Triple Point Social Housing REIT — DPS commitment maintained despite challenges

Triple Point Social Housing REIT (LSE: SOHO)

Last close As at 17/05/2024

GBP0.61

0.10 (0.16%)

Market capitalisation

GBP241m

More on this equity

Research: Real Estate

Triple Point Social Housing REIT — DPS commitment maintained despite challenges

In its trading update, Triple Point Social Housing REIT (SOHO) sets out the path to restoring rent collection from two lessees in arrears. It also underlines the quality of its portfolio, the continuing performance of most lessees and their progress with addressing regulatory concerns. Until resolved, the arrears will have an impact on earnings and valuation, but SOHO remains committed to its FY22 DPS target of 5.46p. We will revise our forecasts when the FY22 results are published in March.

Martyn King

Written by

Martyn King

Director, Financials

Triple Point Social Housing REIT_resized

Real Estate

Triple Point Social Housing REIT

DPS commitment maintained despite challenges

Trading update

Real estate

14 February 2023

Price

54.9p

Market cap

£221m

Net debt (£m) at 30 June 2022

222.4

Gross gearing at 30 June 2022 (gross debt/gross assets)

36.8%

Shares in issue

402.8m

Free float

98.5%

Code

SOHO

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(7.6)

(19.4)

(41.7)

Rel (local)

(8.7)

(25.1)

(42.5)

52-week high/low

97p

49p

Business description

Triple Point Social Housing REIT invests primarily in 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 income, tracking inflation with the potential for capital growth.

Next events

FY22 results

Expected March 2023*

*FY21 results were released 23 March 2022.

Analyst

Martyn King

+44 (0)20 3077 5700

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

In its trading update, Triple Point Social Housing REIT (SOHO) sets out the path to restoring rent collection from two lessees in arrears. It also underlines the quality of its portfolio, the continuing performance of most lessees and their progress with addressing regulatory concerns. Until resolved, the arrears will have an impact on earnings and valuation, but SOHO remains committed to its FY22 DPS target of 5.46p. We will revise our forecasts when the FY22 results are published in March.

Year

end

Total income
(£m)

EPRA earnings*
(£m)

EPRA EPS
(p)

NAV** per
share (p)

DPS
(p)

P/NAV
(x)

Yield
(%)

12/20

28.9

16.6

4.61

106.4

5.18

0.52

9.4

12/21

33.1

19.4

4.82

108.3

5.20

0.51

9.5

12/22e

37.2

18.6

4.62

115.7

5.46

0.47

9.9

12/23e

39.1

22.7

5.63

122.5

5.62

0.45

10.2

Note: *Excludes revaluation movements and other non-recurring items. **EPRA net tangible assets per share.

Rent arrears will affect near-term performance

Rent arrears will partly offset strong FY22 indexed rent growth. The two lessees in arrears (out of 27 in total) account for an aggregate c 17% of rent roll and have been affected by a combination of inflationary cost issues, operational challenges and regulatory issues (details below). Most lessees continue to perform as expected. We expect further near-term rent provisions and, in addition to some market-driven yield widening, a negative impact on property values. SOHO is focused on regulated specialised supported housing (SSH) with care delivered by similarly regulated independent providers. When performing well, SSH provides high levels of care to vulnerable individuals who generally require very long-term care in suitably adapted or purpose-built accommodation. SSH is widely recognised to generate strong social benefits, while SOHO has delivered consistently positive accounting returns averaging 6.9% pa. The SSH sector does not uniformly ‘perform well’, causing investor uncertainty about issues raised by regulators despite a good performance from many registered providers (RPs) and tangible progress at others.

Strong regulation is a positive for sustainability

For most lessees, the regulator is strongly focused on governance issues, operational performance and compliance with housing benefit rules. For all, it requires a demonstration of adequate long-term financial risk management plans, capturing unforeseen risks such as a potential for any future change in government policy. Landlords like SOHO have responded with risk-sharing initiatives, for which we expect no material impact on their financial returns. Meanwhile, the benefits of strong regulation to the long-term stability of the social housing sector and the improvements that most providers are achieving in response to the issues raised by the regulator can often be overlooked. We discuss this in more detail below.

Valuation discounts significant risks

We estimate a c 20% decline in income would still support a fully covered dividend yield of 7%. The P/NAV discounts a more than c 30% decline in property values.

