Midas share tips: Triple Point Social Housing has proved itself

Property companies have been hit hard by the lockdown and its aftermath. Shops and restaurants are struggling. Offices are largely empty. 

No one wants to pay expensive rents, set before Covid-19 upended life as we know it.

Some property firms are more resilient than others, however, and one is Triple Point Social Housing, founded in 2015.

In demand: Some property firms are more resilient than others and one is Triple Point Social Housing

In demand: Some property firms are more resilient than others and one is Triple Point Social Housing

In demand: Some property firms are more resilient than others and one is Triple Point Social Housing 

The group specialises in supported housing, providing homes for vulnerable people with special needs, such as autism, learning difficulties or physical impairments.

The company was listed on the stock market in 2017 at £1 a share and has since built up a portfolio of almost 400 properties, catering for nearly 3,000 individuals.

Today, the shares are worth £1.06 and the company said in May that it hoped to pay a dividend of 5.18p this year, putting the stock on an attractive 4.8 per cent yield.

Supported housing is a relatively new phenomenon, intended to help those with special needs lead more independent lives.

People with such conditions have historically been presented with limited options, especially once they reach adulthood.

Many end up in residential care homes or long-stay NHS hospitals. But these can be large, soul-less and located miles from residents’ families.

They often cultivate an institutionalised mindset, too, so people become increasingly dependent on carers and marginalised from mainstream society.

Supported housing is different. Homes are based in or near local communities, they tend to accommodate between six and 20 people and they are specifically designed to be homely and welcoming.

According to Government research, this type of housing does not just deliver far better outcomes for residents and their relatives, it is also far less expensive than traditional care homes, saving the taxpayer around £3.5billion a year.

Not surprisingly, Government bodies are keen to see more of it and Triple Point is one of the top players in the field.

The company acquires newly built homes, repurposes existing properties and sometimes provides cash up front to developers so they can construct sites from scratch.

To minimise risk, however, Triple Point will only fund homes once planning has been approved and lease arrangements have been agreed. Contract overruns are covered by developers too, not by Triple Point. 

Homes can often look completely conventional from the outside. Inside, they are very different, with adaptations such as wheelchair access, movable surfaces that can be raised or lowered, protected electric sockets and winches to help residents with significant physical disabilities.

Every resident requires care – sometimes around the clock, sometimes just for a few hours a day – so homes also accommodate care providers.

In each case, however, there is an emphasis on finding residents who have similar needs, which can encourage a sense of belonging and community. The homes are leased by approved housing associations, working with local authorities.

Crucially, for investors, rents are government-backed and inflation-linked, which puts Triple Point in a very different position from most property firms.

Last month, the company gave a reassuring update on rent collection for June and July, stating that rents had been paid promptly to date and that collections amply cover dividend payments.

The group has a pipeline of opportunities too, so growth is assured.

Investment director Max Shenkman is keen to expand the portfolio, demand for homes is immense and the group hopes to become the UK’s leading provider of supported housing.

Midas verdict: Triple Point offers investors steady capital growth, generous income, paid quarterly and the chance to invest in a worthwhile cause. At £1.08, the shares are a strong long-term buy.

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