers have been deemed non-compliant, the Group seeks to work with them to help address issues identified by the RSH. The Group has leases in place with 10 Registered Providers that have been deemed non-compliant by the Regulator and is working with them in the manner set out above. |
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Risk Category: Economic Property Valuation Volatility. |
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Risk Description |
Mitigating Actions |
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Property valuations are inherently subjective and uncertain, particularly when market liquidity and transactional evidence is low. Market conditions, which may impact the creditworthiness of Approved Provider lessees, may adversely affect valuations. The Group portfolio is valued on a Market Value (investment) basis, which takes into account the expected rental income to be received under the leases in the future. This valuation methodology provides a significantly higher valuation than the vacant possession value of a property. In the event of an unremedied default of an Approved Provider lessee, the value of those assets in the portfolio may be negatively affected. Any changes could affect the Group's NTA and the share price of the Group.
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All of the Group's property assets are independently valued on a quarterly basis by a third-party valuer (currently Jones Lang LaSalle, a specialist property valuation firm), who are provided with regular updates on portfolio activity by the Investment Manager. The valuer inspects a proportion of the portfolio annually to ensure that desktop based valuations are appropriate. The Investment Manager and Audit Committee meet with the external valuers to discuss the basis of their valuations and their quality control processes. Default risk of Approved Providers is mitigated in accordance with the "Approved Provider default" principal risk explanation provided above. In order to protect against loss in value, the Investment Manager's operational team seeks routinely to visit each property in the portfolio, and works closely with the Group's lessees to ensure, to the extent reasonably possible, their ongoing financial strength viability and that governance procedures remain robust through the duration of the relevant lease. |
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Risk Category: Service Provider Poor or Inadequate Housing Management. |
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Risk Description |
Mitigating Actions |
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Approved Providers and care providers may face a number of operational challenges (e.g. rising costs and labour shortages) heightening the risk of poor or inadequate housing management of the Group's properties. Poor property management services being provided to the individuals in the Group's properties could undermine the benefits of SSH and cause reputational damage to the Group which could negatively impact the Group's performance and/or the price of the Company's shares. Individual cases of poor housing management at a property or Approved Provider portfolio level may also reduce the referral demand for those properties, impacting the ability of Approved Provider to pay rent to the Group.
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The Investment Manager undertakes proactive property inspections to review the physical condition of the Group's properties, ensure lessee compliance with lease obligations and to observe the quality of services being provided to the Group's residents. In addition, there is frequent engagement with the Group's Approved Providers and Care Providers, along with quarterly operational and compliance surveys, to collect data on the performance of the Group's lessees and properties. A key part of the Investment Manager's due diligence pre-acquisition is to ensure that - whilst the Group has no contractual relationship with them and is not responsible for the care they provide - the Care Provider attached to a project is capable to deliver the quality of care provided and financially robust to meet its void obligations. Most Care Providers are regulated by the Care Quality Commission ("CQC"), offering an additional layer of regulation and oversight. The Investment Manager operations team monitor the Care Providers on an ongoing basis. The team engage with Care Provider staff when carrying out property inspections, hold regular calls with Care Providers to which the Group has the largest exposure, monitor CQC ratings for those Care Providers relevant to the Group and track these ratings using an internal CQC register that the team updates on an ongoing basis. |
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Risk Category: Financial Performance Debt Covenant Breaches. |
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Risk Description |
Mitigating Actions |
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The borrowings the Group currently has and which the Group uses in the future may contain loan to value and interest covenants ratios, alongside sustainability targets. If property valuations and rental income significantly decrease, such covenants could be breached. The impact of such an event could result in an increase in borrowing costs, a requirement for additional cash or property collateral, payment of a fee to the lender, a sale of an asset or assets and/or the forfeiture of an asset(s) to a lender. Any of the above could result in a material decrease to the Group's NTA. |
The Investment Manager monitors relevant debt covenants on an ongoing basis. In the unlikely event that an event of default occurs under these covenants, the Group has a remedy period during which it can potentially cure the covenant breach by either injecting cash collateral or utilising unencumbered property assets in order to restore covenant compliance. |
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Risk Category: Legal, Tax & Regulatory Health and Safety Non-compliance. |
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Risk Description |
Mitigating Actions |
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Any non-compliance with Health and Safety ("H&S") standards by an Approved Provider(s) of the Group could lead to H&S issues for the individuals living in the properties owned by the Group. This could have serious moral, reputational and financial implications for the Group. |
The contractual responsibility for making sure that the property is compliant sits with the Approved Provider and not the Group. However, to mitigate the risk of non-compliance, the Investment Manager's operations team assess Health and Safety compliance by conducting property visits, issuing bi-annual compliance surveys sent to all Approved Providers and by engaging regularly with the senior teams at each Approved Provider. Compliance of the Group's properties is also tracked on the internal REIT Risk Register, managed by the Investment Manager's operations team. |
Stakeholder Engagement
This section describes how the Board engages with its key stakeholders, how it considers their interests and the outcome of engagement when making its decisions, the likely consequences of any decision in the long term, and how the Board further ensures that it maintains a reputation for high standards of business conduct. The Group is committed to continual stakeholder engagement and implements a cycle of constant engagement at all stages of the Group's investment lifecycle.
Section 172 (1) Statement
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Stakeholder |
Why is it important to engage? |
How have the Investment Manager / Directors engaged? |
What were the key topics of engagement? |
What was the feedback obtained and the outcome of the engagement? |
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Shareholders |
Investment from our shareholders plays an important role, providing capital to ensure we can deliver additional housing into the Specialised Supported Housing sector. Through the investment of private capital into an under-funded sector, we can achieve a positive social impact whilst ensuring our shareholders receive a long-term inflation-linked return. |
The way in which we engage with our shareholders is set out in our Corporate Governance Report. |
Financial and operational performance.
Share price discount to NAV and potential rectification action.
The share price, potential share buybacks and potential sales from the portfolio.
The regulatory environment of the Specialised Supported Housing sector.
Environmental, social and governance considerations.
Understanding the underlying concerns of shareholders that resulted in votes against resolutions 3, 4, 5 and 13, at the Company's 2025 Annual General Meeting.
The Company's key service provider appointments, including the Investment Manager and broker arrangements.
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The Board and the Investment Manager continue to evaluate the benefits of deploying available capital or pursuing share buybacks in the context of shareholder feedback, market conditions and the Company's ambition for growth.
The Board and Investment Manager consider shareholder concerns when speaking to the Regulator of Social Housing and agreed to keep shareholders updated of any developments. We understand the importance of, and are committed to, working with Approved Providers to address the concerns of the Regulator.
The Investment Manager has enhanced environmental, social and governance considerations within its investment process, and within its own business in discussion with the Board's Sustainability and Impact Committee. Refer to Sustainability Report for more information.
During FY25, the Board consulted with a number of the Company's shareholders in accordance with Provision 5.2.4 of the AIC Code of Corporate Governance in relation to the resolutions regarding Director re-elections at the 2025 AGM. As disclosed within the Interim results to 30 June 2025, the feedback from the shareholder consultation has informed the Board's subsequent actions and adjustments were made to the Company's governance and strategic approach.
Atrato was appointed as the Company's new Investment Manager from 1 January 2025. |
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Residents |
Our strategy is centred on leasing Specialised Supported Housing to Approved Provider lessees to house vulnerable adults. We remain focused on providing homes which offer the vulnerable adult residents greater independence than institutional accommodation. |
The Investment Manager monitors resident welfare through engagement with Approved Providers to assess the quality of the service they are delivering to residents. The Investment Manager receives quarterly reports from Approved Providers to ensure compliance with health and safety standards. This information is considered in the context of qualitative information from discussions with Care Providers operating in each Approved Providers' properties, market intelligence and feedback from the Investment Manager's inspections. The Investment Manager does not generally engage with residents directly. Instead, day-to-day engagement is done by care providers and, to a lesser extent, Approved Providers. |
We provide oversight of resident welfare by reviewing the Investment Manager's due diligence on new acquisitions or developments prior to occupation. We then monitor information provided by the Investment Manager on our Approved Provider lessees' compliance with health and safety standards to ensure that residents are looked after by the Group's counterparties; we request updates on any health and safety issues every quarter. |
Resident issues raised as a result of engagement through care providers are addressed with the relevant Approved Provider.
Any compliance issues are remedied with any associated works undertaken.
The Group's investment decisions are informed by the long-term needs of the Approved Provider lessees and their residents.
The Group has commenced a portfolio-wide EPC Upgrade Programme, which will deliver more efficient homes for our Approved Providers to house vulnerable adults safely and efficiently ahead of the anticipated regulatory deadline. |
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Investment Manager |
The Investment Manager is responsible for executing the Investment Objective within the Investment Policy of the Company. |
The Board maintains regular and open dialogue with the Investment Manager at Board meetings, supplemented by regular contact on operational and investment matters outside of meetings. |
In addition to all matters related to the execution of the Company's Investment Objective, the Board engages with the Investment Manager on developments in the market and updates from the Regulator of Social Housing. The Board appointed a new Investment Manager, Atrato, from 1 January 2025. |
The Investment Manager produces quarterly reports for the Board, detailing various governance and operational matters at the Board's request. Capital allocation is also considered with regard to the views of the Board. The Board closely monitored the transition process to the new Investment Manager, Atrato, to ensure that it was effective and minimised disruption to the Group's stakeholders. The collaboration between the Board, the former investment manager and Atrato ensured that the welfare of the residents of the Group's properties was prioritised, operational performance was preserved and that progress continued with corporate initiatives whilst the transfer was affected.
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Approved Providers |
Our relationship with Approved Providers is integral to ensuring rent is paid to the Group and that properties are managed appropriately. The Group's leases with Approved Providers are on fully repairing and insuring terms - meaning that Approved Providers are responsible for management, repair and maintenance, in addition to tenanting the properties and claiming rents on behalf of the residents via Housing Benefit from the relevant local authority. |
The Investment Manager looks to maintain strong relationships with Approved Providers, having formal meetings with senior management at least every six months as well as engaging more frequently on an ad hoc basis on a variety of matters. Periodic operational surveys and biannual compliance surveys are provided to the Investment Manager. |
The Investment Manager discussed a number of topics with Approved Providers including that properties are managed in accordance with their leases; financial reporting and governance; and specific property-related issues such as occupancy, health and safety issues, rent levels, management accounts and governance. During the year, the Investment Manager had significant engagement with a number of Approved Providers in relation to lease assignments. |
Refer to the Fund Manager's Report. Further detail on the progress of the stabilisation following the assignment of leases from Parasol to Portus (formerly Westmoreland), the ongoing assignment away from My Space and the successfully completed assignment from Pivotal to IHL is set out in the Investment Manger's Report. |
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Care |
Our Approved Providers house residents who receive care and support from care providers. It is important to ensure that these vulnerable residents receive the best possible care. In addition, the care providers often cover the rental cost of void units so we engage with care providers to ensure our Approved Providers are able to pay our rent in the event of persistent empty units. Therefore, whilst the Company has no contractual relationship with the care providers operating in the portfolio, they play an essential role in the occupancy levels of our properties and strong engagement with the Group ensures the best possible outcomes for our Approved Provider lessees and their residents. |
The Investment Manager meets periodically with the largest ten care providers, who supporting approximately half of residents across the portfolio, as part of its due diligence processes. In addition, the Investment Manager regularly meets and engages with care provider representatives when inspecting the Group's portfolio, when reviewing quarterly data and on an ad hoc basis when matters arise. |
The Investment Manager engages with care providers on the performance of the Approved Provider lessees including health and safety compliance, property management by Approved Providers, their financial and operational capacity for new schemes, occupancy levels and financial performance. |
The Investment Manager will not consider deals where care providers do not meet the care or governance standards expected or where care providers are unable to demonstrate the financial strength to meet their obligations under a service level agreement. Following engagement, scopes of work have been updated with input from care providers to ensure future properties acquired or developed meet the specific care needs of residents. Whilst done at the relevant Local Authorities' discretion, care providers have been changed where expectations around the standard of care were not met or where engagement identified care providers in financial difficulties. |
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Local |
Local Authorities are responsible for identifying appropriate housing and care for the individuals who live in the Group's properties. New acquisitions are assessed to ensure that they meet the expectations of the relevant Local Authority in order to ensure that schemes are supported and that referrals are made as efficiently and considerately as possible. |
When looking at a new acquisition, the Investment Manager engages with, or receives feedback from, various departments within Local Authorities including Commissioners and Housing Benefit officers. The Investment Manager will look to engage with a Local Authority in relation to an existing scheme if required (for example, if a new care provider is needed).
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The aim of engagement with Local Authorities is, as much as possible, to ensure that the properties acquired by the Group are consistent with the requirements of the relevant Local Authority. Where necessary, Local Authorities will be engaged with directly post-acquisition of a property to access ongoing demand levels and to determine any changes in commissioning strategy.
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The Investment Manager will listen to feedback from Local Authorities and, where possible, will work with Approved Providers to improve and upgrade properties to ensure that they meet ongoing commissioning requirements.
The Group completed the pilot phase of its building efficiency upgrade programme across 11 properties. Refer to the Fund Manager's Report for more detail.
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The |
The Regulator of Social Housing ("RSH") regulates Registered Providers of social housing to ensure providers are financially viable, properly governed and are delivering on consumer standards. It is important to ensure that, as much as possible, the Group reflects observations made by the RSH in its investment structures and its engagement with its lessees. |
The Investment Manager has periodic contact with the RSH to understand the key concerns and priorities for the Specialised Supported Housing Sector. |
Discussions with the RSH are focused on ensuring the market evolves in line with its observations, and Registered Providers can best focus on addressing the RSH's observations.
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The Investment Manager continues to work with the Boards of its lessees to understand how best we can help them meet the standards of the RSH. |
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Lenders |
The Group's investments in social housing assets are partly funded by debt. Prudent debt financing is required to achieve the Group's return targets. All secured debt is long-term and it is important for the Group and the Investment Manager to form a good relationship with our debt provider partners and provide them with all information and commentary required.
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The Investment Manager engages with its lenders mainly via the reporting of financial and information covenants under the existing loan agreements on a quarterly basis. In addition, there are regular ad-hoc engagements in relation to general topics relating to the social housing sector as well as specific topics arising from the financial and operational performance of the Group's activities and future opportunities, and any other general matters affecting the relationship between the Group and the lenders. |
The Group engaged on the following topics: financial and information covenant reporting and active asset management activities undertaken by the Group e.g. any other asset management activity that requires lenders' consent.
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The Group is fully compliant with its debt covenants. The Investment Manager's pro-active engagement with the Group's lenders is welcomed by them and, to date, no concerns in relation to the performance of its loans have been raised by the lenders. The Board continues to monitor compliance with debt covenants and keeps liquidity under constant review to make certain the Group has sufficient headroom in its debt facilities. In June 2025, Fitch Ratings Limited reaffirmed the Group's existing Investment Grade, long-term Issuer Default Rating (IDR) of 'A-' and a senior secured rating of 'A' for the Group's existing loan notes.
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Principal Decisions
Principal decisions have been defined as those that have a material impact on the Group and its key stakeholders. In taking these decisions, the Directors considered their duties under section 172 of the Act.
My Space Housing Solutions
During the year, the Board announced that that an option agreement had been agreed with My Space Housing Solutions ahead of the approval of its company voluntary arrangement ("CVA") proposal. The option arrangement allowed the Company to transfer all My Space leases within a 12-month period following completion of the CVA challenge period.
Asset Disposals
The Board decided to sell two non-performing properties at Oxford Grove to North Devon Council in line with book value.
Change to Valuation Frequency
In May 2025 the Board announced the change from a quarterly to bi-annual valuation of the Company's portfolio, bringing the Company in line with the wider listed UK Real Estate sector. The Board believes this change is in the best interests of its shareholders as results in a reduction of ongoing costs to drive further efficiency savings.
Increased Annual Target Dividend
In May 2025, the Board increased the annual target dividend for the year ended 31 December 2025 to 5.622 pence per Ordinary share representing a 3.0% increase on the annual dividend paid in the previous financial year.
The decision, which the Board believes was in the best interests of the Company's shareholders, was driven by the successful progress made, at that time, on the transfer of the 38 properties from Parasol to Westmoreland; the cost reductions achieved following the appointment of Atrato Partners Limited; and the improvements in the Company's earnings.