Strong rent growth but increased arrears

The trading update provides some key information about financial performance to 31 December 2022 (FY22). The board remains committed to its FY22 DPS target of 5.46p of which three interim dividends, each of 1.365p, have already been declared and paid. All SOHO’s leases are indexed to inflation1 and rents increased by a weighted average 6.7% during the year. However, due to two lessees (My Space and Parasol Homes, 7.9% and 9.6% of rent roll, respectively) falling into arrears in respect of a part of their rents for the year, 91.7% of rent due was collected (H122: c 96%). The other 25 of SOHO’s 27 lessees recorded no material arrears. With all debt long-term and fixed-rate, with an attractive weighted average coupon of 2.74% and a weighted average maturity of 10.6 years, income is fully protected from interest rate increases.

  1 92.6% are linked to CPI with the remaining 7.4% linked to RPI. 5.1% have caps.

SOHO says that Parasol Homes continued to pay some of the rent due in the latter half of 2022, but not all, because of operational issues that it is working to address. The company expects to agree a rent repayment plan with Parasol, including for rent arrears, as it seeks to return rent payments to historical levels.

The problems at My Space are more significant and complex, as we discuss below, and at this stage, insolvency cannot be ruled out. Although this is just one of the potential outcomes, SOHO is nevertheless actively looking to move properties away from My Space to alternative housing providers. Given the regulator’s request to My Space that it consider the potential for a business combination or merger, this may not be fully necessary. Whatever the decision, SOHO says that protection and welfare of the residents would be its principal concern and in that respect the company notes that it may be necessary to amend lease terms as part of any transfer.

To establish the downside risk, SOHO requested the company’s independent valuer, Jones Lang LaSalle, to determine the potential negative impact of My Space entering administration. The valuers have estimated this to be up to 38% of the value of the properties let to My Space or 2.4% of SOHO’s total portfolio valuation as of 30 September 2022. Although not specified, we would expect this to take account of potential new lease incentives or reduced rent levels that a property transfer may incur.

For FY23, SOHO says that it will prudently apply a temporary one-year cap of 7% to its leases to its RP lessees. We think this a sensible approach in the current inflationary environment, allowing for material rent growth while ensuring that these remain sustainable and in line with wider social housing policy. Although SSH is excluded, the UK government has capped social housing rent increases to 7% for 12 months from 1 April 2023.

The company will also seek to introduce a new risk-sharing clause into its existing leases during the first half of 2023 following ongoing consultation with stakeholders, including the Regulator of Social Housing (RSH). The clause is intended to enhance the ability of RPs to address a key regulatory concern about long-term lease risks to RPs. We believe this could be an important development and expect further details with the FY22 results announcement.

We will update forecasts with the FY22 results

As noted above, we expect SOHO to report FY22 results during March 2023. Ahead of this we have not updated our forecasts, published on 4 October 2022. Compared with those forecasts, rent increases are stronger but this is more than offset by reduced rent collection. Also not in our published forecasts, we expect the property yield widening that has affected almost every sector of the UK commercial property market to have affected the valuations of SOHO properties and NAV, although compared with the broader property sector, index-linked rents, long leases (c 25 years) and strong underlying demand for homes should significantly mitigate the underlying impact. However, some additional specific impact from the properties leased to My Space and Parasol seems likely.

Discount management

The board is committed to addressing the current significant share price discount to net asset value. It is examining the potential for accretive share buybacks outside of a close period, for which the balance sheet provides some scope. At end-H122, the gross loan to value ratio (outstanding debt/gross assets) was 37.6%, within the company’s medium-term 35–40% target. Unencumbered assets amounted to c £70m at the 30 September valuation. Additionally, it will consider the potential for asset sales to fund a capital return provided this would have no material adverse impact on the company’s leverage position.

My Space

For readers who are less familiar with the regulation of RPs and SSH, we provide a summary below.

In December 2022, the RSH noted that My Space (MS) was subject to regulatory intervention or enforcement action, both in relation to its governance and financial viability, and that it was in the process of serving an enforcement notice, published in January 2023. The enforcement notice reiterates the previously expressed concerns of the RSH and directs MS to undertake certain actions within clearly specified timeframes. These actions are focused on resolving MS’s solvency position, ensuring its rents are compliant with government policy for social housing rents and that MS becomes compliant with regulatory standards. The RSH also believes that MS has failed to manage its affairs with the appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight required to ensure its viability is maintained and that social housing assets are not put at undue risk.

Without knowing the specifics, we suspect that MS’s integrated (housing and support) business model may have complicated its ability to satisfy the RSH with respect to the rent standard. SOHO notes that operating such a model is not common for its tenants.

