Portfolio update: Inclusion Housing CIC

15 February 2019

Triple Point Social Housing REIT plc

(the "Company" or, together with its subsidiaries, the "Group")

Portfolio update - Inclusion Housing CIC

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 Inclusion Housing Community Interest Company ("Inclusion").

Inclusion, a registered provider focused on the supported housing sector, has 1,861 social housing units under management (as at 31 December 2018) and, as announced by the Company on 30 May 2018, has been subject to an in-depth assessment ("IDA") by the Regulator having gone through the 1,000 social housing units under management threshold. The outcome of the IDA is that Inclusion has been graded 'non-compliant' with a V3 rating for viability and a G3 rating for governance.  

The Company's delegated investment manager, Triple Point Investment Management LLP (the "Manager"), has worked with Inclusion for over four years and has developed a good working relationship with Inclusion's management team.  As the number of units Inclusion has under management has grown, Inclusion's business has evolved, together with its governance and compliance policies and the Manager has monitored the business closely through this growth period.  The Manager receives monthly management accounts from Inclusion and is satisfied that Inclusion continues to be a well-run business with a strong and experienced management team. 

The Company has 60 assets leased to Inclusion, representing approximately 21 per cent. of the Company's property portfolio (by value) as at 31 December 2018.

The Manager has liaised with the Company's independent valuer, Jones Lang LaSalle Limited, who has confirmed that there should be no impact on the value of the Company's property portfolio as a result of the non-compliant rating.

The Board and the Manager understand the Regulator's focus on ensuring that the lease model is financially robust and able to withstand adverse scenarios; and the judgment notes that Inclusion is currently able to meet its commitments as and when they fall due.  Inclusion continues to meet all of its obligations, including rent payments, under the terms of the leases with the Company. 

As with all properties acquired for the Company's portfolio, the Manager confirmed local demand, the suitability of the rental levels and the quality of those assets owned by the Company and leased to Inclusion at the time of acquisition.  Given the ongoing local authority support and the contractual obligations of the care providers attached to the properties, the Manager and the Board remain of the view that these are attractive assets.  

FOR FURTHER INFORMATION ON THE COMPANY, PLEASE CONTACT:

The Company's LEI is 213800BERVBS2HFTBC58.

Further information on the Company can be found on its website at 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 assets within the portfolio are subject to inflation-adjusted, long-term (typically from 20 years to 30 years), 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 an FRI 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 and financial pressure on Housing Associations to increase their housing delivery and this is creating opportunities for private sector investors to participate in the market. The Group's ability to provide forward financing 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.

Triple Point Investment Management LLP (part of the Triple Point Group) is responsible for management of the Group's portfolio (with such functions having been delegated to it by Langham Hall Fund Management LLP, the Company's alternative investment fund manager).

The Company was admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange on 8 August 2017 and 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. The Company operates as a UK Real Estate Investment Trust ("REIT") and is a constituent of the FTSE EPRA/NAREIT index.