Appointment of New Non-Executive Directors
As part of the ongoing succession planning, during the year, the Company undertook a formal recruitment process led by the Nomination Committee, with the support of an independent search consultancy, for the appointment of new Board members. This process actively encouraged a diverse pool of candidates who could contribute specific skills and experience identified by the Board. The Board were pleased to announce the appointment of Bryan Sherriff as an Independent Non-Executive Director with effect from 1 January 2025, Fionnuala Hogan with effect from 10 November 2025 and Jos Short with effect from 1 March 2026.
It was also announced that, as part of the Succession Plan for the Board, Ian Reeves would step down from his role as an Independent Non-Executive Director at the 2025 Annual General Meeting following an orderly handover.
Board Approval of the Strategic Report
The Strategic Report has been approved by the Board of Directors and signed on its behalf by:
Chris Phillips
Chair
25 March 2026
DIRECTORS' RESPONSIBILITIES STATEMENT
The Directors are responsible for preparing the annual report and the financial statements in accordance with UK adopted international accounting standards and applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with UK adopted international accounting standards and have elected to prepare the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss for the Group for that period.
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· for the Group financial statements, state whether they have been prepared in accordance with UK adopted international accounting standards, subject to any material departures disclosed and explained in the financial statements;
· for the Company financial statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business; and
· prepare a Directors' report, a strategic report and Directors' remuneration report which comply with the requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced, and understandable and provide the information necessary for shareholders to assess the Group's performance, business model and strategy.
Website Publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
Directors' Responsibilities Pursuant to DTR4
The Directors confirm to the best of their knowledge:
· The financial statements have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position of the Group and the Company and profit and loss of the Group.
· The Annual Report includes a fair review of the development and performance of the business and the financial position of the Group and Company, together with a description of the principal risks and uncertainties that they face.
Approval
This Directors' responsibilities statement was approved by the Board of Directors and signed on its behalf by:
Chris Phillips
Chair
25 March 2026
Sustainability Strategy
Our Sustainability Strategy is structured by three key pillars; each aligned to the UN Sustainable Development Goals ("SDGs") most material to the Company.
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ESG Pillar |
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PILLAR 1 | Thriving People |
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PILLAR 2 | Sustainable Homes |
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PILLAR 3 | Engaged Governance |
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Aim |
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Putting resident welfare first and delivering on our impact objectives to create long-lasting positive social outcomes |
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Taking actions to improve the quality and sustainability of our homes and create a more energy efficient, climate-resilient portfolio |
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Making responsible choices, managing risks and partnering with stakeholders to create long-term stakeholder value |
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Aligned UN SDGs |
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3, 10, 11 |
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11, 12, 13 |
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8, 17 |
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Impact Goal |
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Increase the provision of Specialised Supported Housing, delivering positive |
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Impact Objectives |
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Deliver socially needed accommodation |
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Fund & manage sustainable developments |
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Enable the provision of quality services |
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KEY |
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Number of homes and potential residents Occupancy rate % of homes defined as 'new' to the SSH sector |
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% homes EPC C or above Number of EPCs improved via EPC Upgrade Programme % assets climate risk screened |
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Number of inspections per 100 properties % of lessees met with annually Resident satisfaction (tenant satisfaction measures) |
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Outcomes |
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Improved resident wellbeing |
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Net Zero by 2050 |
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Sector growth and maturity |
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Transparent Reporting |
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Sustainability Report
The Company is committed to reporting its sustainability performance, methodology and data every year in a comprehensive and transparent way.
The Company is pleased to have prepared its first standalone Sustainability Report which details the Company's performance against our Sustainability Strategy and contains our sustainability disclosures aligned with best practice frameworks including EPRA's Sustainability Best Practices Recommendations ("sBPR").
Taskforce On Climate-Related Financial Disclosures ("TCFD") Report
The TCFD recommendations provide a framework for organisations to more effectively take account of and disclose climate-related risks and opportunities. The TCFD Report for the Company, included below, contains voluntary climate-related financial disclosures for the reporting period 1 January 2025 - 31 December 2025 in relation to governance, strategy, risk management and metrics and targets.1 It addresses all four core elements and 11 TCFD Recommended Disclosures as detailed in "Recommendations of the Task Force on Climate-Related Financial Disclosures".2
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Recommendation |
Recommended Disclosures |
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Governance Disclose the organisation's governance around climate-related risks and opportunities. |
a. Describe the Board's oversight of climate-related risks and opportunities. |
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b. Describe management's role in assessing and managing climate-related risks and opportunities. |
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Strategy Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation's businesses, strategy, and financial planning where such information is material. |
a. Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. |
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b. Describe the impact of climate-related risks and opportunities on the organisation's businesses, strategy, and financial planning. |
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c. Describe the resilience of the organisation's strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. |
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Risk Management Disclose how the organisation identifies, assesses, and manages climate-related risks. |
a. Describe the organisation's processes for identifying and assessing climate-related risks. |
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b. Describe the organisation's processes for managing climate-related risks. |
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c. Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation's overall risk management. |
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Metrics and Targets Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. |
a. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. |
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b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas ("GHG") emissions and the related risks. |
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c. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. |
1 The Company is not in scope of the UK's Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 or the FCA listing rules TCFD reporting requirements (ESG 2.1) as yet, but the Company has decided to produce this TCFD report ahead of FCA expectations to demonstrate its support for the disclosures.
2 Task Force on Climate-related Financial Disclosures, "Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures" (June 2017).
Governance
Describe the Board's oversight of climate-related risks and opportunities.
The Board is responsible for setting the Company's sustainability strategy and overseeing the Company's approach to climate-related risks and opportunities affecting its business.
The Board established its 'Sustainability & Impact Committee' in May 2023, ensuring that sustainability issues, including climate change, are discussed in sufficient detail and given appropriate focus. The Sustainability & Impact Committee, chaired by Bryan Sherriff, meets not less than once a year (and more frequently as required) and has responsibility for overseeing the delivery of the Company's Sustainability Strategy, including identification and management of climate-related risks. The Board is primarily informed of climate-related risks and opportunities by the Investment Manager through the meetings of the Sustainability & Impact Committee.
Climate-related risks are assessed as part of the standard due diligence process when acquiring or funding the development of new properties. Identified climate risks are presented in the materials provided to the Investment Committee and, where relevant, will be discussed during committee meetings to assess the potential impact of these risks on the property and/or development and to determine (a) the time frame over which they might materialise and (b) the potential impacts they may have both operationally and in terms of asset value.
The Board is committed to enhancing the Company's understanding of climate risks and opportunities and, as part of this, has approved budget allocation for ongoing climate-related activities for the next reporting year. This facilitates forward planning and preparation of sustainability priorities for the next reporting year.
Describe management's role in assessing and managing climate-related risks and opportunities.
The Investment Manager is responsible for the day-to-day delivery of the sustainability strategy as approved by the Board on behalf of the Company, including the assessment, management and reporting of climate-related risks and opportunities.
At the Investment Manager level, assessment and management of climate-related risks and opportunities is shared across the Social Housing Team and the wider business of the Investment Manager.
The Investment Manager has a dedicated Head of Sustainability who is responsible for the operational delivery of climate-related risks and opportunities measures within the Investment Manager's operations and leads the provision of climate risk advice to the Company. The Head of Sustainability chairs an internal ESG Working Group, whose members include representatives from fund management, asset management and property and data management.
Climate risk and TCFD is a standing agenda item for this Working Group, to ensure appropriate oversight, discussion and review of climate-related issues, as well as to facilitate and enhance understanding of climate impacts across the social housing team.
The Working Group is responsible for oversight, monitoring and management of the Company's sustainability risks and opportunities including those related to climate change. This includes the review, monitoring and management of climate-related risks relevant to current and future assets in the portfolio. The Working Group aims to meet at least fortnightly to discuss ESG issues impacting the Company, and climate risk is a standing agenda item as part of these meetings. Other members of the social housing team are invited on an ad-hoc basis to meetings with climate-related agenda items. Meeting minutes are circulated to the full Working Group following every meeting. The Working Group also has responsibility for overseeing relevant climate-related targets and the preparation of the Company's climate-related reporting and co-ordination of third-party service providers who provide input into this, including overseeing preparation of the Company's GHG inventory.
During the reporting period, the Investment Manager's Head of Sustainability delivered training to the social housing team on the topic GHG accounting fundamentals, in order to support the management of GHG related issues in the Company's activities.
Strategy
Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term.
Investing in real assets exposes the Company to both physical and transition risks associated with climate change. The Company's properties may require additional work to bolster their resiliency against increasingly extreme weather events or require efficiency upgrades to meet evolving regulation on minimum efficiency standards, as the Government seeks to mitigate emissions from the building sector, one of the largest sources of emissions in the UK.
The following climate-related risk categories related to the transition to lower-carbon economy categories were considered as part of the Company's broader assessment of material sustainability risks and opportunities:
· Policy and legal
· Technology
· Market
· Reputation
From this review, the following material climate-related risks and opportunities were identified:
1. Energy Management Risk
2. Energy Management Opportunity
3. Product Design and Lifecycle Management Risk
4. Physical Impacts of Climate Change Risk
See Table 1 for a description of these risks and their potential impact.
The Company has utilised Munich RE's Location Risk Intelligence software platform ("Munich RE platform"), to analyse and assess the physical impact risks to its property resulting from natural hazards and climate change. The Munich RE platform combines historical event data with future climate projections (under different climate scenarios) to assess current and future risks. The Company's entire address list was inputted into the Munich RE platform to assess the portfolio's exposure to acute and chronic natural hazards and climate risk.
Climate hazards assessed by the Munich RE platform
|
Tropical Cyclone |
Heat Stress Index |
Precipitation Stress Index |
Permafrost Extent |
|
River Flood (Defended) |
Heat-Humidity Stress Index |
Drought Stress Index |
Water Scarcity |
|
Storm Surge (Defended) |
Cold Stress Index |
Sea Level Rise |
Fire Weather Stress Index |
|
Subsidence |
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The following selection of acute and chronic climate-related physical risks were chosen for further analysis using the Munich RE platform:
1. Acute Climate Hazards
· Storm surge
· River flood risk
2. Chronic Climate Hazards
· Sea level rise
· Water scarcity
The results of this analysis, including details of the climate scenarios and time horizons applied, are disclosed further below in this report.
Describe the impact of climate-related risks and opportunities on the organisation's businesses, strategy and financial planning.
A high-level summary of the potential impact of material climate-related risks and opportunities on the Company's businesses, strategy and financial planning is provided in the table below:
Table 1: Material climate-related risks and opportunities
|
Material Topic |
Risk/ Opp |
Description |
Magnitude |
Likelihood |
Potential Financial Impacts |
|
Energy Management and GHG emissions* |
Risk |
Risk arising from the ongoing energy transition and evolving regulatory landscape increasing expectations around housing energy efficiency, coupled with the potential introduction of legislation mandating minimum energy performance standards. SOHO may also need to adapt to future energy related regulation as the UK progresses toward net zero by 2050. |
4 |
4 |
23% of the portfolio currently holds an EPC rating of D or below. Although these ratings are not presently a significant determinant of occupier demand, they are gaining prominence among investors and valuers. The EPC Upgrade Programme is intended to mitigate this risk. While expenditure will be phased over the next five years, the likelihood of failing to meet minimum EPC standards may increase during this time. |
|
Opp |
Opportunity to partner with stakeholders and leverage experience to improve energy efficiency, and install on-site renewable infrastructure, reducing energy bills for tenants and increasing comfort for residents, while also ensuring the portfolio retains its long-term value and liquidity. |
4 |
2 |
The EPC Upgrade Programme offers potential benefits such as increasing asset values and improving tenant affordability by enhancing building energy performance. This is considered a medium‑term opportunity, coinciding with the expected implementation of minimum EPC rating standards, when non‑compliant properties may be subject to a 'brown' discount. |
|
|
Product Design and Lifecycle Management |
Risk |
Risk that forward-funded developments or purchased buildings are not built with circularity principles such as resource efficiency, durability and recyclable materials and/or do not meet regulatory requirements or market expectations. |
3 |
3 |
As the Company does not currently engage in significant development activity these risks relate to existing buildings where they are not fit for purpose. See above for discussion on the Company's strategy for dealing with minimum EPC rating risks. Further unmatched costs may also arise at lease expiry. |
|
Physical |
Risk |
Risk that properties within SOHO's portfolio will face increasing exposure to climate related physical impacts. More frequent and severe climate events could place pressure on existing infrastructure and heighten operational and tenant related risks over time. In extreme cases, physical damage could limit residents' ability to remain in their homes. These risks are particularly significant given the vulnerability of many of the Group's residents. |
2 |
3 |
Although the risk magnitude could be high for individual properties, the dispersed nature of SOHO's portfolio means the overall risk to the Company is considered low. Any financial impacts from damage -which could reduce revenue or impair the value of certain properties - - would be mitigated by insurance coverage. However, the increasing likelihood of such risks may lead to higher insurance costs in future. |
* The period over which each risk first becomes material is defined as: Short-term: 0-2 years; Medium-term: 2-5 years; and Long-term: over 5 years. These time scales are aligned to the Company's overall risk management framework, considering the nature of the Company's assets and liabilities. GHG Emissions and the Physical Impacts of Climate Change were not specifically determined as having any material near-term risks and opportunities, through the Company's materiality assessment. However, it was deemed appropriate to continue reporting on these issues with a long-term risk and opportunity perspective and due to their importance from a broader sector focus and sustainability reporting best practice.
See the Company's standalone Sustainability Report for further details on the Company's broader list of material sustainability topics.
Over the next reporting period the Company plans to review its risk mitigation opportunities with the aim to improve the Company's resiliency to these identified risks moving forward.
Describe the resilience of the organisation's strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.
The Company has performed a quantitative scenario analysis assessment using the Munich RE platform. The aim of this assessment was to understand the impact of relevant climate risks to the Company's portfolio under different climate scenarios and timeframes.
The available scenarios in Munich RE's platform are:
|
Scenario |
Description |
|
SSP1-2.6 Sustainability |
In this most optimistic scenario, all countries (with the strong supporting the weak) move gradually but consistently towards a more sustainable economic system. Inequality within and between countries is reduced and consumption is orientated towards lower material growth and lower resource and energy consumption. This moderate scenario leads to an expected warming at the end of the 21st century of around 1.0-2.4°C relative to the pre-industrial period (1850-1900). The SSP1-2.6 scenario is comparable to the RCP2.6 scenario. |
|
SSP2-4.5 Middle of the road |
In this scenario, global and national institutions work towards sustainable development but make slow progress. Development and income growth proceed unevenly, with some countries making relatively good progress while others fall short of expectations. The environment experiences degradation but the overall intensity of resource and energy use declines. This scenario would be expected to lead to a warming by the end of the 21st century of between 2.1 and 3.5°C relative to the pre-industrial period (1850-1900). The SSP2-4.5 scenario is comparable to the RCP4.5 scenario. |
|
SSP3-7.0 Regional rivalry |
Under this scenario a resurgence in nationalism, concerns about competitiveness and security, and regional conflicts push countries to increasingly focus on domestic or, at most, regional issues. Achievement of national and regional food, energy, and security goals are prioritised above international cooperation to tackle shared goals. Economic development remains material-intensive and environmental degradation worsens. Under this scenario warming by the end of the 21st century is expected to be between 2.8 and 4. °C. The SSP3-7.0 scenario is comparable to the RCP7.0 scenario. |
|
SSP5-8.5 Fossil-fuelled development |
In this scenario faith is placed in competitive markets and innovation. Fossil fuels are increasingly exploited and social and economic development drives the adaptation of resources and energy intensive lifestyles around the world. Local environmental problems like air pollution are managed, but high greenhouse gas releases drive excessive global warming and related increases in natural catastrophe exposure. Under this scenario warming by the end of the 21st century is expected to be between 3.3 and 5.7°C. The SSP5-8.5 scenario is comparable to the RCP8.5 scenario. |
The findings from the Munich RE platform assessment showed the Company's assets have a current low overall vulnerability to natural hazards and physical climate risks, specifically:
· 98% of properties have a current very low risk from river flooding.
· 97% of properties have a current very low risk from storm surge.
· 90% of properties have a current very low or low risk from water scarcity.
· Note: sea level rise risk is only modelled from 2030 onwards.
