Social Housing Reit Plc · LSE:SOHO
Social Housing Reit — Triple Point Social Housing REIT — H1 2020 Earnings Presentation
36 slides from Social Housing Reit's earnings presentation, Sep 30, 2020
Slide 1: Supported Housing in the UK: Results for the six months ended 30 June 2020
Supported Housing in the UK Results for the six months ended 30 June 2020 30 September 2020 1
Slide 2: Contents
Contents Section Page Triple Point Social Housing REIT plc Board Financial Overview 5 CHRIS PHILLIPS IAN REEVES CBE TRACEY FLETCHER-RAY PETER COWARD PAUL OLIVER Operational Overview 12 Chairman Senior Independent Non-Executive Director Non-Executive Director Non-Executive Director Director Triple Po
Slide 3: High Impact Investment Strategy
High Impact Investment Strategy Specialised accommodation for individuals who have Sadler Road Winsford their rent funded by central government 100% rent collection during H1 2020 and continues to be received on a timely basis Demand / supply inbalance for new specialised supported homes Target divi
Slide 4: Key Performance Indicators
Key Performance Indicators1 404 £28.0m £510.3m 5.30% Properties Annualised Rental Income IFRS Valuation Valuation Net Initial Yield (31 December 2019: 388) (31 December 2019: £25.4m) (31 December 2019: £471.6m) (31 December 2019: 5.27%) Providing 2,872 homes for vulnerable Excludes ongoing forward f
Slide 5: Financial Overview
Financial Overview 5
Slide 6: Statement of Comprehensive Income
Statement of Comprehensive Income For six months ended Year ended 30 June 2020 £’000 30 June 2019 £’000 31 December 2019 £’000 23.2% EPRA COST RATIO Rental Income 13,372 9,348 21,112 (30 June 2019: 31.0%) Total expenses (3,105) (2,901) (5,985) 1.61% Gross profit 10,267 6,447 15,127 ONGOING CHARGE RA
Slide 7: Rental Income and Dividend Cover
Rental Income and Dividend Cover Following the further acquisitions and forward funding completions after the period end, the look through dividend cover has increased to 1.02x as measured on an EPRA earnings run-rate basis £32.0m 1.02x2 0.95x2 Annualised Rental Income £30.0m 0.94x1 0.86x1 £30.4m £2
Slide 8: Statement of Financial Position
Statement of Financial Position For six months ended Year ended 30 June 2020 30 June 2019 31 December 2019 33.1% £’000 £’000 £’000 CONSOLIDATED GROUP LTV (31 December 2019: 31.1%) Investment property (IFRS 511,016 396,567 472,349 valuation) Trade and other 4,288 2,271 4,287 receivables Cash and cash
Slide 9: Fund Trajectory
Fund Trajectory Cumulative Return since IPO including dividends 125.00% 125.00p +20.13% 120.00% 120.00p NAV plus Cumulative Dividend Paid per Share Cumulative Accounting Return 115.00% 115.00p 12.39p 110.00% 9.81p 110.00p 7.27p 4.75p 105.00% 105.00p 2.25p 100.00% 105.37p 105.34p 100.00p 103.65p 103.
Slide 10: Property Valuation
Property Valuation1 Acquisitions in the portfolio of £476.1 million2 which have been valued by JLL as at 30 June 2020: • IFRS Property Valuation: Independently valued at £510.3 million, an uplift of 7.2% against total invested funds of £476.1 million • Portfolio Premium Valuation: Independently valu
Slide 11: Debt Overview
Debt Overview To date SOHO has secured two debt facilities with an aggregate value of £198.5m SOHO will have fully drawn the £130m RCF during October to bring leverage closer to the target 40% Both facilities represent a conservative leverage position and maintain sufficient covenant headroom SOHO i
Slide 12: Operational Overview
Operational Overview 12
Slide 13: Investment Highlights in the Period
Investment Highlights in the Period MAR - MAY 15 MAY POST PERIOD ACQUISITIONS Forward Funding Completions Broker £19.8 million1 Three forward funding schemes completed in Cheshire, Scunthorpe and Northampton Appointment Acquired a further 30 comprising a total of 49 units: Appointed Stifel Nicolaus
Slide 14: Deployment Pipeline
Pipeline SOHO has a pipeline in excess of £150m through existing relationships with developers, Approved Providers, care providers and local authorities Pipeline is focused on Specialised Supported Housing and comes through trusted relationships so has a high level of deliverability £50m £40m £30m D
Slide 15: High Quality Portfolio
High Quality Portfolio SOHO’s investment strategy focuses on bringing new properties into the social housing sector Properties are developed to respond to identified local authority need Homes are adapted to reflect the specific care needs of vulnerable individuals Delph Crescent Lammas Road Oak Hou
Slide 16: Geographically Diversified Portfolio
Geographically Diversified Portfolio1 % of funds Region Properties Units Invested2 North West 91 692 21.1 West Midlands 60 450 16.3 2 Scotland East Midlands 53 404 13.5 London 26 198 10.9 44 North East North East 44 341 9.9 91 North West South East 51 242 9.7 32 Yorkshire Yorkshire 32 253 8.9 South
Slide 17: Approved Provider Diversification
Approved Provider Diversification1 As at 30 June 2020, SOHO had 18 lessees most of whom are specialist Registered Providers that focus exclusively on managing Specialised Supported Housing properties Care is provided separately by care providers who are contracted with, and paid by, local authoritie
Slide 18: Adding Value through Forward Funding
