CornmillHouse-189

Delivering growth as expected

Triple Point Social Housing REIT 25 March 2021 Update
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Triple Point Social Housing REIT

Delivering growth as expected

FY20 results update

Real estate

25 March 2021

Price

102p

Market cap

£411m

Net debt (£m) as at 31 December 2020

145.6

Gross gearing at 31 December 2020 (gross debt/gross assets)

31.5%

Shares in issue

402.8m

Free float

99%

Code

SOHO

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(4.3)

(5.6)

16.4

Rel (local)

(5.0)

(8.9)

(9.6)

52-week high/low

114p

87p

Business description

Triple Point Social Housing REIT (SOHO) invests in primarily newly built and newly renovated social housing assets in the UK, with a particular focus on supported housing. The company aims to provide a stable, long-term inflation-linked income with the potential for capital growth.

Next events

FY21 half year-end

30 June 2021

Analyst

Martyn King

+44 (0)20 3077 5745

Triple Point Social Housing REIT is a research client of Edison Investment Research Limited

The supported housing sector has proved resilient during the pandemic, providing an essential service, complementary to the NHS. This was reflected in Triple Point Social Housing REIT’s (SOHO) strong FY20 performance. Full rent collection and continuing investment is bringing much-needed new supply to the sector. We expect acquisitions, rent indexation and development completions to drive further strong earnings growth, supporting a continuation of the progressive dividend policy.

Year end

Total income (£m)

Adj. earnings* (£m)

Adj. EPS*
(p)

EPRA NTA per share (p)

DPS
(p)

P/NAV
(x)

Yield
(%)

12/19

21.1

12.3

3.50

105.4

5.10

0.97

5.0

12/20

28.9

17.7

4.90

106.4

5.18

0.96

5.1

12/21e

33.9

21.8

5.41

108.8

5.28

0.94

5.2

12/22e

36.1

23.7

5.87

112.3

5.39

0.91

5.3

Note: *Adjusted earnings is a excludes property revaluation movements and amortisation of loan arrangement fees. There is no difference between basic and fully diluted EPS and NAV.

Available capital and strong pipeline

This note updates our January initiation note for the FY20 results. As expected, SOHO delivered strong growth in assets and earnings, supporting uninterrupted dividends. Adjusted earnings increased 44% and adjusted EPS by 40% to 4.9p with DPS of 5.18p (+1.7%). EPRA net tangible assets (NTA) per share increased by 1.0% to 106.4p and including DPS paid the EPRA NTA total return was 5.9%. On a look-through run-rate basis, DPS was fully covered by August, before October’s £55m (gross) equity raise. The company intends to maintain its progressive dividend policy in the current year and we expect full cover by adjusted earnings on a reported basis as capital resources are deployed into a strong acquisition pipeline (opportunities in excess of £150m). Our forecasting assumptions are little changed, other than assuming forward-funded developments as well as completed assets within capital deployment. This defers earnings and cash flows slightly but adds attractive, purpose-built assets to the stock.

Positive outcomes driving demand

The chronic shortage of supported housing is widely forecast to increase, yet compared with the alternatives of residential care or hospitals, it improves lives in a cost-effective manner. It can also relieve pressures on the health service and at both the national and local level it is government policy to offer supported housing to more people. Private capital is crucial in meeting current and future needs, while the continued response of the lessee/approved providers to regulatory scrutiny, improving governance, operational performance and financial strength should be a positive factor for sustaining the security of contracted rents and long-term growth of the sector.

Valuation: Robust, attractive, growing income

The FY20 DPS of 5.18p represents a yield of 5.1%, with good prospects for indexed growth. Combined with robust rent collection, this is in our view attractive in a continuing low interest rate environment. The shares currently trade at slightly below NTA, in line with the average since IPO (c 0.96x) but below the peak (1.07x).

Investment summary

The FY20 results were in most respects slightly ahead of our forecasts, with strong, resilient growth driven by the expanding and increasingly diversified portfolio.