High levels of care are an indicator of appropriate rents

In its trading update, SOHO has provided additional details of the breakdown of its portfolio, highlighting its focus on properties that provide SSH (88.5% of portfolio rent roll), all of which are leased to Registered Providers (RPs), regulated by the Regulator of Social Housing In each of these, a care provider, regulated by the Care Quality Commission (CQC), provides care to residents independently of the RP, which is responsible for providing housing management services. Among all SOHO’s 27 tenants, referred to collectively as approved providers, c 94% of rent roll is leased to providers that are subject to regulatory protection and standards provided by the RSH (18 lessees), the CQC, also the main regulator of care providers (five), and Ofsted (two). The remaining two lessees are community interest companies where regulation is administrative only. In addition to the 88.5% of SOHO’s rent roll that comes from properties supporting SSH, a further 4.1% supports registered care or children’s services, and 7.4% is classified as supported housing.

SSH is aimed at (and is defined by) providing a high level of care and support to vulnerable individuals, who may typically have mental health issues, learning difficulties or physical disabilities requiring a significant level of care and support, in appropriately designed or structurally altered properties. Driven by demographic trends and government policy, the average age of those living in SSH is generally young (60% of residents in SOHO homes are less than 40 years old and 82% are less than 50 years old2), with the likelihood of requiring support for decades to come. Based on data provided by lessees, in relation to those lessees, SOHO estimates the average care hours received by residents is over 40 hours per week, considerably above guidance around the levels of care expected in SSH. The high level of care and the nature of commissioning are among the features that differentiate SSH from supported housing.

  2 Age breakdown based on approximately 43% of the portfolio (as of December 2021) where age data is available.

As with SSH, where supported housing works well, residents are provided with suitable accommodation and support to which they may not have otherwise had access. However, there has been considerable focus on aspects of some parts of the sector that do not work well. This includes concerns over instances of poor-quality accommodation, a lack of support provision and high rents.

Improvements are also required across the broad SSH sector, but regulatory authority and responsibility is clearer. Over the last five years, the RSH has actively engaged with RPs that operate a long-lease model in the SSH sector. Many non-compliant regulatory judgements/notices have been issued across the sector (see below), in part reflecting its strong growth in recent years and the challenge this has presented for the development of management and governance structures, as well as capital resources, to keep pace. As SOHO is a leading private sector investor in SSH, working with some of the fastest-growing providers, 103 of SOHO’s 18 RP lessees (27 lessees in total) have been issued with regulatory judgement/notices. Regulation of the social housing sector has provided stability to the sector, to the benefit of all stakeholders, and SOHO welcomes the ongoing engagement by the regulator. It believes that improvements in the governance and operations of most of its lessees result from this strong regulation combined with its own close engagement with them and active asset management. SOHO notes that despite the challenge of inflation, most of the seven lessees that represent 5% or more of rent roll have demonstrated an improvement in net profitability in their latest management accounts shared with it.

  3 The lessees and their share of rent roll are: Encircle (0.5%), My Space (7.9%), Inclusion Housing (31.1%), BeST (5.3%), Parasol Homes (9.6%), Pivotal (0.6%), Hilldale (8.3%), Advanced Housing & Support (4.8%), Highstone (3.7%) and Falcon (8.7%).

A summary of exempt supported housing

Supported housing encompasses a wide range of housing that combines housing with support for people with different needs, such as older people, people with disabilities and people with complex needs. Exempt accommodation is a category of supported housing that is exempt from locally set caps on housing benefit, recognising that housing costs are higher. While housing costs are covered, subject to the claimant’s personal circumstances, by the uncapped level of housing benefit, the housing benefit cannot be used to fund the cost of care, support or supervision. Providers fund the care they provide through charitable or commissioned funding, providers’ surpluses or by charging the resident a service charge, unless the resident is eligible for a state-funded care package. The level of care that should be provided is not clearly defined but is expected to be ‘more than minimal’.

SSH is a particular type of supported social housing designed to provide care-based accommodation to some of the most vulnerable in society. This typically includes those with acute long-term or lifelong care needs relating to mental, physical and learning disabilities, and autism, but may also include those suffering from domestic abuse, substance abuse and homelessness. It is common for care to be provided by a third party, contracted directly with the commissioning local authority. The care provider, in turn, secures a suitable property. Care costs and housing costs, including property service charges, are paid separately to the care provider and the property provider (by-passing the home resident).