These risks were also assessed using the Munich RE platform under the different climate scenarios offered on the platform and across both 2030 and 2050 time horizons.
The Company has chosen to disclose the SSP5 8.5 scenario results below, as a robust stress test of the portfolio's potential exposure to severe climate conditions:
River flooding: The percentage of properties at very low risk changed from 98% to 88% in 2030, remaining at 88% at 2050.
Storm surge: The percentage of properties at very low risk did not change at 2030 or 2050.
Water Scarcity: The percentage of properties at very low to low risk did not change at 2030 or 2050.
Sea level: 100% of properties are at very low risk from sea level rise at 2030, changing to 99% at 2050.
Over the next reporting cycle, the Company plans to further validate the outputs from the Munich RE platform, including specific review into the assets identified from this assessment as having an above 'low' or 'very low' risk exposure to various climate-related risks. Through this ongoing work, where necessary, the Company will determine appropriate strategic responses to validate asset-level risk, for example, the development of site-specific risk management plans or engagement of further environmental surveys.
Risk Management
Describe the organisation's processes for identifying and assessing climate-related risks.
Describe the organisation's processes for managing climate-related risks.
Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation's overall risk management.
The Company's approach to risk assessment is as set out in the Our Principal Risks and Uncertainties Section.
The Investment Manager has overall responsibility for the Company's risk management and internal controls, with the Audit and Risk Committee reviewing the effectiveness of the Board's risk management processes on its behalf. The Sustainability & Impact Committee is responsible under the delegated authority of the Board for the monitoring of climate-related risks which are incorporated into the risk management process.
The Sustainability & Impact Committee considers both physical and transition climate-related risks, including existing and emerging regulatory requirements related to climate change.
The method used to evaluate the importance of each climate risk that the Company is exposed to is aligned to the Company's general risk management structure. It involves a matrix with a 5-point rating system for both the likelihood and magnitude of each risk.
· Likelihood: low, moderate, high; and
· Magnitude: low, moderate, high.
The alignment to the Company's general risk management structure allows for the climate-related risks to be incorporated into broader risk management and mitigation procedures. These risks are included in the risk register of the strategy, which is reviewed regularly with the Board of the Company. The risk register is approved by the Board and evaluated and approved by the Risk Committee.
Metrics and Targets
Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process.
The Company recognises the need for continuous improvement of data collection and monitoring to accurately assess climate risks and opportunities in line with its strategy and risk management process.
The Company measures and monitors the following key climate-related metrics:
1) EPC ratings: see breakdown below;
2) Energy consumption: see details of energy consumption data provider below; and
3) GHG Emissions: see GHG Inventory below
EPC Ratings
The EPC ratings of each property are monitored on an ongoing basis. Currently, 77% of the properties within the portfolio are rated at C or above. The chart below shows the EPC breakdown of properties as at 31 December 2025.
Energy Consumption Data
The Company has engaged the data provider, Perse, to enable access to actual energy consumption through direct APIs to every property's meter. This data is utilised in the preparation of the Company's GHG Inventory.
The energy consumption data from Perse not only improves the completeness and accuracy of the Company's GHG Inventory but also supported the emissions reductions modelling used to identify available decarbonisation levers for SOHO's emissions reductions targets.
Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.
GHG Inventory
The Company engaged external consultants, Anthesis, to prepare its GHG Inventory for FY25 in line with the GHG Protocol methodology. The Company does not have any Scope 1 and 2 emissions but has reported all relevant categories of Scope 3 emissions.3
The Company's GHG Inventory is disclosed below in Table A (see Appendix for further details of the GHG Inventory methodology).
SOHO FY25 GHG Emissions Inventory
|
Emissions |
FY23 |
FY24 |
FY24 restated4 |
FY25 |
||
|
|
Location-based |
Location-based |
Market-based |
Market- based |
Location-based |
Market-based |
|
Scope 1 and 25 |
N/A |
N/A |
N/A |
N/A |
N/A |
N/A |
|
1. |
Not measured |
1,216 |
1,216 |
1,216 |
967 |
967 |
|
2. |
N/A |
N/A |
N/A |
0 |
770 |
770 |
|
6. |
Not measured |
3 |
3 |
3 |
3 |
3 |
|
13. |
4,763 |
6,044 |
7,570 |
5,878 |
5,859 |
6,133 |
|
Scope 3 Total |
4,7637 |
7,263 |
8,789 |
7,096 |
7,600 |
7,874 |
In FY25, the largest source of emissions for the Company was again Scope 3 DLA at 78% of FY25 emissions, followed by PG&S at 12% and Capital Goods at 10%. The Company's FY25 GHG Inventory indicates an overall slight increase in GHG emissions (location-based) on prior year, largely attributable to the development of the Chorley site.
3 The Company is an externally managed business and does not have any employees or office space. Note: sub-scope categories may not equal the Scope totals due to rounding.
4 FY24 figure restatement due to availability of actual data on renewable electricity purchased across SOHO's portfolio (also utilised in FY25).
5 Scope 1 and 2 emissions are not applicable for the Company as it is an externally managed business and does not have any employees or office space.
6 FERA emissions associated with tenant activities under Scope 3 DLA are not included in the figures reported.
7 FY23 emissions data incorporated over 90% of the Company's electricity and gas meters with the remaining portfolio meters unable to be matched within the reporting period and excluded. The emission data calculated in FY23 used property gas and electricity consumption only and therefore was not a complete Scope 3 figure. From FY24 onwards, all applicable categories of Scope 3 emissions have been calculated and reported and any gaps in actual data have been filled with either Perse or Anthesis estimated data.
Sustainability Strategy
Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets.
Climate-related Targets
During FY25, the Investment Manager completed a review of the Company's emissions reduction target to evaluate the target baseline, scope and coverage. The Investment Manager found that given the enhancements made to the Company's emissions data and calculation processes within the Company's first full GHG Inventory published in the FY24 Annual Report, the FY24 full year baseline is a more accurate and complete baseline for determining an emissions reduction target.
A workstream was subsequently established to enhance the Company's emissions reduction ambitions by developing targets in line with the Science Based Target initiative's ("SBTi") Building Guidance (near-term and building Net Zero target) and Corporate Guidance (other Scope 3 emissions):
Net-zero
· SOHO commits to achieve net-zero greenhouse gas emissions across the value chain by 2050.
Near-term
· SOHO commits to reduce Scope 3 in-use operational GHG emissions of owned and leased buildings, covering downstream leased assets, 48.5% per m2 (equivalent to a 48.3% absolute reduction) by 2030 from a 2024 base year.*
Long-term
· SOHO commits to reduce Scope 3 in-use operational GHG emissions of owned and leased buildings, covering downstream leased assets, 98.3% per m2 by 2040 from a 2024 base year. SOHO also commits to reduce absolute Scope 3 GHG emissions from purchased goods and services 90.0% by 2050 from a 2024 base year.
The Company submitted refreshed emissions reductions targets (both near term and Net Zero) to SBTi for validation in November 2025, reflecting its commitment to reducing its value chain emissions in line with 1.5°C. The Company's near term and Net Zero targets were approved by the SBTi post-year end, in February 2026.
EPC Upgrade Programme
The Company and its Investment Manager intend to asset manage the portfolio to ensure all properties have an EPC rating of C or above by 2030 to ensure compliance with current legislative targets. For further details on the Company's EPC Upgrade Programme see page 16 of the Sustainability and Impact Committee Report.
*SOHO does not own or financially control any fossil fuel equipment in its buildings portfolio.
Appendix: GHG Inventory Methodology
Emissions were calculated using the Anthesis 'Route Zero' software tool, in alignment with the GHG Protocol.
|
Scope |
Category |
Methodology |
Emission Factors Source |
|
3 |
1. Purchased Goods & Services |
The Environmentally Extended Input Output (EEIO) method, which estimates emissions from expenditure, was used to calculate the emissions from this category. The SOHO team provided spend for the reporting year split by supplier. The suppliers were mapped against the DEFRA Input/Output (IO) categories, which are based on SIC codes and have an associated emission factor. The DEFRA IO emission factors were multiplied by the spend to calculate the emissions. Exclusions include service charge costs and costs that are recharged to tenant in full. |
DEFRA EEIO factors |
|
3 |
2. Capital Goods |
The Environmentally Extended Input Output (EEIO) method, which estimates emissions from expenditure, was used to calculate the emissions from this category. The SOHO team provided spend for the reporting year split by supplier. The suppliers were mapped against the DEFRA Input/Output (IO) categories, which are based on SIC codes and have an associated emission factor. The DEFRA IO emission factors were multiplied by the spend to calculate the emissions. Exclusions include service charge costs and costs that are recharged to tenant in full. |
DEFRA EEIO factors |
|
3 |
6. Business |
This includes the upstream well-to-tank emissions of business travel activities. |
UK Government GHG Conversion Factors for Company Reporting, DESNZ |
|
3 |
13. Downstream leased assets |
Where actual fuel and electricity consumption data was provided, this was used. For any gap filling and estimations, methodology notes are included below: Electricity estimates: Electricity consumption is estimated using actual data from sites with recorded usage. First, electricity consumption and floor area data are collected from sites with available records. This helps calculate electricity intensity, which serves as a benchmark. The benchmark intensity is calculated by dividing electricity consumption by floor area (kWh/m²). This value represents typical electricity usage per square metre. For sites without actual data, the benchmark intensity is multiplied by their floor area to estimate electricity consumption. Natural Gas estimates: Natural gas consumption is estimated using actual data from sites with recorded usage. Natural gas consumption and floor area data are collected from sites with available records. This helps calculate electricity intensity, which serves as a benchmark. The benchmark intensity is calculated by dividing natural gas consumption by floor area (kWh/m²). This value represents typical electricity usage per square metre. For sites without actual data, the benchmark intensity is multiplied by their floor area to estimate natural gas consumption. Waste estimates: Waste consumption is estimated using UK Government data on household waste, number of UK households and average floor area of dwellings. This data was used to create a benchmark, estimating average tonnes of waste per m2. This benchmark was multiplied by property floor area, estimating total waste per lessee. Water estimates: Water consumption is estimated using GRESB benchmarks. The benchmarks consider cubic metre of water per metre squared of floor area (m3/m²). The benchmarks were multiplied by property floor area, to estimate total water usage per lessee. |
UK Government GHG Conversion Factors for Company Reporting, DESNZ |
Group Statement of Comprehensive Income
For the year ended 31 December 2025
|
|
Note |
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Income |
|
|
|
|
Rental income |
5 |
40,743 |
39,072 |
|
Expected credit loss |
5 |
(743) |
(3,329) |
|
Insurance charge income |
5 |
656 |
713 |
|
Insurance charge expense |
5 |
(656) |
(713) |
|
Other income |
5 |
30 |
106 |
|
Total income |
|
40,030 |
35,849 |
|
|
|
|
|
|
Expenses |
|
|
|
|
Directors' remuneration |
6 |
(340) |
(307) |
|
General and administrative expenses |
9 |
(4,006) |
(3,556) |
|
Management fees |
8 |
(3,265) |
(7,814) |
|
Total expenses |
|
(7,611) |
(11,677) |
|
|
|
|
|
|
Loss from fair value adjustment on investment properties |
13 |
(22,053) |
(53,030) |
|
Operating profit/(loss) |
|
10,366 |
(28,858) |
|
|
|
|
|
|
Finance income |
|
297 |
148 |
|
Finance costs |
11 |
(7,670) |
(7,679) |
|
Profit/(loss) for the year before tax |
|
2,993 |
(36,389) |
|
|
|
|
|
|
Taxation |
12 |
- |
- |
|
|
|
|
|
|
Profit/(loss) and total comprehensive income for the year |
|
2,993 |
(36,389) |
|
|
|
|
|
|
IFRS earnings/(loss) per share - basic and diluted |
35 |
0.76p |
(9.25)p |
The accompanying notes form an integral part of these Group Financial Statements.
Group Statement of Financial Position
As at 31 December 2025
|
|
Note |
31 December £'000 |
31 December 2024 £'000 |
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Investment properties |
13 |
602,813 |
624,695 |
|
Trade and other receivables |
14 |
3,038 |
3,306 |
|
Total non-current assets |
|
605,851 |
628,001 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Assets held for sale |
|
1,947 |
- |
|
Trade and other receivables |
15 |
3,562 |
3,315 |
|
Cash, cash equivalents and restricted cash |
16 |
25,414 |
27,492 |
|
Total current assets |
|
30,923 |
30,807 |
|
Total assets |
|
636,774 |
658,808 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
17 |
2,748 |
6,095 |
|
Total current liabilities |
|
2,748 |
6,095 |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Other payables |
18 |
1,532 |
1,528 |
|
Bank and other borrowings |
19 |
261,718 |
261,441 |
|
Total non-current liabilities |
|
263,250 |
262,969 |
|
Total liabilities |
|
265,998 |
269,064 |
|
Total net assets |
|
370,776 |
389,744 |
|
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
21 |
3,940 |
3,940 |
|
Share premium reserve |
22 |
203,753 |
203,753 |
|
Treasury shares reserve |
23 |
(378) |
(378) |
|
Capital redemption reserve |
24 |
93 |
93 |
|
Capital reduction reserve |
24 |
155,359 |
155,359 |
|
Retained earnings |
25 |
8,009 |
26,977 |
|
Total equity |
|
370,776 |
389,744 |
|
|
|
|
|
|
IFRS net asset value per share - basic and diluted |
36 |
94.23p |
99.05p |
The Group Financial Statements were approved and authorised for issue by the Board on 25 March 2026 and signed on its behalf by:
Chris Phillips
Chair
25 March 2026
Group Statement of Changes in Equity
For the year ended 31 December 2025
|
Year ended 31 December 2025 |
Note |
Share capital £'000 |
Share premium reserve £'000 |
Treasury shares reserve £'000 |
Capital redemption reserve £'000 |
Capital reduction reserve £'000 |
Retained earnings £'000 |
Total equity £'000 |
|
Balance at |
|
3,940 |
203,753 |
(378) |
93 |
155,359 |
26,977 |
389,744 |
|
Profit and total comprehensive income for the year |
|
- |
- |
- |
- |
- |
2,993 |
2,993 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Dividends paid |
26 |
- |
- |
- |
- |
- |
(21,961) |
(21,961) |
|
Balance at |
|
3,940 |
203,753 |
(378) |
93 |
155,359 |
8,009 |
370,776 |
|
Year ended 31 December 2024 |
Note |
Share capital £'000 |
Share premium reserve £'000 |
Treasury shares reserve £'000 |
Capital redemption reserve £'000 |
Capital reduction reserve £'000 |
Retained earnings £'000 |
Total equity £'000 |
|
Balance at |
|
3,940 |
203,753 |
(378) |
93 |
155,359 |
84,850 |
447,617 |
|
Loss and total comprehensive income for the year |
|
- |
- |
- |
- |
- |
(36,389) |
(36,389) |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Dividends paid |
26 |
- |
- |
- |
- |
- |
(21,484) |
(21,484) |
|
Balance at |
|
3,940 |
203,753 |
(378) |
93 |
155,359 |
26,977 |
389,744 |
The accompanying notes form an integral part of these Group Financial Statements.
Group Statement of Cash Flows
For the year ended 31 December 2025
|
|
Note |
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Cash flows from operating activities |
|
|
|
|
Profit/(loss) before tax |
|
2,993 |
(36,389) |
|
Adjustments for: |
|
|
|
|
Expected credit loss |
|
743 |
3,329 |
|
Loss from fair value adjustment on investment properties |
|
22,053 |
53,030 |
|
Finance income |
|
(297) |
(148) |
|
Finance costs |
|
7,670 |
7,679 |
|
Operating results before working capital changes |
|
33,162 |
27,501 |
|
|
|
|
|
|
Increase in trade and other receivables |
|
(986) |
(1,853) |
|
(Decrease)/increase in trade and other payables |
|
(3,241) |
3,421 |
|
Net cash generated from operating activities |
|
28,935 |
29,069 |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Capital expenditure on investment properties |
|
(2,306) |
(2,271) |
|
Proceeds from sale of assets |
|
350 |
- |
|
Restricted cash movement |
|
166 |
(155) |
|
Interest received |
|
253 |
103 |
|
Net cash used in investing activities |
|
(1,537) |
(2,323) |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Interest paid |
|
(7,349) |
(7,348) |
|
Loan arrangement fees paid |
19 |
- |
(29) |
|
Dividends paid |
26 |
(21,961) |
(21,484) |
|
Net cash used in financing activities |
|
(29,310) |
(28,861) |
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
(1,912) |
(2,115) |
|
Cash and cash equivalents at the beginning of the year |
|
23,289 |
25,404 |
|
Cash and cash equivalents at the end of the year |
16 |
21,377 |
23,289 |
The accompanying notes form an integral part of these Group Financial Statements.