Exhibit 1: Summary of FY20 financial performance

£m unless stated otherwise

H120

H220

FY20

FY19

FY20/FY19

Edison FY20 forecast

Total income

13.4

15.6

28.9

21.1

37.0%

28.0

Total expenses

(3.1)

(3.5)

(6.6)

(6.0)

10.4%

(6.3)

Operating profit before revaluation of properties

10.3

12.1

22.3

15.1

47.6%

21.7

Change in fair value of investment properties

1.5

6.4

7.9

11.8

6.2

Operating profit

11.8

18.5

30.2

26.9

27.9

Net finance expense

(2.8)

(2.8)

(5.6)

(3.2)

74.6%

(5.6)

PBT & net profit

9.0

15.6

24.6

23.7

22.3

Adjusted for:

Change in fair value of investment properties

(1.5)

(6.4)

(8.0)

(11.8)

(6.2)

EPRA earnings

7.4

9.2

16.6

11.9

39.7%

16.1

Interest capitalised on forward funded developments

(0.1)

(0.0)

(0.1)

(0.1)

(0.1)

Amortisation of loan arrangement fees

0.5

0.6

1.2

0.5

1.1

SOHO adjusted EPRA earnings

7.9

9.8

17.7

12.3

43.6%

17.1

Basic & diluted IFRS EPS (p)

2.55

4.21

6.82

6.75

6.16

Basic & diluted EPRA EPS (p)

2.12

2.48

4.61

3.39

35.9%

4.45

SOHO adjusted EPRA EPS (p)

2.25

2.64

4.90

3.50

39.7%

4.73

DPS (p)

2.59

2.59

5.18

5.10

1.7%

5.18

Dividend cover (adjusted earnings)

0.87

1.02

0.95

0.69

0.91

IFRS portfolio value

511.1

572.2

572.2

472.3

21.1%

580.3

Gross borrowings

(185.1)

(198.5)

(198.5)

(169.1)

(198.5)

Cash

43.5

53.7

53.7

67.7

48.4

Net assets

369.6

428.7

428.7

369.7

426.6

IFRS & EPRA NTA per share (p)

105.3

106.4

106.4

105.4

1.0%

105.9

Gross gearing (gross debt/gross assets)

33.1%

31.5%

31.5%

31.1%

31.3%

Net LTV (net debt/portfolio valuation)

27.8%

25.5%

25.4%

22.1%

25.9%

Source: SOHO historical data, Edison Investment Research FY20 forecast

In brief we note that:

Total income increased by 37%, driven primarily by a partial contribution from acquisitions in the year and a full-year contribution from prior year acquisitions, forward-funding development completions and rent indexation (100% of the portfolio indexed to either RPI or CPI).

Administrative expenses grew at a much slower pace of 10%. Investment management fees, representing almost two-thirds of the total and linked to net asset value, increased by 6.0%. Much of the asset growth was funded by debt drawdown, although the October 2020 equity raise lifted net asset value.

Increasing operational gearing is reflected in the reduced EPRA cost ratio to 22.3% (FT19: 28.4%).

Finance costs increased with debt drawdown but adjusted earnings increased by 44% to £17.7m and adjusted EPS by 40% to 4.9p. Reported dividend cover for the year increased to 95% (FY19: 69%), with full cover on a look-through run-rate basis in August, ahead of the equity raise.

The net change in the fair value of investment properties was £7.9m. This included a gross gain on investment properties of c £10.8m (c 2.4% of the opening value) and a c £0.9m gain on development completions, partly offset by c £3.8m of acquisition costs written off.

IFRS and EPRA NTA per share increased 1.0% to 106.4p.

Continuing strong, targeted portfolio growth

At 31 December 2020 (FY20) the SOHO portfolio was valued at £571.5m, a 7.7% uplift on total funds invested (including acquisition costs) of £503.7m, and reflecting a 5.27% IFRS valuation yield. At that date the portfolio comprised 445 properties with annualised contracted rents of £32.1m (excluding agreed rents on the forward funding schemes that remained under development). The properties were fully let to 20 different approved providers (mostly housing associations specialising in supported housing) that manage them to provide homes for more than 3,000 tenants, with care provided by 98 care providers. The weighted average unexpired lease term (WAULT) was a long 26.2 years with all the properties let on fully repairing and insuring leases (FRI leases, under which the lessee is responsible for the cost of property maintenance and insurance and property taxes) with upward-only, annual inflation-linked rent increases.