All funding for approved SSH schemes comes from central government and is distributed via the local authorities that commission the services. SSH provision is therefore not reliant on the level of local authority funding. An important distinction of SSH is that the level of rent that an individual living in SSH may claim is set on a bespoke basis according to their needs and is exempt from the social rent rules that normally apply to housing benefit awards. To fall within the exempt rent legislation, SSH homes must fulfil several criteria including:

the accommodation provided must be designed or structurally altered for residents who require specified services or support to live independently in the community;

the accommodation must be provided on a not-for-profit basis, by a housing association, local authority, registered charity or voluntary organisation;

the accommodation must offer a high level of support that is equivalent to the services or support provided in a care home, for residents whose only alternative would be a care home or hospital. This requirement also extends to the housing association or other property provider, which is expected to provide levels of support or supervision above that provided in general housing services; and

the accommodation must be delivered without public subsidy.

The regulatory framework

There is no single central regulator of supported accommodation. If the accommodation is provided by a housing association, in most cases it will be registered with the RSH as a RP and will be subject to the associated regulatory requirements. Through this framework, the RSH seeks to promote a viable, efficient and well-governed social housing sector able to deliver homes that meet a range of needs.

In summary, the objectives of the RSH are to:

protect social housing assets;

ensure providers are financially viable and properly governed;

maintain the confidence of lenders to invest into the sector;

encourage and support the supply of social housing;

ensure that tenants are protected and have opportunities to be involved in the management of their housing; and

ensure value for money in service delivery.

In seeking to meet these goals, the RSH has set ‘economic standards’ and ‘consumer standards’. The RSH proactively seeks assurance that the economic standards are being met by providers. The consumer standards are currently monitored on a reactive basis.

The three economic standards are:

Governance and liability – how well the organisation is run and is it financially viable.

Value for money – does the provider make the best use of its resources.

The rent standard – are rents set in accordance with government policy for social housing rents (and in the case of SSH, in particular, to ensure that rents qualify as ‘exempt’).

The regulatory judgements (applicable to RPs with more than 1,000 units) and notices (applicable to RPs with less than 1,000 units) that are published by the RSH represent its official view of an RP’s compliance with the governance and financial viability standards. These range from 1 to 4 (eg G1/V1 or G4/V4), with 1–2 representing levels of compliance and 3–4 levels of non-compliance. Regulatory notices are issued in response to an event of regulatory importance (for example, where an RP is found to have breached a consumer standard that has or may cause serious harm) that it needs to make public.

Exhibit 1: Financial summary

Period ending 31 December (£m)

2018

2019

2020

2021

2022e

2023e

INCOME STATEMENT

Total income

11.5

21.1

28.9

33.1

37.2

39.1

Expected credit loss

0.0

0.0

0.0

0.0

(0.5)

0.0

Directors' remuneration

(0.3)

(0.3)

(0.3)

(0.3)

(0.3)

(0.3)

Investment management fees

(2.3)

(3.9)

(4.1)

(4.6)

(4.8)

(5.0)

General & administrative expenses

(1.9)

(1.8)

(2.2)

(2.1)

(2.7)

(2.7)

Total expenses

(4.5)

(6.0)

(6.6)

(6.9)

(7.8)

(8.1)

Operating profit/(loss) before revaluation of properties

7.0

15.1

22.3

26.2

29.0

31.1

Change in fair value of investment properties

14.5

11.8

7.9

9.0

32.9

26.8

Operating profit/(loss)

21.5

26.9

30.2

35.2

61.8

57.9

Net finance income/(expense)

(1.6)

(3.2)

(5.6)

(6.8)

(10.4)

(8.4)

PBT

19.9

23.7

24.6

28.4

51.5

49.5

Tax

0.0

0.0

0.0

0.0

0.0

0.0

Net profit

19.9

23.7

24.6

28.4

51.5

49.5

Adjusted for:

Change in fair value of investment properties

(14.5)

(11.8)

(8.0)

(9.0)

(32.9)

(26.8)

EPRA earnings

5.4

11.9

16.6

19.4

18.6

22.7

Interest capitalised on forward funded developments

0.0

(0.1)

(0.1)

0.0

0.0

0.0

Amortisation of loan arrangement fees

0.0

0.5

1.2

1.3

1.2

1.2

Loan arrangement fees written off

0.0

0.0

0.0

0.0

2.0

0.0

Company adjusted earnings

5.4

12.3

17.7

20.7

21.7

23.9

Basic & diluted average number of shares (m)

237.6

351.1

360.9

402.8

402.8

402.8

Basic & diluted IFRS EPS (p)

8.37

6.75

6.82

7.05

12.78

12.29

EPRA EPS (p)