NOTES TO THE GROUP FINANCIAL STATEMENTS
For the year ended 31 December 2025
1. Corporate Information
Social Housing REIT plc (the "Company") is a Real Estate Investment Trust ("REIT") incorporated in England and Wales under the Companies Act 2006 as a public company limited by shares on 12 June 2017. The address of the registered office is The Scalpel 18th Floor, 52 Lime Street, United Kingdom, EC3M 7AF. The Company is registered as an investment company under section 833 of the Companies Act 2006 and is domiciled in the United Kingdom.
The principal activity of the Company and its subsidiaries (the "Group") is to provide shareholders with an attractive level of income, together with the potential for capital growth from investing in a portfolio of social homes.
2. Basis of Preparation
The financial information contained in this results announcement has been prepared on the basis of the accounting policies set out in the statutory financial statements for the year ended 31 December 2025 which are consistent with policies those adopted in the year ended 31 December 2024. Whilst the financial information included in this announcement has been computed in accordance with UK adopted international accounting standards, this announcement does not itself contain sufficient disclosures to comply with IFRS. The financial information does not constitute the Group's statutory financial statements for the years ended 31 December 2025 or 31 December 2024, but is derived from those financial statements. Financial statements for the year ended 31 December 2024 have been delivered to the Registrar of Companies and those for the year ended 31 December 2025 will be delivered following the Company's Annual General Meeting. The auditors' reports on both the 31 December 2025 and 31 December 2024 financial statements were unqualified; did not draw attention to any matters by way of emphasis; and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.
The financial statements of the Group have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. All accounting policies have been applied consistently.
The Group's Financial Statements have been prepared on a historical cost basis, as modified for the Group's investment properties, which have been measured at fair value. Gains or losses arising from changes in fair values are included in profit or loss.
The preparation of financial statements in compliance with UK-adopted International Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Group's accounting policies. The areas where significant judgments and estimates have been made in preparing these financial statements and their effect are disclosed in note 3.
2.1. Going Concern
The Group benefits from a secure income stream from long leases which are not overly reliant on any one tenant and present a well-diversified risk. The Directors have reviewed the Group's forecast which shows the expected annualised rental income exceeds the expected operating and financing costs of the Group. 91.5% of rental income due and payable for the year ended 31 December 2025 has been collected, rent arrears are predominantly attributable to two Approved Providers, My Space Housing Solutions and Portus Supported Housing Limited (formerly Westmoreland Supported Housing Ltd).
The Directors believe that the Group is still well placed to manage its financing and other business risks and that the Group will remain viable, continuing to operate and meet its liabilities as they fall due.
The Directors have performed an assessment of the ability of the Group to continue as a going concern, for the period up to 30 June 2027. The Directors have considered the expected obligations of the Group during this period and are confident that all will be met.
The Directors have also considered the financing provided to the Group. Norland Estates Limited and TP REIT Propco 2 Limited have bank facilities with MetLife and MetLife and Barings respectively.
The loans secured by Norland Estates Limited and TP REIT Propco 2 Limited are subject to asset cover ratio covenants and interest cover ratio covenants which can be found in the table below. The Directors have also considered reverse stress testing and the circumstances that would lead to a covenant breach. Given the level of headroom, the Directors are of the view that the risk of scenarios materialising that would lead to a breach of the covenants is remote. The Group has adhered to all these covenants throughout the year and is also expected to comfortably meet these covenants over the next 12 months.
|
|
Norland Estates Limited |
TP REIT Propco 2 Limited |
|
Asset Cover (ACR) |
|
|
|
Asset Cover Ratio Covenant |
x2.00 |
x1.67 |
|
Asset Cover Ratio 31 December 2025 |
x2.39 |
x1.96 |
|
Blended Net initial yield |
7.03% |
6.40% |
|
Headroom (yield movement) |
128bps |
104bps |
|
Interest Cover (ICR) |
|
|
|
Interest Cover Ratio Covenant |
1.75x |
1.75x |
|
Interest Cover Ratio 31 December 2025 |
4.89x |
4.82x |
|
Headroom (rental income movement) |
64% |
61% |
Under the downside model the forecasts have been stressed to show the effect of some lessees ceasing to pay their voids liability, and as a result this causes Approved Providers to default under some of the Group leases. The assumptions for the amount of rent paid by two Approved Providers have been sensitised. Under the downside model the Group will be able to settle its liabilities for the period to 30 June 2027. As a result of the above, the Directors are of the opinion that the going concern basis adopted in the preparation of the financial statements is appropriate.
The Group has no short or medium-term refinancing risk given the 7.6-year weighted average maturity of its long-term debt facilities with MetLife and Barings, the first of which expires in June 2028, and which are fully fixed at an all-in weighted average rate of 2.74%.
Having reviewed and considered the forecasts prepared, the Directors consider that the Group has adequate resources in place and will be able to settle its liabilities for a period of at least 12 months from the date of signing these financial statements and have therefore adopted the going concern basis of accounting in preparing these financial statements.
2.2. Currency
The Group financial information is presented in Sterling which is also the Group's functional currency.
3. Significant Accounting Judgements, Estimates and Assumptions
In the application of the Group's accounting policies, which are described in note 4, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions that have a significant risk of causing a material adjustment to the carrying amounts of related assets and liabilities within the next financial year are outlined below:
Estimates:
3.1. Investment properties
The Group uses the valuation carried out by its independent valuers as the fair value of its property portfolio. The valuation is based upon assumptions including future rental income and the appropriate discount rate. The valuers also refer to market evidence of transaction prices for similar properties. Further information is provided in note 13.
The Group's properties have been independently valued by Jones Lang LaSalle Limited ("JLL" or the "Valuer") in accordance with the definitions published by the Royal Institute of Chartered Surveyors' ("RICS") Valuation - Global Standards (commonly known as the "Red Book"). JLL is one of the most recognised professional firms within social housing valuation and has sufficient current local and national knowledge of both social housing in general and Specialist Supported Housing and has the skills and understanding to undertake the valuations competently.
With respect to the Group's Financial Statements, investment properties are valued at their fair value at each Statement of Financial Position date in accordance with IFRS 13 which recognises a variety of fair value inputs depending upon the nature of the investment. Given the bespoke nature of each of the Group's investments, all of the Group's investment properties are included in Level 3 with the inputs included in note 13.
Level 1 - Unadjusted, quoted prices for identical assets and liabilities in active (typically quoted) markets;
Level 2 - Quoted prices for similar assets and liabilities in active markets; and
Level 3 - External inputs are "unobservable". Value is the Director's best estimate, based on advice from relevant knowledgeable experts, use of recognised valuation techniques and a determination of which assumptions should be applied in valuing such assets and with particular focus on the specific attributes of the investments themselves.
3.2. Expected Credit Losses (ECL)
The Group recognised an additional ECL provision of £743,000 in the current year (2024: £3,329,000). The prior year provision was subsequently fully written off after My Space entered into a CVA during March 2025 resulting in a total ECL provision of nil as at 31 December 2025 (31 December 2024: £8,021,000). A default probability for each of the Approved Providers, representing the estimated percentage likelihood of them paying outstanding rent due at year end, was determined based on their latest known financial position and any repayment plans that had been agreed or discussed. For each provider the estimated probability percentage of receiving unpaid rent has been multiplied by the rental and recharge arrears as at the statement of financial position date. The figure has been aggregated to arrive at the ECL provision.
Judgements:
3.3. Leases incentive debtor
The lease incentive debtor recognised from rent smoothing adjustments are not considered to be financial assets as the amounts are not yet contractually due, although the credit risk is considered in the determination of the fair value of the related property. As such, the requirements of IFRS 9 (including the expected credit loss method) are not applied to these balances. The credit risk associated with each tenant is considered in the determination of the fair value of the related property. In the current year, the expense recognised in respect of such rent smoothing amounted to £108,000 (2024: £1,018,000 income, before the impact of the £1,984,000 written off in respect of the Parasol leases which were reassigned during 2024) which is primarily driven by the lower number of properties in current rent-free periods compared with the prior year.
4. Summary of Material Accounting Policies
4.1. Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially measured at cost, being the fair value of the consideration given, including expenditure that is directly attributable to the acquisition of the investment property. The Group recognises asset acquisitions on legal completion. After initial recognition, investment property is stated at its fair value at the Statement of Financial Position date. Gains and losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise in the Statement of Comprehensive Income. Subsequent expenditure is capitalised only when it is probable that future economic benefits are associated with the expenditure.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected to be obtained from the disposal. Any gain or loss arising on de-recognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recorded in profit or loss in the period in which the property is derecognised.
Significant accounting judgements, estimates and assumptions made for the valuation of investment properties are discussed in note 3.
4.2. Leases
Lessor
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Group has determined that it retains all the significant risks and rewards of ownership of the properties it has acquired to date and accounts for the contracts as operating leases.
Properties leased out under operating leases are included in investment properties in the Statement of Financial Position. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant leases. Tenant lease incentives are not subject to expected credit loss provision under IFRS 9 as the Group does not have unconditional right to collect cash flows relating to these assets but do impact the carrying amounts of the related investment properties as at the statement of financial position date. Therefore, a lease incentive debtor is recognised based on the smoothing of rent-free periods granted such that the rental income from operating leases is recognised on a straight-line basis over the lease term.
Lessee
As a lessee the Group recognises a right-of-use asset within investment properties and a lease liability for all leases, which is included within other payables (notes 17 and 18). The lease liabilities are measured at the present value of the remaining lease payments, discounted using an appropriate discount rate at inception of the lease or on initial recognition. The discount rate applied by the Group is the incremental borrowing rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made.
As leasehold properties meet the definition of investment property, the right-of-use assets are presented within investment properties (note 13), and after initial recognition are subsequently measured at fair value.
Sub-leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the underlying property asset to the lessee. Sub-leases of leasehold properties are classified with reference to the right-of-use asset arising from the head lease. All other leases are classified as operating leases.
4.3. Rent and other receivables
Rent and other receivables are amounts due in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets.
Rent receivables are initially recognised at fair value plus transaction costs and are subsequently carried at amortised cost, less provision for impairment.
Impairment provisions for current and non-current rent receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the rent receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the rent receivables. Rent receivables are reported net of the ECL provision and the movement in the provision is recognised in the Group statement of comprehensive income. On confirmation that the rent receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Impairment provisions for all other receivables are recognised based on a forward-looking expected credit loss model using the general approach. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, 12 month expected credit losses along with gross interest income are recognised. For those which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
Under pass-through arrangements, rental income is collected by an Approved Provider ("AP") on behalf of the Group. The AP deducts agreed management fees and property-related costs and remits the remaining balance to the Group. The Group recognises rental income as the amount received from the RP, being the RP gross rental income less the costs deducted under the arrangement.
When My Space entered into a Company Voluntary Arrangement (CVA), all outstanding receivable balances had already been fully provided for within the expected credit loss (ECL) provision as at February 2025, with the exception of a small balance arising due to timing differences. Accordingly, all amounts, including this residual balance, were written off against the existing provision, resulting in the customer debtor balance and any outstanding arrears being reduced to nil.
4.4. Bank and other borrowings
Bank borrowings and the Group's loan notes are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensure that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the Group Statement of Financial Position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payment while the liability is outstanding.
4.5. Taxation
Taxation on the element of the profit or loss for the period that is not exempt under UK REIT regulations would be comprised of current and deferred tax. Tax is recognised in the Statement of Comprehensive Income except to the extent that it relates to items recognised as direct movement in equity, in which case it is recognised as a direct movement in equity. Current tax is the expected tax payable on any non-REIT taxable income for the period, using tax rates enacted or substantively enacted at the Statement of Financial Position date, and any adjustment to tax payable in respect of previous periods.
4.6. Dividends payable to shareholders
Dividends are recognised when they become legally payable. Interim dividends are recognised when paid. In the case of final dividends, this is when approved by the shareholders at the Annual General Meeting.
4.7. Rental income
Rental income from investment property is recognised on a straight-line basis over the term of ongoing leases and is shown gross of any UK income tax. Tenant lease incentives are recognised as a reduction of rental revenue on a straight-line basis over the term of the lease and are not subjected to an expected credit loss provision under IFRS 9. These are recognised within trade and other receivables on the Statement of Financial Position.
Lease modifications are accounted for as a new lease from the effective date of modification. On entering into a lease modification any initial direct costs associated with the original lease are derecognised through profit or loss in the year.
Rent reviews are recognised from the date when such reviews have been agreed and finalised with tenants. For rent reviews with rental uplifts linked to the inflation index, the rental increases are recognised as income in the period to which they relate, as they are deemed to be variable lease payments intended to compensate for inflationary cost increases.
When the Group enters into a forward funded transaction, the future tenant signs an agreement for lease. No rental income is recognised under the agreement for lease, but once the practical completion has taken place the formal lease is signed at which point rental income commences to be recognised in the Statement of Comprehensive Income.
Under IFRS 15, the Group's revenue from contracts with customers includes insurance charge income which is recognised over the period the respective services are provided.
4.8. Finance income and finance costs
Finance income is recognised as interest accrues on cash balances held by the Group. Finance costs consist of interest and other costs that the Group incurs in connection with bank and other borrowings. These costs are expensed in the period in which they occur. Borrowing costs are capitalised, net of interest received on cash drawn down yet to be expended when they are directly attributable to the acquisition, contribution or production of an asset that necessarily takes a substantial period of time to get ready for its intended use.
4.9. Investment management fees
Investment management fees are recognised in the Statement of Comprehensive Income on an accrual basis.
4.10. Treasury shares
Consideration paid or received for the purchase or sale of treasury shares is recognised directly in equity. The cost of treasury shares held is presented as a separate reserve (the "treasury share reserve"). Any excess of the consideration received on the sale of treasury shares over the weighted average cost of the shares sold is credited to share premium.
5. Rental and other Income
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Rental income - freehold assets |
38,498 |
36,709 |
|
Rental income - leasehold assets |
2,245 |
2,363 |
|
|
40,743 |
39,072 |
|
Expected credit loss |
(743) |
(3,329) |
|
Insurance charge income |
656 |
713 |
|
Insurance charge expense |
(656) |
(713) |
|
Other income |
30 |
106 |
|
|
40,030 |
35,849 |
The lease agreements between the Group and the Approved Providers are fully repairing and insuring leases. The Approved Providers are responsible for the settlement of all present and future rates, taxes, costs and other impositions payable in respect of the properties. As a result, no direct property expenses were incurred.
All rental income arose within the United Kingdom.
The expected loss rates are based on the Group's credit losses which started to occur during the year ended 31 December 2022 for the first time since IPO expected loss rates are then adjusted for current and forward-looking information affecting the Group's tenants. The expected credit loss for the current year relates mostly to one tenant (2024: one tenant). Following the filing of the CVA in March 2025, no further expected credit loss has been recognised as the rent becomes variable in nature.
The movement in the expected credit loss provision during the year has been set out below:
An Approved Provider (AP) is a housing association, Local Authority or other regulated organisation in receipt of direct payment from local government including a care provider.
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Opening expected credit loss provision |
(8,021) |
(6,666) |
|
Increase in provision for My Space Housing |
(705) |
(3,329) |
|
Increase in provision for all other APs |
(38) |
- |
|
Write off of Parasol debtor |
- |
1,974 |
|
Write off of My Space Housing debtor on CVA |
8,726 |
- |
|
Write off of other AP's debtor |
38 |
- |
|
Closing expected credit loss provision |
- |
(8,021) |
6. Directors' Remuneration
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Directors' fees |
301 |
275 |
|
Employer's National Insurance Contributions |
39 |
32 |
|
|
340 |
307 |
The Directors are remunerated for their services at such rate as the Directors shall from time to time determine. The Chairman receives a director's fee of £75,000 per annum (2024: £75,000), and the other Directors of the Board receive a fee of £50,000 per annum (2024: £50,000). The Directors are also entitled to an additional fee of £7,500 in connection with the production of every prospectus by the Company. No additional fees were paid during 2025 or 2024. A summary of the Directors' emoluments, including the disclosures required by the Companies Act 2006, is set out in the Directors' Remuneration Report within the Corporate Governance Report. None of the Directors received any advances or credits from any Group entity during the year.
