Social Housing REIT (SOHO) is a UK-listed real estate investment trust with a highly diversified portfolio of specialised supported housing (SSH) assets, providing good-quality, long-term accommodation for vulnerable adults who may have mental health issues, learning difficulties or physical disabilities. SSH is a particular type of social housing which is differentiated by offering significantly adapted or purpose-built homes, within which residents can live independently with care and support. For shareholders, SOHO aims to continue delivering an attractive, growing and predictable long-term income return. As a provider of essential social infrastructure assets, SOHO is an ‘impact investor’ and seeks to deliver a positive social benefit, utilising much-needed private investment capital to increase the provision of new SSH homes, which deliver positive outcomes for residents in a cost-effective manner.

There are five compelling reasons why SOHO represents an attractive investment opportunity.

1. SOHO operates within a structurally supported sector.

There is a chronic shortage of available SSH homes in the UK and it is widely expected that the demand will continue to increase, driven by a growing and ageing population and a greater penetration of the existing population in need. The social and economic benefits of SSH are widely recognised, including by successive governments, and there is no current indication that this is likely to change. SSH provides better outcomes for residents, at a significantly lower cost than the alternatives of care homes or long-stay hospitals, saving vital money for the public purse in an era of constrained budgets.

2. The portfolio is large, diversified and focused on high-intensity needs, supporting resilient long-term occupancy.

SOHO owns a diversified portfolio of almost 500 homes, across over 150 local authorities, let to 28 approved provider lessees who manage the properties. The portfolio provides homes for more than 3,400 vulnerable adults. Third-party care within the homes is provided by over 100 different providers, tailored to residents’ individual needs. To provide sustainable long-term income it is important that homes are well-located, suitably adapted, in areas where referral demand is strong and let at appropriate levels of rent offering value to the public purse.

Atrato Partners was appointed as the new investment manager at the start of 2025 and its review of the portfolio found only a handful of properties that do not meet these investment criteria. Atrato’s approach involves managing the portfolio of operational assets more intensively and proactively, with advanced plans already underway to resolve remaining two inherited tenant issues. Its approach is also intended to mitigate the risk of future issues at either a property or counterparty level.

3. SOHO’s recovery is gaining traction, with improving earnings and dividend cover.

SOHO’s H125 results marked a clear improvement in financial performance, following a challenging period linked to tenant issues, and better reflect the attractive cash flows that SSH can deliver. SOHO’s homes are fully let on long-term, inflation-linked leases, with approved providers that collect rents from residents through government-funded housing benefit via local authorities. Managing tenant credit quality and operational performance is key to translating the sector’s strong fundamentals into attractive returns for shareholders.

Under Atrato’s management, adjusted earnings increased by more than 20% y-o-y, supported by improving rent collection, lower costs (including the move to a market capitalisation-based management fee) and long-term fixed rate debt that is attractively priced against market rates. The dividend was increased by 3% during 2025 (the first uplift since FY22) and was 1.2x covered.

4. SOHO offers strong inflation linkage through long-dated, triple-net leases, differentiating it within UK listed social infrastructure.

SOHO’s leases are typically long (over 20 years at inception) and offered on a fully repairing and ensuring basis, providing high visibility of income and limiting landlord cost exposure. All contracted rents are reviewed annually and are 100% inflation-linked, almost 90% of which benefiting from no caps. The lease structures are aligned with the latest government rent settlement (CPI+1% annually from 2026 to 2036). While the funding chain involves approved providers as an intermediate counterparty, the underlying rent stream is ultimately funded by government-sourced housing benefit and a long-term policy commitment to supported living.

5. A high yield, conservative fixed-rate debt and a wide discount to EPRA net tangible assets (NTA) provide both income and potential capital upside.

SOHO targets an FY25 dividend of 5.62p, equating to a yield of over 7% at the current share price. Borrowings are fully fixed at a blended cost of 2.74%, with a weighted average maturity of c 8 years and no refinancing requirement until 2028. Net loan-to-value of 39% sits within the company’s medium-term target (40%) and, in June 2025, Fitch has reaffirmed SOHO’s issuer default rating of ‘A-’.

SOHO trades at a material discount to EPRA NTA (H125 EPRA NTA of 95.6p per share), providing significant scope for a rerating. The catalysts for this are likely to be a continued improvement in rent collection and earnings and improving investor sentiment towards the sector. Alongside its measures to enhance the performance of the portfolio, Atrato is also exploring options to develop lease structuring solutions that would further reduce lessee risk by effectively ring-fencing the rents received by lessees in respect of SOHO properties. If successful, this would represent a step change in the quality of the company’s cashflows.

Summary

SOHO offers investors exposure to a diversified portfolio of SSH assets, a critical part of the UK’s social housing infrastructure, where demand is underpinned by demographic trends and is uncorrelated with the wider economy. SOHO benefits from income streams which are ultimately government funded and provides significant inflation protection for investors. Atrato is already making strong progress with improving the performance of the SOHO portfolio, increasing earnings and dividends but material upside potential remains. Increased earnings and a re-rating will be a potent cocktail for dividend-led investor returns.

Published 12 February 2026