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Civitas eyes more funds as it puts £350m to work

Civitas eyes more funds as it puts £350m to work

Civitas (CSH) is considering another capital raise to fund a pipeline of social housing properties less than a year after raising £350 million in an oversubscribed initial public offering (IPO).

In a note to the stock market the social housing real estate investment trust (Reit) said it had already invested £284 million of the £350 million raised but has investment opportunities with a value of more than £160 million under exclusivity.

The £366 million fund will complete its due diligence on the investments in coming weeks and if they are deemed a good fit, the remaining £66 million from the IPO will be used to part-fund purchases.

Civitas has also signed a heads of terms for a debt facility of £90 million, which is expected to be put in place at the end of October. In the IPO prospectus, Civitas said it would look to place long-term debt of around 10 years and the fund has limited gearing of 40% of gross assets.

The stock market announcement also detailed a number of ‘off-market opportunities’ for a ‘significant number of additional built social homes’ with a value above the amount Civitas has left.

‘This significant pipeline is expected to grow further over coming weeks,’ said the company. ‘As a result, and to capitalise on these new opportunities, the company is now considering its options for raising additional equity capital.’

The company recently acquired 11 properties for £5.8 million, building its portfolio of social homes in England and Wales to 282 properties, 1,820 tenants, 10 housing associations, and 50 care providers.

It has proven popular with investors who are piling into alternative assets in the hunt for income and the trust currently trades at a premium of 7.1%.

Civitas chairman Michael Wrobel said the company was ‘on-track to be fully invested within the timescales indicated at IPO’.

‘In a short time, the company has established itself as a leading owner of built social homes, providing a very considerable number of people with high quality homes that suit their particular needs on a long-term basis.’

He said the trust ‘now has the potential to strengthen the position further through additional investment’.

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