Triple Point Soc.Hsg - Portfolio Update - My Space Housing Solutions
19/12/2022 11:00
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RNS Number : 1767K Triple Point Social Housing REIT 19 December 2022
19 December 2022
Triple Point Social Housing REIT plc
(the "Company" or, together with its subsidiaries, the "Group")
Portfolio Update - My Space Housing Solutions
The Board of Triple Point Social Housing REIT plc (ticker: SOHO) notes the
Regulatory Judgement published today by the Regulator of Social Housing (the
"Regulator") in relation to My Space Housing Solutions ("My Space").
My Space is a registered provider focused on providing homes to vulnerable
individuals with over 1,000 social housing units under management as at 30
September 2022. Following the Regulator's initial judgement in December 2020
(see "Portfolio Update - My Space Housing Solutions", RNS number 0030J, dated
17 December 2020) which graded My Space as 'non-compliant' with a V3 rating
for viability and a G3 rating for governance, the latest judgement has
downgraded My Space to ratings of V4 and G4, respectively.
These latest ratings reflect concerns of the Regulator which include: i) not
all of My Space's housing stock meets the definition of "Specialised Supported
Housing", and therefore might not qualify for an exception from the Rent
Standard; ii) the available financial information and assurances around My
Space's solvency position; and iii) risk management and governance, including
potential conflicts of interest which have been identified in respect of
certain members of the My Space board.
The Group has 34 properties leased to My Space, with the last property leased
to My Space acquired in October 2018. As at 30 September 2022, the My Space
portfolio represented 7.5 per cent of the Group's contracted rent roll. My
Space is one of the two Approved Providers referred to in the Group's interim
results for the six months to 30 June 2022 as being in rent arrears, and an
associated expected credit loss was recognised in the Statement of
Comprehensive Income for the six-month period.
The aggregate value of the properties leased to My Space, as at 30 September
2022, was £42.8 million (representing c. 6.4 per cent of the Group's
portfolio value), reflecting a decrease of 14.6 per cent since 31 December
2021. This lower valuation is reflected in the Group's Net Asset Value as at
30 September 2022, and was referenced in the Company's announcement on 23
November 2022 ("Net Asset Value and Dividend Declaration", RNS number 2588H).
The Group's investment manager, Triple Point Investment Management LLP (the
"Manager"), continues to engage actively with My Space regarding improvements
to its operations, with the aim of increasing rental payments and agreeing a
payment schedule in respect of rent arrears. The Manager also notes that My
Space has sought to address a number of the concerns noted in today's
Regulatory Judgement. However, as part of the ongoing engagement with My
Space, the Group will consider whether it is appropriate to put in place
alternative arrangements for some or all of its properties.
The Board welcomes the Regulator's ongoing review of the specialised supported
housing sector, bringing as it does higher levels of accountability and
transparency.
FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:
Triple Point Investment Management LLP Tel: 020 7201 8989
(Investment Manager)
Max Shenkman
Isobel Gunn-Brown
Akur Capital (Joint Financial Adviser) Tel: 020 7493 3631
Tom Frost
Anthony Richardson
Siobhan Sergeant
Stifel (Joint Financial Adviser and Corporate Broker) Tel: 020 7710 7600
Mark Young
Mark Bloomfield
Rajpal Padam
Madison Kominski
The Company's LEI is 213800BERVBS2HFTBC58.
Further information on the Company can be found on its website at
www.triplepointreit.com (http://www.triplepointreit.com/) .
NOTES:
The Company invests in primarily newly developed social housing assets in the
UK, with a particular focus on supported housing. The majority of the assets
within the portfolio are subject to inflation-linked, long-term, Fully
Repairing and Insuring ("FRI") leases with Approved Providers (being Housing
Associations, Local Authorities or other regulated organisations in receipt of
direct payment from local government). The portfolio comprises investments
into properties which are already subject to a lease with an Approved
Provider, as well as forward funding of pre-let developments but does not
include any direct development or speculative development.
There is increasing political pressure and social need to increase housing
supply across the UK which is creating opportunities for private sector
investors to help deliver this housing. The Group's ability to provide forward
funding for new developments not only enables the Company to secure fit for
purpose, modern assets for its portfolio but also addresses the chronic
undersupply of suitable supported housing properties in the UK at sustainable
rents as well as delivering returns to investors.
The Company is a UK Real Estate Investment Trust ("REIT") listed on the
premium segment of the Official List of the UK Financial Conduct Authority and
is a constituent of the FTSE EPRA/NAREIT index.
Additional information on regulation
The Specialised Supported Housing sector is regulated by the Regulator who
carries out assessments on registered providers either through a scheduled
In-depth assessment ("IDA") or reactive engagement. When a registered provider
passes the 1,000-unit threshold, it automatically becomes subject to a
detailed IDA by the Regulator. The IDA assesses compliance with the
requirements of the Governance and Financial Viability Standard. The outcome
of an IDA results in the Regulator publishing a formal grading (V 1-4 for
Viability and G 1-4 for Governance, where V1-2 and G1-2 are considered
"compliant" ratings, and V3-4 and G3-4 are considered "non-compliant"
ratings), known as a regulatory judgement.
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