7. Particulars of Employees
The Group and Company had no employees during the year other than the Directors (2024: none).
8. Management Fees
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Management fees |
3,265 |
4,651 |
|
Termination fees |
- |
3,163 |
|
|
3,265 |
7,814 |
On 1 January 2025 Atrato Partners Limited ("Atrato") was appointed as the Investment Manager of the Company.
The management fee is calculated quarterly, in arrears, as a percentage of the Company's average market capitalisation at the end of each quarter. The Management Fee will be calculated using the following fee thresholds and rates:
|
Market capitalisation threshold |
Relevant fee rate (per annum) |
|
Up to and including £150 million |
1.25% (equivalent to 0.3125% per quarter) |
|
Above £150 million, up to and including £300 million |
1.00% (equivalent to 0.25% per quarter) |
|
Above £300 million |
0.70% (equivalent to 0.175% per quarter) |
The management fee relating to 2024 was paid while the fund was managed by Triple Point Investment Management LLP (TPIM), the previous Investment Manager, and was calculated quarterly in arrears based upon a percentage of the last published Net Asset Value of the Group (not taking into account uncommitted cash balances after deducting borrowings) as at 31 March, 30 June, 30 September and 31 December in each year on the following basis with effect from Admission:
· on that part of the Net Asset Value up to and including £250 million, an amount equal to 1.0% of such part of the Net Asset Value;
· on that part of the Net Asset Value over £250 million and up to and including £500 million, an amount equal to 0.9% of such part of the Net Asset Value;
· on that part of the Net Asset Value over £500 million and up to and including £1 billion, an amount equal to 0.8% of such part of the Net Asset Value; and
· on that part of the Net Asset Value over £1 billion, an amount equal to 0.7% of such part of the Net Asset Value.
Management fees of £3,265,000 (2024: £4,651,000 chargeable by TPIM) were chargeable by Atrato during the year. At the year-end £835,972 was due to Atrato (2024: £1,151,000 was due to TPIM), the amount was settled in early January 2026.
The terms of both the Investment Management Agreement and the AIFM Agreement between the Company and TPIM provided for a termination period of 12 months. An agreement was reached to terminate both the contracts with effect from 31 December 2024 and to pay early termination fees. These fees totalled £3,343,000 (£3,163,000 in respect of Investment Management and £180,000 in respect of the AIFM) and was structured in two tranches. This was in addition to the regular quarterly fees.
The AIFM termination fee of nil (2024: £180,000) is included within General and Administrative expenses as set out in note 9.
9. General and Administrative Expenses
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Property costs |
1,391 |
148 |
|
Legal and professional fees |
1,076 |
1,356 |
|
Audit fees |
472 |
429 |
|
Marketing costs |
437 |
471 |
|
Administration and secretarial fees |
413 |
319 |
|
Other administrative expenses |
177 |
149 |
|
Lease transfer costs |
40 |
271 |
|
AIFM fees |
- |
233 |
|
AIFM termination fees |
- |
180 |
|
|
4,006 |
3,556 |
On 1 October 2019 Hanway Advisory Limited were appointed to provide Administration and Company Secretarial Services to the Group. On 23 September 2025, Hanway Advisory Limited ceased to act as administrator and was replaced by Atrato. Administration and company secretarial fees of £413,000 (2024: £319,000) were incurred during the year, comprising fees payable to Hanway Advisory Limited for both Administration and company secretarial fees up to 23 September 2025. After this date Atrato replaced Hanway as the Administrator, while Hanway Advisory Limited, continued to provide company secretarial services.
The audit fees in the table above are inclusive of VAT, and differ to the fees in note 10 which are reported net
of VAT.
On 30 June 2020, TPIM was appointed as the Group's Alternative Investment Fund Manager ("AIFM") to perform certain functions for the Group. As described in note 8, following the change in investment manager and the appointment of Atrato as the Group's new investment manager, TPIM ceased to act as AIFM. Accordingly, no AIFM fees were incurred in the current year.
10. Audit Fees
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Group audit fees - current year |
309 |
280 |
|
Subsidiary audit fees |
38 |
34 |
|
|
347 |
314 |
Non-audit fees paid to BDO LLP amounted to £45,500 (2024: £42,500) for the half-year interim review.
The audit fee for all subsidiaries have been borne by the Company (see note 31).
11. Finance Costs
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Interest payable on bank borrowings |
7,217 |
7,217 |
|
Amortisation of loan arrangement fees |
277 |
287 |
|
Lender valuation fees |
121 |
121 |
|
Head lease interest expense |
44 |
44 |
|
Bank charges |
11 |
10 |
|
|
7,670 |
7,679 |
|
Total finance cost for financial liabilities not measured at fair value through profit or loss |
7,659 |
7,669 |
Under the terms of the debt facilities the lenders require an annual independent valuation to be undertaken at the Company's expense. The cost of these valuations is set out above.
12. Taxation
As a UK REIT, the Group is exempt from corporation tax on the profits and gains from its property investment business, provided it meets certain conditions as set out in the UK REIT regulations. For the year ended 31 December 2025, the Group did not have any non-qualifying profits and accordingly there is no tax charge in the period. If there were any non-qualifying profits and gains, these would be subject to corporation tax. It is assumed that the Group will continue to be a group UK REIT for the foreseeable future, such that deferred tax has not been recognised on temporary differences relating to the property rental business.
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Current tax |
|
|
|
Corporation tax charge for the year |
- |
- |
|
Total current income tax charge in the profit or loss |
- |
- |
The tax charge for the year is less than the standard rate of corporation tax in the UK of 25% (2024: 25%). The differences are explained below.
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Profit/(loss) for the year before tax |
2,993 |
(36,389) |
|
|
|
|
|
Tax at UK corporation tax standard rate of 25% |
748 |
(9,098) |
|
Change in value of investment properties |
5,447 |
13,258 |
|
Disposal of investment property |
66 |
- |
|
Exempt REIT income |
(6,704) |
(5,194) |
|
Amounts not deductible for tax purposes |
27 |
35 |
|
Unutilised residual current year tax losses |
416 |
999 |
|
|
- |
- |
UK REIT exempt income includes property rental income that is exempt from UK Corporation Tax in accordance with Part 12 of CTA 2010.
13. Investment Property
|
|
Operational assets £'000 |
|
As at 1 January 2025 |
624,695 |
|
|
|
|
Acquisitions and additions* |
2,200 |
|
Fair value adjustment*** |
(21,789) |
|
Disposals |
(350) |
|
Transferred to Assets Held for Sale** |
(1,947) |
|
Movement in head lease ground rent liability |
4 |
|
As at 31 December 2025 |
602,813 |
|
|
|
|
As at 1 January 2024 |
675,497 |
|
|
|
|
Acquisitions and additions* |
2,221 |
|
Fair value adjustment |
(53,027) |
|
Movement in head lease ground rent liability |
4 |
|
As at 31 December 2024 |
624,695 |
* Additions in the table above differs to the total capital expenditure amount in the Group statement of cash flows due to retentions no longer payable which were credited to Investment Property additions.
** 3 assets with fair value of £1,947,000 were reclassified to assets held for sale during the year ended 31 December 2025.
*** The difference between the loss from fair value adjustment on investment properties presented in the Statement of Comprehensive Income and Statement of Cash Flows compared to note 13 is £264,000. This relates to the lease incentive balances associated with
36 Oxford Grove and 38 Oxford Grove, which were sold during the period.
Reconciliation to the Group Statement of Comprehensive Income ("SOCI"):
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Fair value adjustment in note 13 |
(21,789) |
(53,027) |
|
Loss from fair value adjustments on assets held for sale |
- |
(3) |
|
Loss on disposal of investment properties |
(264) |
- |
|
Loss from fair value adjustments in SOCI |
(22,053) |
(53,030) |
The £264,000 loss on disposal of investment properties relates to the write-off of a lease incentive debtor associated with properties disposed of during the year.
Reconciliation to independent valuation:
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Investment property valuation |
606,275 |
626,351 |
|
Fair value adjustment - headlease ground rent |
1,472 |
1,468 |
|
Fair value adjustment - lease incentive debtor |
(2,987) |
(3,124) |
|
Transferred to Assets Held for Sale |
(1,947) |
- |
|
|
602,813 |
624,695 |
The carrying value of leasehold properties at 31 December 2025 was £34,342,000 (2024: £35,934,000).
In accordance with "IAS 40: Investment Property", the Group's investment properties have been independently valued at fair value by Jones Lang LaSalle Limited ("JLL"), an accredited external valuer with recognised and relevant professional qualifications. The independent valuers provide their fair value of the Group's investment property portfolio on a semi-annual basis.
JLL were appointed as external valuers by the Board on 11 December 2017. JLL has provided valuations services to the Group. The proportion of the total fees payable by the Company to JLL's total fee income is minimal. Additionally, JLL has a rotation policy in place whereby the signatories on the valuations rotate after five years.
% Key Statistic
The metrics below are in relation to the total investment property portfolio held as at 31 December 2025.
|
Portfolio metrics |
31 December 2025 |
31 December 2024 |
|
Capital Deployed (£'000)* |
577,402 |
576,804 |
|
Number of Properties |
492 |
494 |
|
Number of Tenancies*** |
389 |
391 |
|
Number of Registered Providers*** |
27 |
28 |
|
Number of Local Authorities*** |
151 |
148 |
|
Number of Care Providers*** |
115 |
109 |
|
Valuation Net Initial Yield (NIY)** |
6.42% |
6.22% |
* calculated excluding acquisition costs.
** calculated using IAS 40 valuations (excluding forward funding acquisitions).
*** calculated excluding forward funding acquisitions.
|
|
31 December 2025 |
31 December 2024 |
||
|
Region |
*Cost £'000 |
% of funds invested |
*Cost £'000 |
% of funds invested |
|
North West |
112,689 |
19.5 |
111,206 |
19.3 |
|
West Midlands |
93,221 |
16.1 |
93,006 |
16.1 |
|
Yorkshire |
81,839 |
14.2 |
87,103 |
15.1 |
|
East Midlands |
69,323 |
12.0 |
63,979 |
11.1 |
|
North East |
56,913 |
9.9 |
56,653 |
9.8 |
|
South East |
54,889 |
9.5 |
54,366 |
9.4 |
|
London |
49,717 |
8.6 |
49,626 |
8.6 |
|
South West |
26,548 |
4.6 |
28,099 |
4.9 |
|
East |
23,703 |
4.1 |
24,206 |
4.2 |
|
Scotland |
5,900 |
1.0 |
5,900 |
1.0 |
|
Wales |
2,660 |
0.5 |
2,660 |
0.5 |
|
Total |
577,402 |
100.00 |
576,804 |
100.0 |
* excluding acquisition costs
Fair value hierarchy
|
|
Date of valuation |
Total £'000 |
Quoted prices in active markets £'000 |
Significant observable inputs (Level 2) £'000 |
Significant unobservable inputs (Level 3) £'000 |
|
Assets measured at fair value: |
|
|
|
|
|
|
Investment properties |
31 December 2025 |
602,813 |
- |
- |
602,813 |
|
Investment properties |
31 December 2024 |
624,695 |
- |
- |
624,695 |
There have been no transfers between Level 1 and Level 2 during the year, nor have there been any transfers between Level 2 and Level 3 during the year.
The valuations have been prepared in accordance with the RICS Valuation - Global Standards (commonly known as the "Red Book") by JLL, one of the leading professional firms engaged in the social housing sector.
As noted previously, all of the Group's investment properties are reported as Level 3 in accordance with IFRS 13 where external inputs are "unobservable" and value is the Directors' best estimate, based upon advice from relevant knowledgeable experts.
In this instance, the determination of the fair value of an investment property requires an examination of the specific merits of each property that are in turn considered pertinent to the valuation.
These include i) the regulated social housing sector and demand for the facilities offered by each Specialised Supported Housing property owned by the Group; ii) the particular structure of the Group's transactions where lessees at their own expense, meet the majority of the refurbishment costs of each property and certain purchase costs; iii) detailed financial analysis with discount rates supporting the carrying value of each property; iv) underlying rents for each property being subject to independent benchmarking and adjustment where the Group considers them too high (resulting in a price reduction for the purchase or withdrawal from the transaction); and v) a full repairing and insuring lease with annual indexation based on CPI or CPI+1% and effectively 25 years outstanding, in most cases with a Registered Provider itself regulated by the Regulator of Social Housing.
Descriptions and definitions relating to valuation techniques and key unobservable inputs made in determining fair values are as follows:
Valuation techniques: Discounted cash flows
The discounted cash flow model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate and lease incentive costs such as rent-free periods. The expected net cash flows are then discounted using risk-adjusted discount rates.
There are three main unobservable inputs that determine the fair value of the Group's investment property:
1. the rate of inflation as measured by CPI; it should be noted that all leases benefit from either CPI or RPI indexation;
2. the passing rent or estimated rental value ("ERV") as applicable based on market conditions prevailing at the valuation date; and
3. the discount rate applied to the rental flows.
Key factors in determining the discount rates to assess the level of uncertainty applied include: the performance of the regulated social housing sector and demand for each Specialised Supported Housing property owned by the Group; costs of acquisition and refurbishment of each property; the anticipated future underlying cash flows for each property; benchmarking of each underlying rent for each property (passing rent); and the fact that all of the Group's properties have the benefit of full repairing and insuring leases entered into by a Housing Association.
A decrease in passing rent or ERV would decrease the fair value. A decrease in discount rate would increase the fair value. The fair value measurement is based on the above items highest and best use, which does not differ from their actual use. The valuer also considers the resulting net initial yield for each property for appropriateness.
Sensitivities of measurement of significant unobservable inputs
As set out within the significant accounting estimates and judgements in note 3, the Group's property portfolio valuation is open to judgements and is inherently subjective by nature.
As a result, the following sensitivity analysis has been prepared:
Average discount rate, rental values and range:
|
|
2025 |
2024 |
|
Range of discount rates |
6.3%-10.7% |
6.4%-10.4% |
|
Average discount rate |
7.7% |
7.6% |
|
Range of Rental values (passing rents or ERV as relevant) of Group's Investment Properties |
£0.008m - £0.56m |
£0.007m - £0.55m |
|
Average of Rental values (passing rents or ERV as relevant) of Group's Investment Properties |
£0.1m |
£0.1m |
|
CPI/RPI increase over the term of the relevant leases |
2.0%/2.5% |
2.0%/2.5% |
The tables below analyse the sensitivity on the fair value of investment properties for changes in discount rates and inflation rates. As a result of the indexation within the leases the inflation sensitivity captures the impact of changes to rental values.
|
|
-1.0% change in Discount Rate £'000 |
+1.0% change in Discount Rate £'000 |
+0.5% change in CPI £'000 |
-0.5% change in CPI £'000 |
+3% change in ERV £'000 |
-3% change in ERV £'000 |
|
Changes in the IFRS fair value of investment properties |
|
|
|
|
|
|
|
As at 31 December 2025 |
64,308 |
(54,751) |
33,264 |
(30,968) |
17,922 |
(17,392) |
|
|
-0.5% change in Discount Rate £'000 |
+0.5% change in Discount Rate £'000 |
+0.5% change in CPI £'000 |
-0.5% change in CPI £'000 |
+3% change in ERV £'000 |
-3% change in ERV £'000 |
|
Changes in the IFRS fair value of investment properties |
|
|
|
|
|
|
|
As at 31 December 2024 |
70,645 |
(59,690) |
36,318 |
(33,639) |
18,653 |
(18,106) |
The valuations have not been influenced by climate related factors due to there being little measurable impact on inputs at present.
Valuations have weakened generally, reflecting:
1. achieved market pricing for transactions which have occurred or are reasonably expected to occur for opportunities currently being marketed.
2. A softening of valuation assumptions relating to properties with challenging lessee situations within the portfolio, reflecting updated expectations on rent collection and longer-term achievable rent levels.
3. Adjustment of expectations regarding a number of assets, moving towards vacant possession value.
14. Trade and other Receivables (non-current)
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Lease incentive debtor |
2,743 |
3,156 |
|
Other receivables |
295 |
150 |
|
|
3,038 |
3,306 |
The Directors consider that the carrying value of trade and other receivables approximate their fair value. All amounts are due to be received in more than one year from the reporting date.
