Editor: Civitas released a strong trading update recently, highlighting that 99% of rent was collected this past year and announcing an uptick in its dividend target for 2022. It was another indication of social housing REITs’ continued outperformance against other property REITs.

Social homes

Source: Shutterstock/Wei Huang

Civitas and the other leading listed entity in this area, Triple Point Social Housing REIT, have both been delivering vital capital into a social housing sector that is crying out for more investment.

Nowhere is this more the case than in the specialised supported housing (SSH) sector. There is a fundamental need for more SSH places now – and that need is expected to increase substantially.

Mencap-commissioned research estimates the total number of SSH units at between 22,000 and 30,000, with an expectation that the demand will increase to between 25,500 and 33,500 units by 2021-22 and 29,000 to 37,000 units by 2027-28.

As the need grows, so does the investment opportunity. Investment in social housing offers an attractive and predictable long-term inflation-linked income return to investors, with the potential for capital growth, while also delivering a positive social return.

It provides much-needed private investment capital to support the delivery of additional, care-based, quality accommodation, improving tenant-life outcomes compared with the alternatives of residential care or hospitals in a cost-effective manner.

Overall market demand relative to supply will continue to drive growth in 2021, and with rent collection unaffected by the Covid-19 pandemic, the SSH REITs should continue to offer investors strong dividends.

Social housing REITs can offer the long-term, steady, inflation-linked income investors seek at the same time as delivering positive impacts for society – a win-win for all.

Rob Murphy, managing director, financials, Edison Group