Exhibit 2: Portfolio summary

£m unless stated otherwise

FY20

FY19

31-Dec-20

31-Dec-19

Capital deployed (inc. acquisition costs)

530.7

438.9

Portfolio value

571.5

471.6

Portfolio value uplift on capital deployed

7.7%

7.5%

Annualised rental income

31.6

25.4

Annualised rental income including forward funding developments in progress and exchanges)

32.1

27.8

Valuation net initial yield*

5.27%

5.27%

WAULT (years)

26.2

25.7

Number of properties

445

388

Number of units

3,124

2,728

Number of tenancies*

341

300

Number of approved providers*

20

16

Number of local authorities*

155

149

Number of care providers

98

88

Source: SOHO data. Note: *Calculated excluding forward-funded developments in progress.

The pandemic caused some initial delays in the deployment of funds during FY20, with the uncertainty of the initial lockdown having a particular impact on Q220. However, once the initial shock of the lockdown had passed and operating conditions stabilised, it once again became possible to acquire or develop properties. Supported housing commissioners continued referring residents wherever possible, to relieve pressure on the NHS, and local authorities continued to pay rent and care fees to providers to ensure the viability of essential services. During the year, 58 properties (400 units) were acquired for a total investment cost of £78.9m (including costs), with the majority in H220. Additionally, despite some temporary pandemic delays caused by labour and materials shortages, nine of the 22 forward funding projects that SOHO has entered into to date completed during the year (11 previously) with two remaining (outstanding commitment of £2.8m), both of which have now completed. So far in FY21, SOHO has announced the acquisition of eight supported housing properties (75 individual units) for an aggregate consideration of just under £15m before costs (the £2.9m acquisition includes costs and the £12.1m acquisition is before costs).

Exhibit 3: Continuing portfolio growth

Source: SOHO data to end-FY20. Note: Total committed funds includes properties where contracts have been exchanged as well as outstanding forward-funded development commitments.

As the portfolio has grown, it has become increasingly diversified by property, region and approved provider. During FY20, a net four new approved providers were added including the removal of its exposure to Westmoreland, supporting its significant stock rationalisation programme as it seeks to meet the requirements of the Regulator of Social Housing (RSH). Of the 15 properties that had been leased to Westmoreland, 14 have been or are in the process of being transferred to existing approved provider tenants, and one smaller property disposed of. The completed transfers of 12 of the properties had no impact on the care provided to residents nor any material impact on valuations.

More generally, the RSH paused its ongoing review of the specialised supported housing sector for a time during 2020, allowing providers to focus on operations and on managing the challenges of the pandemic. Once the full lockdown had eased in the summer, regulatory engagement recommenced and this has been followed by several regulatory notices and judgements across the sector. In December 2020, MySpace became the fifth SOHO lessee subject of regulatory judgements or notice. Most recently, Hilldale Housing Association and Pivotal Housing Association have both been the subject of reviews by the RSH and in both cases have been deemed non-compliant with regard to elements of the regulator’s governance and financial viability standards. SOHO welcomes this ongoing regulatory review, bringing as it does higher levels of accountability and transparency. The social housing sector has traditionally had a low financial risk profile, in part due to the ongoing monitoring presence of the regulator and the fact that much of the rent is funded by central government through housing benefit and latterly universal credit, directed towards some of the most vulnerable in society. With support from SOHO, the organisations affected by regulatory judgements and notices have shown tangible signs of improvement over the past year and it is important to note that there has been no impact on rent collection or negative impact on the external valuations of the properties owned by SOHO.

Exhibit 4: Rental income by approved provider

Source: SOHO data as at 31 December 2020. Note: ‘Others’ includes Sunnyvale 1.4%; Sandwell 1.3%; Wings Care 0.9%; IKE 0.8%; Lifeways 0.7%; Pivotal 0.7%; IHL 0.7%; Encircle Housing 0.6%; TBC 0.2%; Keys 0.2%; and Partners Foundation less than 1%.

