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Social housing Reits: is the income risk-free?

A new Reit aimed at homelessness provision may provide ESG and dividend attractions for investors, but the broader sector may not be as secure as it seems
September 23, 2020

Real estate investment trusts (Reit) that have continued to pay dividends throughout the pandemic are a rarity. Social housing Reits Civitas Social Housing (CSH) and Triple Point (SOHO) are among them, as rent collection rates have continued undisturbed, unlike those of landlords in the retail and office sectors.

It is perhaps unsurprising that Alvarium Fund Managers has been undeterred by the current market tumult in planning to launch an IPO on the main segment of the London Stock Exchange on 12 October. Home Reit (HOME) hopes to raise £250m to invest in assets used to provide accommodation to the homeless. Retail investors are able to participate in the Home Reit IPO by subscribing for a minimum £1,000 in shares and must have lodged their applications with intermediaries by 6 October.

The need for additional provision for homeless accommodation has been given added impetus following the outbreak of Covid-19, given the added strain placed upon household incomes. Research from housing charity Shelter has shown that there are 223,000 households who are in rent arrears from the start of the coronavirus pandemic. While the ban on residential evictions was extended – and a six-month notice period put in place until at least 31 March – that was lifted on 20 September.

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