15. Trade and other Receivables (current)
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Rent receivable |
2,837 |
2,667 |
|
Lease incentive debtor |
244 |
202 |
|
Prepayments |
175 |
164 |
|
Other receivables |
306 |
282 |
|
|
3,562 |
3,315 |
The Directors consider that the carrying value of trade and other receivables approximate their fair value. All amounts are due to be received within one year from the reporting date.
The Group applies the general approach to providing for expected credit losses under IFRS 9 for rent and other receivables. Where the credit loss relates to revenue already recognised in the Statement of Comprehensive Income, the expected credit loss allowance is recognised in the Statement of Comprehensive Income. Expected credit losses totalling £743,000 (31 December 2024: £3,329,000) were charged to the Statement of Comprehensive Income in the period. The expected credit loss in the period relates mostly to the unpaid rent from My Space up to the date of the CVA.
16. Cash, Cash Equivalents and Restricted Cash
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Cash at bank |
13,356 |
23,289 |
|
Restricted cash |
4,037 |
4,203 |
|
Cash Held by Lawyers |
21 |
- |
|
Liquidity Funds |
8,000 |
- |
|
|
25,414 |
27,492 |
Restricted cash represents monies held in escrow in relation to the transfer of leases to be used for future costs. Liquidity funds consist of surplus cash deposited with Treasury Spring in multiple accounts, all of which have maturities of up to one month. This arrangement was implemented to achieve improved interest returns on available cash.
A prior year adjustment has been made to reclassify the Debt Service Reserve Accounts ("DSRA") from "Cash at bank" to "Restricted cash". This reclassification reflects the fact that the DSRA balances are not available for general operational use. The adjustment has no impact on total cash balances previously reported, nor on the Statement of Comprehensive Income, but results in a revised presentation within the note to more appropriately reflect the nature of these funds.
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Total Cash, cash equivalents and restricted cash |
25,414 |
27,492 |
|
Restricted cash |
(4,037) |
(4,203) |
|
Cash reported on Group Statement of Cash Flows |
21,377 |
23,289 |
17. Trade and Other Payables
Current liabilities
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Trade payables |
1,179 |
139 |
|
Accruals |
986 |
5,522 |
|
Head lease ground rent (note 27) |
40 |
40 |
|
Other creditors |
543 |
394 |
|
|
2,748 |
6,095 |
The Other Creditors balance consists of retentions due on completion of outstanding works and outstanding accrued acquisition costs. The Directors consider that the carrying value of trade and other payables approximate their fair value. All amounts are due for payment within one year from the reporting date.
18. Other Payables
Non-current liabilities
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Head lease ground rent (note 27) |
1,432 |
1,428 |
|
Rent deposit |
100 |
100 |
|
|
1,532 |
1,528 |
19. Bank and other Borrowings
Non-current liabilities
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Bank and other borrowings drawn at year end |
263,500 |
263,500 |
|
Unamortised costs at beginning of the year |
(2,059) |
(2,317) |
|
Less: loan issue costs incurred |
- |
(29) |
|
Add: loan issue costs amortised |
277 |
287 |
|
Unamortised costs at end of the year |
(1,782) |
(2,059) |
|
Balance at year end |
261,718 |
261,441 |
At 31 December 2025 there were undrawn bank facilities of £NIL (2024: £NIL).
As at 31 December 2025, the Group's borrowings comprised two debt facilities:
· a long dated, fixed rate, interest only financing arrangement in the form of a private placement of loan notes in an amount of £68,500,000 with MetLife Investment Management (and affiliated funds); and
· £195,000,000 long dated, fixed rate, interest only sustainability-linked loan notes through a private placement with MetLife Investment Management clients and Barings.
Loan Notes
The Loan Notes of £68,500,000 are secured against a portfolio of Specialised Supported Housing assets throughout the UK, worth approximately £163,823,000 (2024: £170,468,000). The details of the notes are set out in the table below. At 31 December 2025, the Loan Notes have been independently valued at £61,713,000 which has been used to calculate the Group's EPRA Net Disposal Value in note 2 of the Unaudited Performance Measures. The fair value is determined by comparing the discounted future cash flows using the contracted yields with the reference gilts plus the margin implied. The reference gilts used were the Treasury 3.760% 2028 Gilt (Tranche A) and Treasury 4.020% 2033 Gilt (Tranche B), with an implied margin that is unchanged since the date of fixing.
|
Loan Note |
Principal |
Term |
Repayment date |
All in rate |
Independent Valuation |
|
Tranche A |
£41.5 million |
10 years |
30 June 2028 |
2.924% |
£39.0 million |
|
Tranche B |
£27.0 million |
15 years |
30 June 2033 |
3.215% |
£22.7 million |
|
Blended Tranche A & B |
£68.5 million |
12 years |
|
3.039% |
£61.7 million |
In August 2021, the Group put in place Loan Notes of £195,000,000 which enabled the Group to refinance the full £130,000,000 previously drawn under its £160,000,000 RCF with Lloyds and NatWest. The Loan Notes are secured against a portfolio of Specialised Supported Housing assets throughout the UK, worth approximately £382,576,000 (2024: £392,206,000). The details of these notes is set out in the table below. At 31 December 2025, the Loan Notes have been independently valued at £151,279,000 which has been used to calculate the Group's EPRA Net Disposal Value in note 2 of the Unaudited Performance Measures. The fair value is determined by comparing the discounted future cash flows using the contracted yields with the reference gilts plus the margin implied. The reference gilts used were the Treasury 3.900% 2031 Gilt (Tranche A) and Treasury 4.460% 2036 Gilt (Tranche B), with an implied margin that is unchanged since the date of fixing.
|
Loan Note |
Principal |
Term |
Repayment date |
All in rate |
Independent Valuation |
|
Tranche A |
£77.5 million |
10 years |
26 August 2031 |
2.403% |
£65.3 million |
|
Tranche B |
£117.5 million |
15 years |
26 August 2036 |
2.786% |
£86.0 million |
|
Blended Tranche A & B |
£195.0 million |
13 years |
|
2.634% |
£151.3 million |
The Group's loan to value at the year-end was 41.4% (2024: 40.0%).
The loans are considered a Level 2 fair value measurement.
The Group has met all compliance with its financial covenants on the above loans throughout the year.
Effect of covenants
All of the Group's non-current loans and borrowings contain covenants, which, if not met, would result in the borrowings becoming repayable on demand. These borrowings are otherwise repayable more than 12 months after the end of the reporting period. As at 31 December 2025, the Group complied with all the covenants that were required to be met on or before 31 December 2025. The covenants that are required to be complied with after the current reporting date do not affect the classification of the related borrowings as current or non-current at the statement of financial position date. Therefore, all these borrowings remain classified as non-current liabilities.
20. Notes Supporting Statement of Cash Flows
Reconciliation of liabilities to cash flows from financing activities:
|
|
Bank borrowings £'000 (note 19) |
Head lease £'000 (note 17,18) |
Total £'000 |
|
At 1 January 2025 |
261,441 |
1,468 |
262,909 |
|
Cashflows: |
|
|
|
|
Loan arrangement fees paid |
- |
- |
- |
|
|
|
|
|
|
Non-cash flows: |
|
|
|
|
- Amortisation of principal on head lease liabilities |
- |
(40) |
(40) |
|
- Amortisation of loan arrangement fees |
277 |
- |
277 |
|
- Accrued interest on head lease liabilities |
- |
44 |
44 |
|
At 31 December 2025 |
261,718 |
1,472 |
263,190 |
|
|
Bank borrowings £'000 (note 19) |
Head lease £'000 (note 17,18) |
Total £'000 |
|
At 1 January 2024 |
261,183 |
1,464 |
262,647 |
|
Cashflows: |
|
|
|
|
Loan arrangement fees paid |
(29) |
- |
(29) |
|
|
|
|
|
|
Non-cash flows: |
|
|
|
|
- Amortisation of principal on head lease liabilities |
- |
(40) |
(40) |
|
- Amortisation of loan arrangement fees |
287 |
- |
287 |
|
- Accrued interest on head lease liabilities |
- |
44 |
44 |
|
At 31 December 2024 |
261,441 |
1,468 |
262,909 |
21. Share Capital
|
|
Issued and fully paid Number |
Issued and fully paid £'000 |
|
At 1 January 2025 |
393,916,490 |
3,940 |
|
At 31 December 2025 |
393,916,490 |
3,940 |
|
|
Issued and fully paid Number |
Issued and fully paid £'000 |
|
At 1 January 2024 |
393,916,490 |
3,940 |
|
At 31 December 2024 |
393,916,490 |
3,940 |
The Company achieved admission to the specialist fund segment of the main market of the London Stock Exchange on 8 August 2017, raising £200,000,000. As a result of the IPO, at 8 August 2017, 200,000,000 shares at one pence each were issued and fully paid. The Company 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.
Since then, there were three public offers up to 21 October 2020 with a further 193,916,490 Ordinary Shares of one pence each being issued and fully paid.
Rights, preferences and restrictions on shares: All Ordinary Shares carry equal rights, and no privileges are attached to any shares in the Company. All the shares are freely transferable, except as otherwise provided by law. The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regards to the Company's residual assets.
The table above includes 450,000 treasury shares (note 23). Treasury shares do not hold any voting rights.
22. Share Premium Reserve
The share premium reserve relates to amounts subscribed for share capital in excess of nominal value.
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
203,753 |
203,753 |
|
Balance at end of year |
203,753 |
203,753 |
23. Treasury Shares Reserve
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
(378) |
(378) |
|
Balance at end of year |
(378) |
(378) |
The treasury shares reserve relates to the value of shares purchased by the Company in excess of nominal value. No treasury shares were purchased during the current or prior year. As at 31 December 2025 and 31 December 2024, 450,000 1p Ordinary Shares were held by the Company.
24. Capital Reduction Reserve
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
155,359 |
155,359 |
|
Balance at end of year |
155,359 |
155,359 |
The capital reduction reserve is a distributable reserve that was created on the cancellation of share premium.
Capital Redemption Reserve
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
93 |
93 |
|
Balance at end of year |
93 |
93 |
The Capital Redemption Reserve is the nominal value of the shares cancelled from the share buybacks.
25. Retained Earnings
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
26,977 |
84,850 |
|
Total comprehensive income for the year |
2,993 |
(36,389) |
|
Dividends paid |
(21,961) |
(21,484) |
|
Balance at end of year |
8,009 |
26,977 |
26. Dividends
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
1.3650p for the 3 months to 31 December 2023 paid on 28 March 2024 |
- |
5,371 |
|
1.3650p for the 3 months to 31 March 2024 paid on 28 June 2024 |
- |
5,371 |
|
1.3650p for the 3 months to 30 June 2024 paid on 4 October 2024 |
- |
5,371 |
|
1.3650p for the 3 months to 30 September 2024 paid on 13 December 2024 |
- |
5,371 |
|
1.3650p for the 3 months to 31 December 2024 paid on 11 April 2025 |
5,371 |
- |
|
1.4055p for the 3 months to 31 March 2025 paid on 27 June 2025 |
5,530 |
- |
|
1.4055p for the 3 months to 30 June 2025 paid on 3 October 2025 |
5,530 |
- |
|
1.4055p for the 3 months to 30 September 2025 paid on 19 December 2025 |
5,530 |
- |
|
|
21,961 |
21,484 |
On 20 March 2026, the Company declared an interim dividend of 1.4055 pence per Ordinary share for the period 1 October 2025 to 31 December 2025. The total dividend of £5,530,172 will be paid on or around 21 April 2026 to Ordinary shareholders on the register on 7 April 2026.
The Company intends to pay dividends to shareholders on a quarterly basis and in accordance with the
REIT regime.
Dividends are not payable in respect of the Treasury shares held by the Company.
27. Leases
A. Leases as lessee
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be paid after the reporting date:
|
|
< 1 year £'000 |
1-2 years £'000 |
2-3 years £'000 |
3-4 years £'000 |
4-5 years £'000 |
> 5 years £'000 |
Total £'000 |
|
Lease payables |
|
|
|
|
|
|
|
|
31 December 2025 |
40 |
40 |
40 |
40 |
40 |
7,117 |
7,317 |
|
31 December 2024 |
40 |
40 |
40 |
40 |
40 |
7,158 |
7,358 |
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Current liabilities (note 17) |
40 |
40 |
|
Non-current liabilities (note 18) |
1,432 |
1,428 |
|
Balance at end of year |
1,472 |
1,468 |
The above is in respect of properties held by the Group under leasehold. There are 23 properties (2024: 23) held under leasehold with lease terms which range from 125 years to 999 years. The Group's leasing arrangements with lessors are headlease arrangements on land and buildings that have been sub-let under the Group's normal leasing arrangements (see above) to tenants. The Group carries its interest in these headlease arrangements as long leasehold investment property (note 13).
B. Leases as lessor
The Group leases out its investment properties (see note 13).
The undiscounted future minimum lease payments receivable by the Group under non-cancellable operating leases are as follows:
|
|
< 1 year £'000 |
1-2 years £'000 |
2-3 years £'000 |
3-4 years £'000 |
4-5 years £'000 |
> 5 years £'000 |
Total £'000 |
|
Lease receivables |
|
|
|
|
|
|
|
|
31 December 2025 |
43,667 |
43,667 |
43,667 |
43,667 |
43,667 |
436,373 |
654,708 |
|
31 December 2024 |
42,689 |
42,689 |
42,689 |
42,689 |
42,689 |
469,767 |
683,212 |
Leases are direct-let agreements with Registered Providers for a term of at least 15 years and usually between 20 to 25 years with rental uplifts linked to CPI or RPI. All leases are full repairing and insuring (FRI) leases, the tenants are therefore obliged to repair, maintain and renew the properties back to the original conditions.
The following table gives details of the percentage of annual rental income per Registered Provider with 10% or more than 10% share in any year presented. The increase in Portus' share reflects the merger of Best and Westmoreland during the year, with the combined entity now reported under the Portus name. As a result, rental income previously attributed to two separate providers is now consolidated, creating the apparent step‑change in Portus' proportion of annual rental income.
|
Registered Provider |
31 December 2025 % of total annual rent |
31 December 2024 % of total annual rent |
|
Inclusion Housing CIC |
30 |
30 |
|
Portus Supported Housing Limited |
14 |
N/A* |
* Portus Supported Housing Limited was formed in 2025 following the merger of Westmoreland Supported Housing Ltd and Bespoke Supportive Tenancies Ltd.
Other disclosures about leases are provided in notes 5, 13, 15, 17, 18 and 32.
28. Controlling Parties
As at 31 December 2025 there is no ultimate controlling party of the Company.
29. Segmental Information
IFRS 8 Operating Segments requires operating segments to be identified based on internal financial reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker (which in the Group's case is delegated to the Delegated Investment Adviser Atrato for the year covered by these financial statements).
The internal financial reports received by Atrato contain financial information at a Group level as a whole and there are no reconciling items between the results contained in these reports and the amounts reported in the financial statements.
The Group's property portfolio comprised 492 Social Housing properties as of 31 December 2025 (2024: 494) in England, Wales and Scotland. The Directors consider that these properties represent a coherent and diversified portfolio with similar economic characteristics and, as a result, these individual properties have been aggregated into a single operating segment. In the view of the Directors there is accordingly one reportable segment under the provisions of IFRS 8. All the Group's properties are engaged in a single segment business with all revenue, assets and liabilities arising in the UK, therefore, no geographical segmental analysis is required by IFRS 8.
30. Related Party Disclosure
Directors
Directors are remunerated for their services at such rate as the Directors shall from time to time determine.
The Chairman receives a director's fee of £75,000 per annum (2024: £75,000), and the other directors of the Board receive a fee of £50,000 per annum (2024: £50,000). The Directors are also entitled to an additional fee of £7,500 in connection with the production of every prospectus by the Company (including the Issue). No additional fee was received by the Directors in the current year as no prospectus was produced.