Strong acquisition pipeline for future growth

Through its established relationships with developers, approved providers, care providers and local authorities, SOHO continues to have a strong pipeline of supported housing investment opportunities, amounting to more than £150m and comprising standing assets (completed properties) and forward funding projects. The investment manager anticipates being able to complete on a significant proportion of these over time.

Exhibit 5: Pipeline of acquisition opportunities in excess of £150m

Source: SOHO data

Funding in place

With existing capital resources effectively fully deployed (including development commitments), in October 2020 SOHO issued £55m (gross) of new equity. In December 2020, this was complemented by a £30m increase in the group’s revolving credit facility (RCF).

SOHO now has aggregate debt facilities of £228.5m, comprising £68.5m of long-term, fixed-rate private placement loan notes and £160m of shorter-term, more flexible variable rate RCF jointly provided by Lloyds and NatWest. £30m of the RCF remained undrawn at end-FY20, while cash resources amounted to £53.7m. End-FY20 gross gearing (defined as aggregate borrowings as a percentage of gross assets) was 31.5% compared with a medium-term target of 35-40%. Our forecasts indicate an increase to around 34% by end-FY21 as the equity and debt capital resources are deployed.

Financials and valuation

The FY20 results were in most respects slightly ahead of our forecasts (Exhibit 6). The underlying changes to our FY21 and FY22 forecasts are relatively modest, although we have allocated a portion of the assumed capital commitment towards new forward-funded development projects with the impact that some of the growth that we expect in rental income is deferred until completion. This is captured in our first-time FY23 forecast. Due to operational gearing, the rent deferral has a more significant impact on FY21e and FY22e EPRA earnings and EPS. We expect DPS to increase broadly in line with inflation and to be covered by EPRA EPS from FY22.

Exhibit 6: Forecast revisions

 

Total income (£m)

EPRA earnings (£m)

EPRA EPS (p)

EPRA NAV/share (p)

DPS (p)

 

New

Old

% chg

New

Old

% chg

New

Old

% chg

New

Old

% chg

New

Old

% chg

12/21e

33.9

35.8

(5.2)

20.9

22.8

(8.7)

5.18

5.67

(8.7)

108.8

108.5

0.3

5.28

5.28

0.0

12/22e

36.1

37.8

(4.4)

22.7

24.5

(7.3)

5.64

6.09

(7.3)

112.5

112.5

(0.0)

5.39

5.39

0.0

12/23e

37.6

N/A

N/A

24.0

N/A

N/A

5.97

N/A

N/A

116.3

N/A

N/A

5.47

N/A

N/A

Source: Edison Investment Research

Importantly, we still expect DPS to be fully covered by adjusted (‘cash’) earnings from FY21. SOHO’s adjusted earnings measure is designed to provide a clearer picture of recurring cash earnings, and compared with EPRA earnings it excludes amortisation of loan arrangement fees and a small amount of capitalised interest in respect of forward-funded developments. A reconciliation is shown in Exhibit 9.

Exhibit 7: Adjusted EPS and dividend cover

 

Adjusted EPS (p)

Dividend cover (x)

New

Old

New

Old

12/21e

5.41

5.94

1.02

1.12

12/22e

5.87

6.35

1.09

1.18

12/23e

6.20

N/A

1.13

N/A

Source: Edison Investment Research

In our forecasts we have allowed for £75m of capital deployment (previously £72m) split between operational assets (£40m by end-H121) and new forward funding developments (£35m committed by end-FY21 with completion during FY22) at a yield of 5.9% (annualised rent/consideration before acquisition costs). We had previously assumed all new capital would be deployed into immediately income-generating completed assets.

Based on the aggregate FY20 DPS of 5.18p, SOHO offers a yield of 5.1%. With no COVID-19 impact on rent collection or dividend payments, we believe the yield is attractive in the context of a continuing low interest rate environment. The shares are trading at a small discount to end-FY20 NAV per share of 106.4p in line with the average c 4% discount since IPO but well below the peak premium of c 7%.

Compared with the peer group shown in Exhibit 8, SOHO’s yield is slightly above the group average, while its P/NTA is below the group average. Demographically driven long-term growth in demand for supported housing, support for the sector from both local and central government, robust rent collection during the pandemic and improvements in the financial strength, governance and operational performance of registered providers of supported housing in response to regulatory oversight are all positive indicators for a re-rating.