2.27

3.39

4.61

4.82

4.62

5.63

Basic & diluted company adjusted EPS (p)

2.29

3.50

4.90

5.14

5.40

5.92

DPS declared (p)

5.00

5.10

5.18

5.20

5.46

5.62

EPRA EPS/DPS (x)

0.45

0.67

0.89

0.93

0.85

1.00

Company adj. EPS/DPS

0.46

0.69

0.95

0.99

0.99

1.05

EPRA cost ratio

39.0%

28.3%

23.3%

20.9%

21.0%

20.6%

EPRA NTA total return

7.5%

6.5%

5.9%

6.6%

11.9%

10.6%

BALANCE SHEET

Investment properties

324.1

472.3

572.1

641.3

684.4

711.8

Other receivables

0.0

0.0

0.0

2.3

2.6

2.6

Total non-current assets

324.1

472.3

572.1

643.6

687.0

714.4

Cash & equivalents

114.6

67.7

53.7

52.5

43.9

45.3

Other current assets

3.4

4.3

4.3

3.9

3.8

4.0

Total current assets

118.0

72.0

58.0

56.4

47.7

49.2

Trade & other payables

(9.0)

(8.1)

(5.0)

(3.7)

(5.7)

(5.9)

Other current liabilities

0.0

0.0

0.0

0.0

0.0

0.0

Total current liabilities

(9.0)

(8.1)

(5.0)

(3.7)

(5.7)

(5.9)

Bank loan & borrowings

(67.4)

(165.0)

(194.9)

(258.7)

(261.7)

(262.9)

Other non-current liabilities

(1.6)

(1.5)

(1.5)

(1.5)

(1.5)

(1.5)

Total non-current liabilities

(68.9)

(166.5)

(196.4)

(260.2)

(263.2)

(264.4)

IFRS net assets

364.2

369.7

428.7

436.1

465.8

493.3

EPRA net assets

364.2

369.7

428.7

436.1

465.8

493.3

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

351.4

350.9

402.8

402.8

402.8

402.8

Basic & diluted IFRS NAV per share (p)

103.6

105.4

106.4

108.3

115.7

122.5

Basic & diluted EPRA NTA per share (p)

103.6

105.4

106.4

108.3

115.7

122.5

CASH FLOW

Net cash flow from operating activity

5.4

16.3

24.5

24.7

30.0

31.2

Cash flow from investing activity

(160.6)

(135.5)

(94.4)

(61.4)

(9.1)

(0.6)

Net proceeds from equity issuance

106.0

0.0

53.1

(0.0)

0.0

0.0

Net proceeds from C share issuance

46.6

0.0

0.0

0.0

0.0

0.0

Loan interest paid

(1.6)

(2.9)

(4.6)

(5.6)

(7.2)

(7.2)

Bank borrowings drawn/(repaid)

58.0

111.1

29.4

65.0

0.0

0.0

Share repurchase

0.0

(0.4)

0.0

0.0

0.0

0.0

Dividends paid

(10.1)

(17.8)

(18.8)

(20.9)

(21.7)

(22.0)

Other cash flow from financing activity

(1.2)

(3.5)

(1.1)

(2.7)

(0.4)

0.0

Cash flow from financing activity

197.8

86.6

58.0

35.7

(29.4)

(29.3)

Change in cash

42.6

(32.6)

(11.9)

(1.0)

(8.5)

1.4

Opening cash

54.8

97.3

64.7

52.9

51.9

43.4

Closing cash (excluding restricted cash)

97.3

64.7

52.9

51.9

43.4

44.7

Restricted cash

17.3

3.0

0.8

0.6

0.6

0.6

Cash as per balance sheet

114.6

67.7

53.7

52.5

43.9

45.3

Debt as per balance sheet

(67.4)

(165.0)

(194.9)

(258.7)

(259.6)

(260.8)

Unamortised loan arrangement costs

(1.1)

(4.1)

(3.6)

(4.8)

(3.9)

(2.7)

Total debt

(68.5)

(169.1)

(198.5)

(263.5)

(263.5)

(263.5)

Net (debt)/cash excluding restricted cash

28.8

(104.4)

(145.6)

(211.6)

(220.1)

(218.8)

Net LTV (net debt/investment property)

NA

22.1%

25.5%

33.0%

32.2%

30.7%

Company gearing (gross debt/gross asset value)

15.5%

31.1%

31.5%

37.6%

35.9%

34.5%

Source: Triple Point Social Housing REIT historical data, Edison Investment Research forecasts


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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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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 £60,000 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.

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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 2023 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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