The Directors had the following beneficial interests in the issued ordinary share capital of the Company as of 31 December 2024 and at the date of this report:
|
Director |
31 December 2025 |
31 December 2024 |
|
Peter Coward |
80,076 |
80,076 |
|
Christopher Phillips |
54,854 |
54,854 |
|
Tracey Fletcher-Ray |
37,735 |
37,735 |
No shares were held by Ian Reeves, Cecily Davis, Bryan Sherriff and Fionnuala Hogan as of 31 December 2025 (31 December 2024: nil) or the date of resignation as applicable.
Investment Manager
With effect from 1 January 2025 Atrato Partners Limited has been appointed as the Company's Investment Manager.
31. Consolidated Entities
The Group consists of a parent Company, Social Housing REIT plc, incorporated in the UK and a number of subsidiaries held directly by the Company, which operate and are incorporated in the UK. The principal place of business of each subsidiary is the same as their place of incorporation.
The Group owns 100% of the equity shares of all subsidiaries listed below and has the power to appoint and remove the majority of the Board of those subsidiaries. The relevant activities of the below subsidiaries are determined by the Board based on simple majority votes. Therefore, the Directors of the Company concluded that the Company has control over all these entities and all these entities have been consolidated within these financial statements. The principal activity of all the subsidiaries relates to property investment.
The subsidiaries listed below were held as at 31 December 2025:
|
Name of Entity |
Registered Office |
Country of Incorporation |
Ownership % |
|
TP REIT Super Holdco Limited* |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
TP REIT Holdco 1 Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
TP REIT Holdco 2 Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
TP REIT Holdco 3 Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
TP REIT Holdco 4 Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
TP REIT Holdco 5 Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
TP REIT Propco 2 Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
TP REIT Propco 3 Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
TP REIT Propco 4 Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
TP REIT Propco 5 Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
|
Norland Estates Limited |
The Scalpel 18th Floor, 52 Lime Street, London, EC3M 7AF |
UK |
100% |
* indicates entity is a direct subsidiary of Social Housing REIT plc.
32. Financial Risk Management
The Group is exposed to market risk, interest rate risk, credit risk and liquidity risk in the current and future periods. The Board oversees the management of these risks. The Board's policies for managing each of these risks are summarised below.
32.1. Market risk
The Group's activities will expose it primarily to the market risks associated with changes in property values.
Risk relating to investment in property
Investment in property is subject to varying degrees of risk. Some factors that affect the value of the investment in property include:
· changes in the general economic climate;
· competition for available properties;
· obsolescence; and
· Government regulations, including planning, environmental and tax laws.
Variations in the above factors can affect the valuation of assets held by the Group and as a result can influence the financial performance of the Group.
The factors mentioned above have not had a material impact on the valuations of the investment properties as at 31 December 2025, and are not expected to in the immediate future, but will continue to be monitored closely.
There was no impact on the valuations in the year ended 31 December 2025 from climate change factors, given that there is little measurable impact on inputs at present.
32.2. Interest rate risk
The Group's debt at 31 December 2025 does not have any exposure to interest rate risk.
32.3. Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from both its leasing activities and financing activities, including deposits with banks and other institutions as detailed in notes 16 and 19.
Credit risk related to financial instruments and cash deposits
One of the principal credit risks the Group faces arises with the funds it holds with banks and other institutions. At 31 December 2025 the Group has £25,414,000 in current accounts held at banks, see note 16. The Board believes that the credit risk on short-term deposits and current account cash balances is limited because the counterparties are banks and institutions with high credit ratings.
In June 2025, we were pleased that Fitch Ratings re-affirmed the Group's existing long-term Issuer Default Rating of 'A-' and senior secured ratings of 'A' in respect of both debt facilities, see note 19.
All financial assets are regularly monitored. The maximum exposure to credit risk at the reporting date is the carrying value of financial assets disclosed in notes 14, 15 and 16.
Credit risk related to leasing activities
In respect of property investments, in the event of a default by a tenant, the Group will suffer a rental shortfall and additional costs concerning re-letting the property to another Social Housing Registered Provider. Credit risk is primarily managed by testing the strength of covenant of a tenant prior to acquisition and on an ongoing basis. The Investment Manager also monitors the rent collection in order to anticipate and minimise the impact of defaults by occupational tenants. Outstanding rent receivables are regularly monitored, the balance of outstanding rent relating to 31 December 2025 was nil as at 28 February 2026, after a provision for the expected credit loss.
The Group has leases in place with ten Registered Providers that have been deemed non-compliant by the Regulator of Social Housing ('RSH') as at 31 December 2025 (2024: 10). We continue to conduct ongoing due diligence on all Registered Providers and all rents payable under these leases have been paid. We continue to monitor and maintain a dialogue with the Registered Providers as they work with advisers and the RSH to implement a financial and governance improvement action plan in order to address the RSH's concerns. The Board believes that the credit risk associated with the non-compliant rating is limited.
Rent receivable and insurance debtor are the Group's only financial assets that is subjected to the expected credit loss model. While the Group has other financial assets that are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.
32.4. Liquidity risk
The Group manages its liquidity and funding risks by considering cash flow forecasts and ensuring sufficient cash balances are held within the Group to meet future needs. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of financing through appropriate and adequate credit lines, and the ability of customers to settle obligations within normal terms of credit. The Group ensures, through forecasting of capital requirements, that adequate cash is available to fund the Group's operating activities on a weekly basis Upcoming cash requirements are compared to existing cash reserves available, followed by discussions around optimal cash management opportunities in order to best manage liquidity risk.
The following table details the Group's liquidity analysis:
|
31 December 2025 |
< 3 months £'000 |
3-12 Months £'000 |
1-5 years £'000 |
> 5 years £'000 |
Total £'000 |
|
Headleases (note 27) |
10 |
30 |
160 |
7,117 |
7,317 |
|
Trade and other payables (note 17) |
2,708 |
- |
- |
- |
2,708 |
|
Bank and other borrowings (note 19) |
|
|
|
|
|
|
- Fixed interest rate |
- |
- |
41,500 |
222,000 |
263,500 |
|
Interest payable on bank and other borrowings: |
|
|
|
|
|
|
- Fixed interest rate |
1,804 |
5,413 |
25,836 |
21,905 |
54,958 |
|
Total |
4,522 |
5,443 |
67,496 |
251,022 |
328,483 |
32.5. Financial instruments
The Group's principal financial assets and liabilities, which are all held at amortised cost, are those that arise directly from its operation: trade and other receivables, trade and other payables, headleases, borrowings and cash, cash equivalents and restricted cash.
Set out below is a comparison by class of the carrying amounts and fair value of the Group's financial instruments that are included in the financial statements:
|
|
Book value 31 December 2025 £'000 |
Fair value 31 December 2025 £'000 |
Book value 31 December 2024 £'000 |
Fair value 31 December 2024 £'000 |
|
Financial liabilities: |
|
|
|
|
|
Bank and other borrowings |
261,718 |
212,992 |
261,441 |
202,836 |
33. Post Balance Sheet Events
Dividend
On 20 March 2026, the Company declared an interim dividend of 1.4055 pence per Ordinary share for the period 1 October 2025 to 31 December 2025. The total dividend of £5,530,172 will be paid on or around 21 April 2026 to Ordinary shareholders on the register on 7 April 2026.
Property Sales
3 non-performing properties sales have completed at time of announcement, being those assets held for sale at 31 December 2025. The properties were sold for £1,770,000.
Assignment of Leases to Independent Housing Ltd
Following regulatory engagement, two properties were successfully assigned from Pivotal to Independent Housing Ltd.
Westmoreland FRI Lease Reversion
20 properties previously assigned from Parasol to Portus (formerly Westmoreland) achieved stabilisation and reverted to fully repairing and insuring lease terms.
34. Capital Commitments
The Group does not have capital commitments in both the prior year and the current year.
35. Earnings Per Share
Earnings per share ("EPS") amounts are calculated by dividing profit for the year attributable to ordinary shareholders of the Company by the weighted average number of Ordinary Shares in issue during the period. As there are no dilutive instruments outstanding, both basic and diluted earnings per share are the same.
The calculation of basic and diluted earnings per share is based on the following:
|
|
Year ended 31 December 2025 |
Year ended 31 December 2024 |
|
Calculation of Earnings per share |
|
|
|
Net profit/(loss) attributable to Ordinary Shareholders (£'000) |
2,993 |
(36,389) |
|
Weighted average number of Ordinary Shares (excluding treasury shares) |
393,466,490 |
393,466,490 |
|
IFRS Earnings/(loss) per share - basic and diluted |
0.76 |
(9.25) |
Calculation of EPRA Earnings per share
|
Net profit/(loss) attributable to Ordinary Shareholders (£'000) |
2,993 |
(36,389) |
|
Loss from fair value adjustment on investment properties (£'000) |
22,053 |
53,030 |
|
Termination fees (£'000) |
- |
3,343 |
|
EPRA earnings (£'000) |
25,046 |
19,984 |
|
Non-cash adjustments to include: |
|
|
|
Amortisation of loan arrangement fees (£'000) |
277 |
287 |
|
Movement in Lease Incentive Debtor (£'000) |
372 |
965 |
|
Adjusted earnings (£'000) |
25,695 |
21,236 |
|
|
|
|
|
Weighted average number of Ordinary Shares (excluding treasury shares) |
393,466,490 |
393,466,490 |
|
EPRA earnings per share - basic and diluted |
6.37p |
5.08p |
|
Adjusted earnings per share - basic and diluted |
6.53p |
5.40p |
EPRA released revised Best Practice Reporting guidelines during September 2024 which are effective for reporting periods beginning on or after 1 October 2024. The revised guidelines permit adjustments in respect of non-operating or exceptional items within EPRA earnings as they are unusual in nature and very unlikely to reoccur in the foreseeable future. The termination payments of £3,343,000 in respect of the change in Investment manager in 2024 are considered to be exceptional items and have been added back in arriving at EPRA earnings.
Adjusted earnings is a performance measure used by the Board to assess the Group's dividend payments. The metric adjusts EPRA earnings for non-cash items, including amortisation of ongoing loan arrangement fees and the movement in the lease incentive debtor. In the current year, an amount of £263,000 (2024: £1,984,000 in respect of a lease incentive debtor relating to Parasol when the leases were transferred to Westmoreland) was written off in respect of a lease incentive debtor relating to two properties that were sold in Q1 2025. The Board sees these adjustments as a reflection of actual cashflows which are supportive of dividend payments. The Board compares adjusted earnings to the available distributable reserves when considering the level of dividend to pay.
36. Net Asset Value Per Share
Basic Net Asset Value ("NAV") per share is calculated by dividing net assets in the Group Statement of Financial Position attributable to Ordinary Shareholders of the Company by the number of Ordinary Shares outstanding at the end of the period. Although there are no dilutive instruments outstanding, both basic and diluted NAV per share are disclosed below.
Net asset values have been calculated as follows:
|
|
31 December 2025 |
31 December 2024 |
|
Net assets at the end of the year (£'000) |
370,776 |
389,744 |
|
Shares in issue at end of the year (excluding treasury shares) |
393,446,490 |
393,466,490 |
|
Dilutive shares in issue |
- |
- |
|
IFRS NAV per share - basic and dilutive |
94.23p |
99.05p |
37. Capital Management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to minimise the cost of capital.
The Group considers proceeds from share issuance, bank and other borrowings and retained earnings as capital.
Any surplus cash balances are invested in cash equivalents, near cash instruments and money market instruments, in order to maximise returns pending re-investment or distributions.
The level of borrowing will be on a prudent basis for the asset class and will seek to achieve a low cost of funds, whilst maintaining the flexibility in the underlying security requirements and the structure of both the investment property portfolio and the Group.
The Directors currently intend that the Group should target a level of aggregate borrowings over the medium term equal to approximately 40% of the Group's Gross Asset Value. The aggregate borrowings will always be subject to an absolute maximum, calculated at the time of drawdown, of 50% of the Gross Asset Value.
The initial fixed rate facility with MetLife requires an asset cover ratio of x2.00 and an interest cover ratio of x1.75. At 31 December 2025, the Group was fully compliant with both covenants with an asset cover ratio of x2.39 (2024: x2.49) and an interest cover ratio of x4.89 (2024: x4.78).
The subsequent facility with MetLife and Barings requires an asset cover ratio of x1.67 and an interest cover ratio of x1.75. At 31 December 2025, the Group was fully compliant with both covenants with an asset cover ratio of x1.96 (2024: x2.01) and an interest cover ratio of x4.82 (2024: x4.28).
Company Statement of Financial Position
As at 31 December 2025
|
|
Note |
Year ended 31 December £'000 |
Year ended 31 December 2024 £'000 |
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Investment in subsidiaries |
4 |
358,968 |
379,703 |
|
Total non-current assets |
|
358,968 |
379,703 |
|
|
|
|
|
|
Current assets |
|
|
|
|
Trade and other receivables |
5 |
1,649 |
6,829 |
|
Cash, cash equivalents and restricted cash |
6 |
12,132 |
13,988 |
|
Total current assets |
|
13,781 |
20,817 |
|
Total assets |
|
372,749 |
400,520 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
7 |
1,973 |
10,776 |
|
Total current liabilities |
|
1,973 |
10,776 |
|
|
|
|
|
|
Total liabilities |
|
1,973 |
10,776 |
|
Total net assets |
|
370,776 |
389,744 |
|
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
8 |
3,940 |
3,940 |
|
Share premium reserve |
9 |
203,753 |
203,753 |
|
Treasury shares reserve |
10 |
(378) |
(378) |
|
Capital reduction reserve |
11 |
155,359 |
155,359 |
|
Capital redemption reserve |
11 |
93 |
93 |
|
Retained earnings |
13 |
8,009 |
26,977 |
|
Total equity |
|
370,776 |
389,744 |
|
|
|
|
|
|
IFRS net asset value per share - basic and diluted |
14 |
94.23p |
99.05p |
The Company has taken advantage of the exemption allowed under Section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit of the Company for the year was £2,993,000 (2024: Loss of £36,389,000).
The Company Financial Statements were approved and authorised for issue by the Board on 25 March 2026 and signed on its behalf by:
Chris Phillips
Chair
25 March 2026
The accompanying notes form an integral part of these Company Financial Statements.
Company Statement of Changes in Equity
For the year ended 31 December 2025
|
|
Note |
Share capital £'000 |
Share premium reserve £'000 |
Treasury shares reserve £'000 |
Capital redemption reserve £'000 |
Capital reduction reserve £'000 |
Retained earnings £'000 |
Total equity £'000 |
|
Balance at |
|
3,940 |
203,753 |
(378) |
93 |
155,359 |
26,977 |
389,744 |
|
Total comprehensive income for the year |
|
- |
- |
- |
- |
- |
2,993 |
2,993 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Dividends paid |
12 |
- |
- |
- |
- |
- |
(21,961) |
(21,961) |
|
Balance at |
|
3,940 |
203,753 |
(378) |
93 |
155,359 |
8,009 |
370,776 |
|
|
Note |
Share capital £'000 |
Share premium reserve £'000 |
Treasury shares reserve £'000 |
Capital redemption reserve £'000 |
Capital reduction reserve £'000 |
Retained earnings £'000 |
Total equity £'000 |
|
Balance at |
|
3,940 |
203,753 |
(378) |
93 |
155,359 |
84,850 |
447,617 |
|
Total comprehensive income for the year |
|
- |
- |
- |
- |
- |
(36,389) |
(36,389) |
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
Dividends paid |
12 |
- |
- |
- |
- |
- |
(21,484) |
(21,484) |
|
Balance at |
|
3,940 |
203,753 |
(378) |
93 |
155,359 |
26,977 |
389,744 |
The accompanying notes form an integral part of these Company Financial Statements.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31 December 2025
1. Basis of Preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 100 Application of Financial Reporting Requirements ("FRS 100") and Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101") and in accordance with the Companies Act 2006.
1.1. Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS 101. Therefore, these financial statements do not include:
· certain disclosures regarding the Company's capital;
· a statement of cash flows;
· the effect of future accounting standards not yet adopted;
· the disclosure of the remuneration of key management personnel; and
· disclosure of related party transactions with other wholly owned members of the Group.
In addition, and in accordance with FRS 101 further disclosure exemptions have been adopted because equivalent disclosures are included in the Group Financial Statements. These financial statements do not include certain disclosures in respect of:
· financial instruments; and
· fair value measurement other than certain disclosures required as a result of recording financial instruments at fair value.
The material accounting policy information applied in the preparation of the financial statements are set out below.
2. Summary of Material Accounting Policies
2.1. Currency
The Company financial information is presented in Sterling which is also the Company's functional currency.
