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Equity Bottom-Up

Triple Point Social Housing REIT / Equity Bottom-Up

Triple Point Social Housing REIT (SOHO) reported a robust FY23 financial performance. Benefiting from inflation-linked rental growth and improving rent collection, DPS is once again covered on a run-rate basis, and we expect further progress. Operational initiatives included the roll-out of the new lease clause and launch of the eco-retrofit pilot project.

Triple Point Social Housing REIT (SOHO) reported a robust FY23 financial performance. Benefiting from inflation-linked rental growth and improving rent collection, DPS is once again covered on a run-rate basis, and we expect further progress. Operational initiatives included the roll-out of the new lease clause and launch of the eco-retrofit pilot project.

Triple Point Social Housing REIT - Financial and operational progress

With indexed rental growth continuing and rent collection recovering, Triple Point Social Housing REIT’s (SOHO’s) Q323 dividend was fully covered, and we expect this to continue. Meanwhile, while the board continues its focus on closing the share price discount to NAV, it has concluded that any further capital return is dependent on significant additional liquidity being generated through property sales.

With indexed rental growth continuing and rent collection recovering, Triple Point Social Housing REIT’s (SOHO’s) Q323 dividend was fully covered, and we expect this to continue. Meanwhile, while the board continues its focus on closing the share price discount to NAV, it has concluded that any further capital return is dependent on significant additional liquidity being generated through property sales. 

Triple Point Social Housing REIT - Q323 DPS was fully covered

Triple Point Social Housing (SOHO) reported solid H123 results. With borrowing costs fixed, growth in indexed rental income partly offset the impact of credit loss provisions against its two unperforming tenants. Progress is being made in resolving these issues, and as there is no read-across to the wider portfolio, we forecast full dividend cover through FY24. Meanwhile, with the demand for specialised supported housing remaining strong, SOHO has entered a partnership with one of the leading providers in the sector.

Triple Point Social Housing (SOHO) reported solid H123 results. With borrowing costs fixed, growth in indexed rental income partly offset the impact of credit loss provisions against its two unperforming tenants. Progress is being made in resolving these issues, and as there is no read-across to the wider portfolio, we forecast full dividend cover through FY24. Meanwhile, with the demand for specialised supported housing remaining strong, SOHO has entered a partnership with one of the leading providers in the sector.

Triple Point Social Housing REIT - Robust base and capital deployment options

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Civitas Social Housing PLC / Event-Driven

<ul>
<li>Property developer/investor CK Asset Holdings made a 80p/share (+1.425p dividend) cash takeover offer for value-destroyer Civitas Social Housing REIT, implied equity value £485million, 44% premium and 26.7% discount to NAV.</li>
<li>Before offer announcement, Civitas traded at 50% discount to NAV, 8.1% dividend yield (covered &lt;1x). Although my fair value estimate (dividend discount model) is 83p, shareholders will likely cash in.</li>
<li>Spread is 1.26%/3.91% (gross/annualised, assuming all payments by 11 September for simplicity). Readacross: Triple Point (SOHO LN), at 49% discount/NAV, 10.1% dividend yield (covered 0.92x), could also be a target.</li>
</ul>


Property developer/investor CK Asset Holdings made a 80p/share (+1.425p dividend) cash takeover offer for value-destroyer Civitas Social Housing REIT, implied equity value £485million, 44% premium and 26.7% discount to NAV.
Before offer announcement, Civitas traded at 50% discount to NAV, 8.1% dividend yield (covered &lt;1x). Although my fair value estimate (dividend discount model) is 83p, shareholders will likely cash in.
Spread is 1.26%/3.91% (gross/annualised, assuming all payments by 11 September for simplicity). Readacross: Triple Point (SOHO LN), at 49% discount/NAV, 10.1% dividend yield (covered 0.92x), could also be a target.


CK Asset Holdings/Civitas Social Housing: Recommended Offer

Triple Point Social Housing REIT’s (SOHO’s) FY22 results were robust. Indexed rent growth compensated for higher debt costs and expected credit losses, and the DPS target was met. Income and dividends have grown each year since listing, while the company has generated strong social returns. We expect progress in FY23 despite a continuation of credit losses, for which SOHO has set out a path to recovery. Sector issues raised by the regulator continue to generate uncertainty despite a positive response and good performance from many lessees, and tangible progress at others. This seems unrecognised in the share price.

Triple Point Social Housing REIT’s (SOHO’s) FY22 results were robust. Indexed rent growth compensated for higher debt costs and expected credit losses, and the DPS target was met. Income and dividends have grown each year since listing, while the company has generated strong social returns. We expect progress in FY23 despite a continuation of credit losses, for which SOHO has set out a path to recovery. Sector issues raised by the regulator continue to generate uncertainty despite a positive response and good performance from many lessees, and tangible progress at others. This seems unrecognised in the share price.

Triple Point Social Housing REIT - Strong rental growth mitigating challenges

United Kingdom

Triple Point Social Housing REIT plc operates as a real estate investment trust. The Company provides closed-ended investment services. Triple Point Social Housing REIT invests in property, technology, renewable energy, asset finance in leasing, lending, and other related sectors. Triple Point Social Housing REIT serves customers worldwide.

Triple Point Social Housing REIT (SOHO LN)

Triple Point Social Housing REIT - Financial and operational progress

Triple Point Social Housing REIT (SOHO) reported a robust FY23 financial performance. Benefiting from inflation-linked rental growth and improving...

Edison Investment Research

Triple Point Social Housing REIT - Q323 DPS was fully covered

With indexed rental growth continuing and rent collection recovering, Triple Point Social Housing REIT’s (SOHO’s) Q323 dividend was fully covered,...

Edison Investment Research

Triple Point Social Housing REIT - Robust base and capital deployment options

Triple Point Social Housing (SOHO) reported solid H123 results. With borrowing costs fixed, growth in indexed rental income partly offset the...

Edison Investment Research

CK Asset Holdings/Civitas Social Housing: Recommended Offer

CK Asset Holdings made a 80p/share cash takeover offer for value-destroyer Civitas Social Housing. Before announcement, Civitas traded at 50%...

Jesus Rodriguez Aguilar

Triple Point Social Housing REIT - Strong rental growth mitigating challenges

Triple Point Social Housing REIT’s (SOHO’s) FY22 results were robust. Indexed rent growth compensated for higher debt costs and expected credit...

Edison Investment Research