Exhibit 8: Peer valuation and performance comparison

Price
(p)

Market cap
(£m)

P/NTA*
(x)

Yield**
(%)

Share price performance

1 month

3 months

12 months

From 12M high

Assura

72

1725

1.27

3.9

-7%

-7%

-8%

-19%

Civitas Social Housing REIT

110

683

1.02

4.9

2%

6%

22%

-5%

Impact Healthcare

114

364

1.04

5.5

4%

5%

73%

-3%

Primary Health Properties

147

2082

1.30

4.1

-4%

-3%

0%

-12%

Residential Secure Income

93

159

0.89

5.4

3%

3%

14%

-4%

Target Healthcare

114

521

1.05

5.9

1%

0%

20%

-4%

Average

1.09

4.9

0%

1%

20%

-8%

Triple Point Social Housing REIT (SOHO)

102

409

0.96

5.1

-4%

-6%

16%

-11%

UK property sector index

1,613

-2%

0%

19%

-3%

UK equity market index

3,880

2%

5%

34%

0%

Source: Refinitiv. Note: Prices at 24 March 2021. *Based on last published EPRA NAV/NTA. **Based on 12-month trailing DPS declared.

Exhibit 9: Financial summary

Period ending 31 December (£m)

2017

2018

2019

2020

2021e

2022e

2023e

INCOME STATEMENT

Total income

1.0

11.5

21.1

28.9

33.9

36.1

37.6

Directors' remuneration

(0.1)

(0.3)

(0.3)

(0.3)

(0.3)

(0.3)

(0.3)

Investment management fees

(0.5)

(2.3)

(3.9)

(4.1)

(4.6)

(4.7)

(4.8)

General & administrative expenses

(0.4)

(1.9)

(1.8)

(2.2)

(2.2)

(2.2)

(2.3)

Total expenses

(1.1)

(4.5)

(6.0)

(6.6)

(7.1)

(7.3)

(7.4)

Ongoing charge ratio (OCR)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Operating profit/(loss) before revaluation of properties

(0.0)

7.0

15.1

22.3

26.9

28.9

30.2

Change in fair value of investment properties

5.6

14.5

11.8

7.9

10.1

13.5

13.5

Operating profit/(loss)

5.6

21.5

26.9

30.2

36.9

42.4

43.6

Net finance income/(expense)

0.1

(1.6)

(3.2)

(5.6)

(6.3)

(6.4)

(6.4)

PBT

5.7

19.9

23.7

24.6

30.6

36.0

37.2

Tax

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net profit

5.7

19.9

23.7

24.6

30.6

36.0

37.2

Adjusted for:

Change in fair value of investment properties

(5.6)

(14.5)

(11.8)

(8.0)

(10.1)

(13.5)

(13.5)

EPRA earnings

0.0

5.4

11.9

16.6

20.6

22.4

23.7

Interest capitalised on forward funded developments

0.0

0.0

(0.1)

(0.1)

0.0

0.0

0.0

Amortisation of loan arrangement fees

0.0

0.0

0.5

1.2

1.2

1.2

1.2

Adjusted earnings

0.0

5.4

12.3

17.7

21.8

23.7

25.0

Basic & diluted average number of shares (m)

143.8

237.6

351.1

360.9

402.8

402.8

402.8

Basic & diluted IFRS EPS (p)

3.94

8.37

6.75

6.82

7.60

8.93

9.23

Basic & diluted EPRA EPS (p)

0.02

2.27

3.39

4.61

5.11

5.57

5.89

Basic & diluted adjusted EPS (p)

0.02

2.29

3.50

4.90

5.41

5.87

6.20

DPS declared (p)

1.00

5.00

5.10

5.18

5.28

5.39

5.47

Adj. EPS/DPS

0.02

0.46

0.69

0.95

1.02

1.09

1.13

BALANCE SHEET

Investment properties

138.5

324.1

472.3

572.1

642.5

673.5

687.0

Other receivables

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Total non-current assets

138.5

324.1

472.3

572.1

642.5

673.5

687.0

Cash & equivalents

58.2

114.6

67.7

53.7

30.0

14.9

18.1

Other current assets

12.0

3.4

4.3

4.3

5.6

5.9

6.0

Total current assets

70.2

118.0

72.0

58.0

35.6

20.8

24.1

Trade & other payables

(5.9)

