The Social Housing market can be characterised as having the following benefits to the Company and investors:

Index-linked dividend yield: Long-term Leases (typically 20 year plus) with Approved Providers that benefit from index linked (typically CPI) (upwards only) rent reviews.

Secure income streams: The Company will invest in opportunities where the counterparty to the Lease is an Approved Provider. Approved Providers are Housing Associations, Local Authorities or other regulated organisations in receipt of direct payment from local government. In England most Approved Providers are funded and regulated by the Homes and Communities Agency, a non-departmental public body. This in turn means that a large proportion of the rental income generated is expected to be paid directly to the Company by Approved Providers supported by the government. The Company will largely focus on investing in Supported Housing assets as tenants in this sector typically have all of their rent subsidised by central Government in the form of housing benefit. In addition, unlike general needs Social Housing (where the housing benefit is often paid to the individual tenant who then pays such funds on to the Approved Provider), in the Supported Housing sector, the Local Authority generally pays the housing benefit directly to the Approved Provider.

Strong demand for Social Housing: The undersupply of Social Housing Units (including Supported Housing units) means that the requirement for funding in the sector is likely to be a pertinent issue for the foreseeable future. For example, the demand for accommodation for those over the age of 55 is driven by the increasing size of the UK population and improvements which help people to live longer, creating additional demand for adapted accommodation where care can be provided on site. Approved Providers are actively looking to remedy the shortage of Social Housing by approaching funders and exploring alternative sources of finance. This in turn means the pipeline of investment opportunities available to the Company is likely to increase.


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