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Civitas Social Housing acquires 10 care homes across the Midlands in £11.5m deal

Civitas Social Housing plc has acquired a portfolio of 10 care homes across the Midlands in a deal worth £11.5 million.

The company said it has exchanged contracts on the deal to buy the properties, which are managed by Inclusion Housing Association (IHA).

The properties in this portfolio have been used to deliver care for over twenty years, Civitas said, and are fully operational which, on completion, will immediately generate income with an initial net yield of 6.3%, based on the purchase price (excluding purchase costs). Completion is anticipated to be within two months.

Each of the properties within the portfolio is subject to a 30-year lease arrangement with IHA with rents adjusted annually by CPI+1% over the full period and Lifeways Community Care Limited (“Lifeways”) providing the care.

IHA specialise in renting and operating social housing and currently manage over 1,200 properties across 59 local authorities. It provides principally specialist supported accommodation designed to meet a range of housing needs for adults with learning disabilities, mental health and acquired brain injuries. Support is given to tenants daily from specialist support providers with whom they partner.

Lifeways, a registered care provider regulated by the Care Quality Commission (CQC), specialise in providing support and care to a wide range of people with learning disabilities and other complex needs. Lifeways works with local authorities and clinical commissioning groups to structure accommodation and support packages tailored to individual needs. The Lifeways Group support more than 6,000 tenants and individuals and employs more than 10,000 staff.

The portfolio was funded through the company’s cash resources. In due course, it is intended that leverage will be applied to this portfolio in accordance with the company’s stated policy and it is expected that this will further enhance the yield achieved from this investment.

The social homes owned by Civitas are provided on a long-term basis to housing associations with a wide range of tenants who vary in age profile and in the level of support that each receives.

By acquiring these social homes, and working with housing associations, Civitas said it seeks for tenants to experience a “stable, high-quality living environment that offers good visibility of tenure”. Furthermore, Civitas says it promotes “additionality” by the provision of new equity capital that has the potential to be redeployed in the delivery of new social homes.

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