(9.0)

(8.1)

(5.0)

(12.3)

(12.9)

(13.2)

Other current liabilities

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Total current liabilities

(5.9)

(9.0)

(8.1)

(5.0)

(12.3)

(12.9)

(13.2)

Bank loan & borrowings

0.0

(67.4)

(165.0)

(194.9)

(226.2)

(227.4)

(228.7)

Other non-current liabilities

(1.2)

(1.6)

(1.5)

(1.5)

(1.5)

(1.5)

(1.5)

Total non-current liabilities

(1.2)

(68.9)

(166.5)

(196.4)

(227.7)

(228.9)

(230.2)

IFRS net assets

201.7

364.2

369.7

428.7

438.1

452.5

467.7

EPRA net assets

201.7

364.2

369.7

428.7

438.1

452.5

467.7

Period-end basic & diluted number of shares (m)

200.0

351.4

350.9

402.8

402.8

402.8

402.8

Basic & diluted IFRS NAV per share (p)

100.8

103.6

105.4

106.4

108.8

112.3

116.1

Basic & diluted EPRA NTA per share (p)

100.8

103.6

105.4

106.4

108.8

112.3

116.1

CASH FLOW

Net cash flow from operating activity

0.8

5.4

16.3

24.5

32.7

29.2

30.3

Cash flow from investing activity

(142.0)

(160.6)

(135.5)

(94.4)

(60.2)

(17.5)

0.0

Net proceeds from equity issuance

196.0

106.0

0.0

53.1

0.0

0.0

0.0

Net proceeds from C share issuance

0.0

46.6

0.0

0.0

0.0

0.0

0.0

Loan interest paid

(0.0)

(1.6)

(2.9)

(4.6)

(5.1)

(5.2)

(5.2)

Bank borrowings drawn/(repaid)

0.0

58.0

111.1

29.4

30.0

0.0

0.0

Share repurchase

0.0

0.0

(0.4)

0.0

0.0

0.0

0.0

Dividends paid

0.0

(10.1)

(17.8)

(18.8)

(21.2)

(21.6)

(22.0)

Other cash flow from financing activity

0.0

(1.2)

(3.5)

(1.1)

(0.0)

(0.0)

0.0

Cash flow from financing activity

196.0

197.8

86.6

58.0

3.8

(26.8)

(27.2)

Change in cash

54.8

42.6

(32.6)

(11.9)

(23.7)

(15.1)

3.2

Opening cash

0.0

54.8

97.3

64.7

52.9

29.1

14.0

Closing cash (excluding restricted cash)

54.8

97.3

64.7

52.9

29.1

14.0

17.2

Restricted cash

3.4

17.3

3.0

0.8

0.8

0.8

0.8

Cash as per balance sheet

58.2

114.6

67.7

53.7

30.0

14.9

18.1

Debt as per balance sheet

0.0

(67.4)

(165.0)

(194.9)

(226.2)

(227.4)

(228.7)

Unamortised loan arrangement costs

0.0

(1.1)

(4.1)

(3.6)

(2.3)

(1.1)

0.2

Total debt

0.0

(68.5)

(169.1)

(198.5)

(228.5)

(228.5)

(228.5)

Net (debt)/cash excluding restricted cash

54.8

28.8

(104.4)

(145.6)

(199.4)

(214.5)

(211.3)

Net LTV (net debt/investment property)

N/A

NA

22.1%

25.5%

31.0%

31.8%

30.8%

Company gearing (gross debt/gross asset value)

0.0%

15.5%

31.1%

31.5%

33.7%

32.9%

32.1%

Source: SOHO historical data, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Triple Point Social Housing REIT and prepared and issued by Edison, in consideration of a fee payable by Triple Point Social Housing REIT. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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United States of America

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Triple Point Social Housing REIT and prepared and issued by Edison, in consideration of a fee payable by Triple Point Social Housing REIT. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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