Adding Value through Forward Funding1 SOHO had undertaken 22 construction projects with a total funding commitment of £56.2m West Bowling Green 15 of which were completed on budget and 7 remained under construction Edinburgh Funding Commitment and Completion Status Bradford £2.5m Completed Post-Peri
Slide 19: Sector Resilience to Covid-19
Sector Resilience to Covid-19 Tenant Safety • Care providers have faced considerable operational challenges but have continued to deliver care and support • Approved Providers cancelled all but essential maintenance, non-essential repairs are now being caught up • Policies were put in place to preve
Slide 20: Portfolio Resilience to Covid-19
Portfolio Resilience to Covid-19 Operational • Catalyst for further integration between the NHS and social care sector with increased demand for SSH from local authorities and NHS • Communication with Approved Providers and care providers even more frequent than usual to identify and monitor any ope
Slide 21: Investment Process: ESG and Impact Assessment
Investment Process: ESG and Impact Assessment ESG policy developed in conjunction with The Good Economy and metrics to measure performance tracked Six impact objectives have been defined to measure the impact of each investment, where each objective has a set of metrics to measure success FUND SUSTA
Slide 22: Sector Overview
Sector Overview 22
Slide 23: Specialised Supported Housing Fundamentals
Specialised Supported Housing Fundamentals There is a systemic undersupply of social housing in the UK Excess demand for Specialised Supported Housing is acute and increasing Growing demand for Growing population and Specialised Supported increasing prevalence of Housing is forecast to reach disabil
Slide 24: Chain of Covenant – Provision of Rent
Chain of Covenant – Provision of Rent for Individuals in Specialised Supported Housing Individuals living in Specialised Supported Housing have their rent funded by central government through housing benefit Housing benefit consists of a core rent and a service and maintenance charge which contribut
Slide 25: Chain of Covenant – Provision of Care
Chain of Covenant – Provision of Care The local authority is responsible for contracting and paying for the care received by individuals in Specialised Supported Housing The cost of the care is paid for out of the local authority’s devolved social care budget which is allocated by the MHCLG Vulnerab
Slide 26: Outlook
Outlook LN ZS LN LN, YN LN 4 LN ZN “4 LN LN IS. (S4N4 4S: SN LN LN EN
Slide 27: Outlook
Outlook • Care providers and Approved Providers have overcome operational challenges to ensure consistency of care, support and housing provision • The Regulator reported that “despite the challenges of lockdown, the sector remained financially strong with access to sufficient finance” • 100% rent c
Slide 28: Appendix
Appendix 28
Slide 29: Investment Process: Approach to Due Diligence
Investment Process: Approach to Due Diligence Our process evolves constantly to learn from property management and market changes. There are three key areas of focus Impact & which are mutually reinforcing: Asset Financial Quality There is an increasing need for the UK social Performance housing sec
Slide 30: Investment Process: Core Due Diligence
Investment Process: Core Due Diligence Core Due Investment Property Deal Origination DDQ with Impact Trustee Approval Diligence Committee Management Assessment Approval Over half the deals that we start due diligence on are rejected during the investment process (c.£650m) 30
Slide 31: Asset Management
Asset Management The Triple Point asset management team has made three new hires since the start of 2020. The team continues to focus on property inspections and maintaining strong relationships with care providers and Approved Providers. Rent Monitoring Data Collection Relationship Property RP Coll
Slide 32: SOHO Board
SOHO Board Chris Phillips, Chairman Extensive experience of real estate and listed companies. Of note, Chris’ role at Colliers where, after heading up its residential consultancy business, he became the first Managing Director of Colliers Capital UK Limited (Colliers commercial real estate property
Slide 33: Investment Manager Team Overview
Investment Manager Team Overview BEN BEATON JAMES CRANMER Managing Partner Managing Partner 130 STAFF 28 INVOLVED WITH SOHO ASSET & FUND INVESTMENT LEGAL COMPLIANCE MANAGEMENT MAX SHENKMAN ISOBEL GUNN-BROWN JUSTIN HUBBLE MICHAEL BAYER 11 STAFF 10 STAFF 3 STAFF 33
Slide 34: Key Terms
Key Terms UK listed REIT The Company London Stock Exchange Main Market, Premium Segment Management Triple Point Investment Management LLP as Investment Manager • the Group will only invest in social housing assets located in the United Kingdom • the Group will only invest in social housing assets wh
Slide 35: Glossary
Glossary Term Definition Approved Provider a housing association, local authority or other regulated organisation in receipt of direct payment from local government including a care provider; Board the Directors of the Company from time to time; Company Triple Point Social Housing REIT plc (company
Slide 36: Disclaimer
Disclaimer This presentation, including any oral presentation, any question or answer session and any written or oral material discussed or distributed during the presentation meeting (together, "this presentation") is for general information only regarding Triple Point Social Housing REIT plc (the
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