2.2. Investment in subsidiaries
Investment in subsidiaries is included in the Company's Statement of Financial Position at cost less provision for impairment. Investments are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, the asset is written down accordingly. Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income. Where assets have been transferred within the Group, a capital reduction in the originating company is performed, and a dividend is declared to Social Housing REIT plc. This results in an impairment to investments in subsidiaries.
2.3. Trade and other receivables
Trade and other receivables are amounts due in the ordinary course of business. If collection is expected in one year or less from the end of the reporting period, they are classified as current assets.
Rent receivables are initially recognised at fair value plus transaction costs and are subsequently carried at amortised cost, less provision for impairment.
Impairment provisions for amounts due from subsidiaries are recognised based on a forward-looking expected credit loss model using the general approach. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, 12 month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
2.4. Dividend payable to shareholders
Dividends to the Company's shareholders are recognised as a liability in the Company's financial statements in the period in which the dividends are approved. Interim dividends are recognised when paid. In the case of final dividends, this is when approved by the shareholders at the Annual General Meeting.
2.5. Investment management fees
Investment management fees are recognised in the profit or loss on an accrual basis.
2.6. Treasury shares
Consideration paid or received for the purchase or sale of treasury shares is recognised directly in equity. The cost of treasury shares held is presented as a separate reserve (the "treasury share reserve"). Any excess of the consideration received on the sale of treasury shares over the weighted average cost of the shares sold is credited to retained earnings.
3. Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Company's Financial Statements requires the Directors to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. The estimate and associated assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows:
Investments
Investments held as non-current assets are stated at cost less any provision for impairment. The Directors assess the recoverability of investments made and economic benefit of the investments based on market conditions, economic forecasts and cash flow estimates.
4. Investment in Subsidiaries
|
|
31 December 2025 £000 |
31 December 2024 £000 |
|
Balance at beginning of year |
379,703 |
432,498 |
|
Impairment charge for the year |
(28,224) |
(53,644) |
|
Additions |
7,489 |
849 |
|
Balance at end of year |
358,968 |
379,703 |
Investment in subsidiaries are included in the Company's Statement of Financial Position at cost less provision for impairment.
An impairment of £28,224,000 (2024: £53,644,000) has been recognised in the current year following the reduction in the valuations of the underlying investment properties. Following these valuation reductions the net assets of certain subsidiaries no longer support the carrying value of the investments in line with the recoverable amount, which was also considered to be its value in use. The underlying assumptions are detailed in note 13 to the Group financial statements. There has also been a material increase in amounts due from subsidiaries during the year, these amounts are expected to be settled in full post period end.
Given that the underlying investments are supported by a valuation of the properties, the Company has considered the recoverable amount by reference to the net asset value of the Group. If the average discount rate in the valuation of the Group's investment properties were 1% lower/higher, the carrying value would be £64,308,000 higher/£54,751,000 lower respectively.
A list of the Company's subsidiary undertakings as at 31 December 2025 is included in note 31 of the Group Financial Statements.
5. Trade and other Receivables
|
|
31 December 2025 £000 |
31 December 2024 £000 |
|
Amounts due from subsidiaries |
1,492 |
6,696 |
|
Prepayments |
143 |
133 |
|
Other receivables |
14 |
- |
|
|
1,649 |
6,829 |
The directors consider that the carrying value of trade and other receivables approximate their fair value. All amounts are due to be received within one year from the reporting date.
The Company applies the general approach to providing for expected credit losses under IFRS 9 for amounts due from subsidiaries. The expected credit loss in the current year and prior year are immaterial.
6. Cash, Cash Equivalents and Restricted Cash
|
|
31 December 2025 £000 |
31 December 2024 £000 |
|
Restricted cash |
427 |
593 |
|
Cash at bank |
3,684 |
13,391 |
|
Cash Held by Lawyers |
21 |
4 |
|
Liquidity Funds |
8,000 |
- |
|
|
12,132 |
13,988 |
Restricted cash represents monies held in escrow in relation to the transfer of leases to be used for future costs. Liquidity funds represent surplus cash deposited with Treasury Spring across multiple accounts with varying maturities. This arrangement was implemented to achieve improved interest returns on available cash.
7. Trade and Other Payables
Current Liabilities
|
|
31 December 2025 £000 |
31 December 2024 £000 |
|
Trade payables |
1,179 |
139 |
|
Accruals |
764 |
5,518 |
|
Amounts owed to subsidiaries |
10 |
5,099 |
|
Other creditors |
20 |
20 |
|
|
1,973 |
10,776 |
The directors consider that the carrying value of trade and other payables approximate their fair value.
All amounts are due for payment within one year from the reporting date. The £1,179,000 of trade payables includes £836,000 owed to Atrato in relation to Q4's management fee, this was settled in early January 2026.
8. Share Capital
|
|
Issued and fully paid Number |
Issued and fully paid £'000 |
|
At 1 January 2025 |
393,916,490 |
3,940 |
|
At 31 December 2025 |
393,916,490 |
3,940 |
|
|
Issued and fully paid Number |
Issued and fully paid £'000 |
|
At 1 January 2024 |
393,916,490 |
3,940 |
|
At 31 December 2024 |
393,916,490 |
3,940 |
The Company 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. Further details are provided in note 21 of the Group Financial Statements.
9. Share Premium Reserve
The share premium reserve relates to amounts subscribed for share capital in excess of nominal value.
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
203,753 |
203,753 |
|
Balance at end of year |
203,753 |
203,753 |
10. Treasury Shares Reserve
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
(378) |
(378) |
|
Balance at end of year |
(378) |
(378) |
The treasury shares reserve relates to the value of shares purchased by the Company in excess of nominal value. No treasury shares were purchased during the current or prior year. As at 31 December 2025, 450,000 1p Ordinary Shares are held by the Company (31 December 2024: 450,000 1p Ordinary Shares).
11. Capital Reduction Reserve
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
155,359 |
155,359 |
|
Balance at end of year |
155,359 |
155,359 |
The capital reduction reserve relates to the distributable reserve established on cancellation of the share premium reserve.
Capital Redemption Reserve
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
93 |
93 |
|
Balance at end of year |
93 |
93 |
The Capital Redemption Reserve is the nominal value of the shares cancelled from the share buybacks.
12. Dividends
|
|
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
1.3650p for the 3 months to 31 December 2023 paid on 28 March 2024 |
- |
5,371 |
|
1.3650p for the 3 months to 31 March 2024 paid on 28 June 2024 |
- |
5,371 |
|
1.3650p for the 3 months to 30 June 2024 paid on 4 October 2024 |
- |
5,371 |
|
1.3650p for the 3 months to 30 September 2024 paid on 13 December 2024 |
- |
5,371 |
|
1.3650p for the 3 months to 31 December 2024 paid on 11 April 2025 |
5,371 |
- |
|
1.4055p for the 3 months to 31 March 2025 paid on 27 June 2025 |
5,530 |
- |
|
1.4055p for the 3 months to 30 June 2025 paid on 3 October 2025 |
5,530 |
- |
|
1.4055p for the 3 months to 30 September 2025 paid on 19 December 2025 |
5,530 |
- |
|
|
21,961 |
21,484 |
On 20 March 2026, the Company declared an interim dividend of 1.4055 pence per Ordinary share for the period 1 October 2025 to 31 December 2025. The total dividend of £5,530,172 will be paid on or around 21 April 2026 to Ordinary shareholders on the register on 7 April 2026.
The Company intends to pay dividends to shareholders on a quarterly basis and in accordance with the REIT regime.
Dividends are not payable in respect of the treasury shares held by the Company.
13. Retained Earnings
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Balance at beginning of year |
26,977 |
84,850 |
|
Total comprehensive income for the year |
2,993 |
(36,389) |
|
Dividends paid |
(21,961) |
(21,484) |
|
Balance at end of year |
8,009 |
26,977 |
14. Net Asset Value Per Share
Net Asset Value per share is calculated by dividing net assets in the Company Statement of Financial Position attributable to ordinary equity holders of the Company by the number of Ordinary Shares outstanding at the end of the year. Although there are no dilutive instruments outstanding, both basic and diluted NAV per share are disclosed below.
Net asset values have been calculated as follows:
|
|
31 December 2025 |
31 December 2024 |
|
Net assets at the end of the year (£'000) |
370,776 |
389,744 |
|
Shares in issue at end of the year (excluding treasury shares) |
393,466,490 |
393,466,490 |
|
Dilutive shares in issue |
- |
- |
|
NAV per share - basic and dilutive |
94.23p |
99.05p |
15. Related Party Transactions
The Company has taken advantage of the exemption not to disclose transactions with other members of the Group as the Company Financial Statements are presented together with the Group Financial Statements.
Note 30 of the Notes to the Group Financial Statements includes details of other related party transactions undertaken by the Company and its subsidiaries.
16. Post Balance Sheet Events
Dividend
On 20 March 2026, the Company declared an interim dividend of 1.4055 pence per Ordinary share for the period 1 October 2025 to 31 December 2025. The total dividend of £5,530,172 will be paid on or around 21 April 2026 to Ordinary shareholders on the register on7 April 2026.
Unaudited Performance Measures
For the year ended 31 December 2025
1. EPRA Net Reinstatement Value
|
|
31 December 2025 |
31 December 2024 |
|
IFRS NAV/EPRA NAV (£'000) |
370,776 |
389,744 |
|
Include: |
|
|
|
Real Estate Transfer Tax* (£'000) |
36,700 |
38,594 |
|
EPRA Net Reinstatement Value (£'000) |
407,476 |
428,338 |
|
Fully diluted number of shares |
393,466,490 |
393,466,490 |
|
PRA Net Reinstatement value per share |
103.56p |
108.86p |
* Purchasers' costs
2. EPRA Net Disposal Value
|
|
31 December 2025 |
31 December 2024 |
|
IFRS NAV/EPRA NAV (£'000) |
370,776 |
389,744 |
|
Include: |
|
|
|
Fair value of debt* (£'000) |
48,726 |
58,605 |
|
EPRA Net Disposal Value (£'000) |
419,502 |
448,349 |
|
Fully diluted number of shares |
393,466,490 |
393,466,490 |
|
EPRA Net Disposal Value** |
106.62p |
113.95p |
* Difference between interest-bearing loans and borrowings included in Group Statement of Financial Position at amortised cost, and the fair value of interest-bearing loans and borrowings.
** Equal to the EPRA NNNAV disclosed in previous reporting periods.
3. EPRA Net Tangible Assets
|
|
31 December 2025 |
31 December 2024 |
|
IFRS NAV/EPRA NAV (£'000) |
370,776 |
389,744 |
|
EPRA Net Tangible Assets (£'000) |
370,776 |
389,744 |
|
Fully diluted number of shares |
393,466,490 |
393,466,490 |
|
EPRA Net Tangible Assets* |
94.23p |
99.05p |
* Equal to IFRS NAV and previous EPRA NAV metric as none of the EPRA Net Tangible Asset adjustments are applicable as at31 December 2025 or 31 December 2024.
4. EPRA net initial yield (NIY) and EPRA "topped up" NIY
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Investment properties - wholly-owned (excluding head lease ground rents) |
603,288 |
623,227 |
|
Less: development properties |
- |
- |
|
Completed property portfolio |
603,288 |
623,227 |
|
Allowance for estimated purchasers' costs |
36,700 |
38,594 |
|
Gross up completed property portfolio valuation |
639,988 |
661,821 |
|
|
|
|
|
Annualised passing rental income |
43,657 |
42,606 |
|
Property outgoings |
- |
- |
|
Annualised net rents |
43,657 |
42,606 |
|
Contractual increases for lease incentives |
10 |
83 |
|
Topped up annualised net rents |
43,667 |
42,689 |
|
|
|
|
|
EPRA NIY |
6.82% |
6.44% |
|
EPRA Topped Up NIY |
6.82% |
6.45% |
5. Ongoing Charges Ratio
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Annualised ongoing charges |
5,757 |
6,885 |
|
Average undiluted net assets |
380,260 |
418,681 |
|
Ongoing charges |
1.51% |
1.64% |
6. EPRA Vacancy Rate
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Estimated Market Rental Value (ERV) of vacant spaces |
673 |
138 |
|
Estimated Market Rental Value (ERV) of whole portfolio |
43,805 |
42,826 |
|
EPRA Vacancy Rate |
1.54% |
0.32% |
The EPRA vacancy rate is calculated as the ERV of the unrented, lettable space as a proportion of the total rental value of the Investment Property portfolio. This is expected to continue to be a highly immaterial percentage.
As at 31 December 2025, the portfolio comprised four vacant properties, representing a combined ERV of £673k (31 December 2024: one vacant property at ERV: £138k).
7. EPRA Cost Ratio
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Administration expenses per IFRS |
4,347 |
3,863 |
|
|
|
|
|
Service charge income |
- |
- |
|
Service charge costs |
- |
- |
|
Net Service charge costs |
- |
- |
|
|
|
|
|
Management fees |
3,265 |
7,814 |
|
Total costs (including direct vacant property costs) (A) |
7,612 |
11,677 |
|
|
|
|
|
Vacant property costs |
(276) |
(33) |
|
Total costs (excluding direct vacant property costs) (B) |
7,336 |
11,644 |
|
|
|
|
|
Gross rental income per IFRS |
40,743 |
39,072 |
|
Less: service charge components of gross rental income |
- |
- |
|
Gross rental income (C) |
40,743 |
39,072 |
|
|
|
|
|
EPRA Cost ratio (inc. direct vacant property costs) (A/C) |
18.68% |
29.89% |
|
EPRA Cost ratio (exc. direct vacant property costs) (B/C) |
18.00% |
29.81% |
8. EPRA Like-For-Like Rental Growth
|
Sector |
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
Like-for-Like rental growth % |
|
UK |
43,492 |
42,553 |
2.21% |
The like-for-like rental growth is based on the changes in rental income for those properties which have been held for the duration of both the current and comparative reporting period. Properties acquired, disposed of or under development during either period are excluded. This represents a portfolio valuation, as assessed by the valuer of £606.3 million billion (31 December 2024: £626.4 million).
9. EPRA LTV
|
|
31 December 2025 £'000 |
31 December 2024 £'000 |
|
Group Net Debt |
|
|
|
Borrowings from financial institutions |
263,250 |
262,969 |
|
Net payables |
- |
- |
|
Less: Cash and cash equivalents |
(25,414) |
(27,492) |
|
Group Net Debt Total (A) |
237,836 |
235,477 |
|
|
|
|
|
Group Property Value |
|
|
|
Investment properties at fair value |
602,814 |
624,695 |
|
Assets held for sale |
1,947 |
- |
|
Intangibles |
- |
- |
|
Net receivables |
3,852 |
526 |
|
Financial assets |
- |
- |
|
Total Group Property Value (B) |
608,613 |
625,221 |
|
|
|
|
|
Group LTV (A/B) |
39.08% |
37.66% |
|
|
|
|
|
Share of Joint Ventures Debt |
|
|
|
Bond loans |
- |
- |
|
Net payables |
- |
- |
|
JV Net Debt Total (A) |
- |
- |
|
|
|
|
|
Group Property Value |
|
|
|
Owner-occupied property |
- |
- |
|
Investment properties at fair value |
- |
- |
|
Total JV Property Value (B) |
- |
- |
|
|
|
|
|
JV LTV (A/B) |
0.00% |
0.00% |
|
Combined Net Debt (A) |
237,836 |
235,477 |
|
Combined Property Value (B) |
608,613 |
625,221 |
|
Combined LTV (A/B) |
39.08% |
37.66% |
10. EPRA Property Related Capital Expenditure
|
Group |
Year ended 31 December 2025 £'000 |
Year ended 31 December 2024 £'000 |
|
Acquisitions |
- |
- |
|
Development |
1,531 |
1,499 |
|
Investment Properties |
669 |
722 |
|
Group Total CapEx |
2,200 |
2,221 |
|
|
|
|
|
Joint Venture |
|
|
|
Acquisitions |
- |
- |
|
Development |
- |
- |
|
Investment Properties |
- |
- |
|
Joint Venture CapEx |
- |
- |
|
|
|
|
|
Total CapEx |
2,200 |
2,221 |
Acquisitions relate to purchase of investment properties in the year and includes capitalised acquisition costs. Development relates to capitalised costs in relation to development expenditure on the property portfolio.
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