Member Info for Punter987

Watching with interest as I sold out before the offer :-(

However, I read on another chat that they are delisting but my reading of the document states that it can only be delisted if they get 75%, which they do not have (or did not have as of Friday).

Am I reading that correctly?

;-(. wish I had known before selling !

Actually it seems the accounts are late to be submitted to the RSH but also at companies house. AHS has reduced their accounting period by one day which allows them 3 months extension for submitting accounts. It’s a method used by companies that are having difficulty finalising their accounts. It can be interpreted in many ways but given the release by the RSH, it’s a reg flag and part of the reason I sold.

I share your concern on timing and the difference between the Civitas and Soho announcement is quite telling.

Soho was clear to indicate that they were fully paid except for the relatively small amount in March end. Whereas Civitas avoided this point and also stated they have been working with AHS, which seems to support the issue that the regulator has raised about conflict of interest.

The comment below from "wishIhadnt" is also concerning as it means AHS have not been collecting enough rental income and therefore how can Civitas (as largest landlord) claim they are receiving their full rent or at least confirm there are likely rent arrears. Soho were transparent about their exposure to MySpace and have done the same here but Civitas has not been. Looking back at previous results, Civitas would state they receive 100% of lease income and this changed to receiving in line with management expectations. Now we have no understanding.

The opacity of the relationship and the vagueness of Civitas's response given the AHS is 15.9% of rent roll should be a concern and now Civitas are likely to no longer have their control over AHS with the new board appointments.

I don't quite understand the rent classification issue fully except that it could mean lower rental income than currently received?

I therefore sold my holdings today in full. I felt better to take the hit as I think this time Civitas is definitely being more misleading and it's just too much vagueness in their responses. This is all my opinion and will follow this chat to see if I have misunderstood and potentially look at it as a buying opportunity going forward.

they may be under NDA with the lender so cannot disclose.
not sure sure 1.3% is accurate for default - I suspect much higher than that but all priced in. I am a holder but my only concern with Civitas is that I don't believe they disclose things appropriately and have a small concern that we will have some surprises but again all priced in so should be fine

I think that is right. No short position here! I also don't think that Myspace (and other RPs) are going to impact Civitas as much as the other Reits. However, I am also concerned that the statement was "contorted" and based on reading the various reports over the last few years, the statement went from collecting all rents to collecting in line with "expectations". So my summary: I don't believe they are collecting all their rents and that management is distorting actual collections and fudging it with lease incentives. However, I think that this is all priced in and we are at/near the bottom and that we could be seeing a good buy unless we see further significant interest rate increases. All IMO of course.

Anyone know what lease incentives mean? Also, are rent arrears really only 20 days or is that the value in current debtors? Putting aside the Home Reit issues slightly impacting SoHo, I am struggling to understand how SoHo has historically had a higher debtors but Civitas is more exposed historically to the approved registered providers under review.

FYI - I am a holder and looking to add more so just doing my diligence.

Hello. You are completely twisting my point.
For clarity - 40% of rent roll I get and high concentration risk concerns me and therefore disagree with a NAV at 108. What I am asking and again, it’s ok to say you don’t know - those that sell to Civitas also sell to TP. Are they all colluding as TP as exposure to both those RPs as well.
Secondly, you indicated (or tried) that all the 40% was done by these individuals - which is not the case so are the others who deal with Civitas and those RPs involved? That’s something which is concerning - the rest does not dictate a discount what you are proposing.
The rest I consider it your spin and good on you if it works but my question gets to the real issue (at least I believe)
Thanks

Thank you.
Auckland does not seem to be owned as you have stated and comments like these where you have some data but others are easily checked as wrong concern me. The PSC is the Social Housing Family for Auckland.
These SPVs you have highlighted are only a few compared to so many others bought by Civitas and from various other parties. These same parties sell to Triple Point it seems - are you suggesting they are all connected? That was my question - ok if you don’t know but what you are suggesting is that the sales of one party dominate the sales to Civitas but the data does not back that up (yes I have looked on companies house). I am more concerned with this aspect of your point as I can’t comment on why one property went up by 3xin a £800m plus portfolio of assets. I would expect the value to go up in a SPV sale as there will be transaction fees and maybe costs to fix up the property but maybe a good question for Civitas to answer.

Morning.
I am having trouble reconciling your data and it seems some of it may be not public. I was a small long but disappointed there has been no response so have sold out.
I do feel this is an over exaggeration so I am looking to buy back in at a later date.
I have looked at as many of the companies used to purchase the properties and there are so many different parties not just the names you have mentioned. It seems these same parties also deal with Triple Point. Are you suggesting all or the majority of deals go through the same parties you mention below? Seems a stretch but if you have data to highlight this - this is concerning. Based on public company data, CSH have almost all the same parties they deal with and the majority are developers not on your list so should we be expanding this network as those developers also deal with the same RPs. Any thoughts?
I know the property business very well and it’s a tough business but you can’t play with valuations at 3x as you have suggested that easily to get past JLL and banks.
IMHO, it all hinges on the quality of the response as the underlying assets will always have a significant value and not 30% as suggested but not 108 either.

ConcernedHolder. Thank you for your message directed at myself. I am a little "concerned" about your behaviour and so this will be the last response I make to yourself as I honestly believe you are acting dishonourably and possibly illegally with your comments (however, I am not familiar with the rules of posting on these sites).
I am a semi-retired executive who sits on private company boards as an independent director and I have been investing a long time. I have colleagues who sit on boards of RPs and I have asked them for some insight. I research fully investments I make and I do believe there is an opportunity here (I am only a small holder for now).
In summary: large RPs, which were established by receiving property portfolios from local authorities or government institutions, do not need to sign leases as they have the capital to develop properties and most find it difficult to manage supported living as its a intensive property management requirement. Smaller RPs (as you have alluded to in your message that there are 1,800) are the majority and most of these are run as income generating for families (as you stated). They don't take dividends, as they are not for profit, but take salaries and often provide the maintenance and management through related party companies. The Regulator of Social Housing does not have the capacity to monitor all these RPs so takes the soft approach. I am not familiar enough to comment further on the specifics but as someone that has been in business a long-time, I suspect these smaller RPs were not suitable to take leases for an institutional investor (like Civitas and TP). Therefore, again only speculation, that these RPs you referred to were built up to meet these requirements. This is similar to many other industries I have seen in developing sectors. Supported living rental properties are not new and what Civitas and TP have done is institutionalise what was normally funded private property owners and developers. I am told by my associates that in most cases the higher rents are justified but not always.
My concern is the personal gain that the directors seem to have created for themselves without informing the market. Civitas needs to address this quickly.
If you are a director of an RP (and excuse me but I do have my doubts), then you should inform your other directors of your actions / activities as in any other sector, you would be fired or suspended subject to a review. I also question why you are working so hard on this and not helping fix the situation. If you are part of Shadowfall or related, please tell the truth or stop posting inaccurate information.
My other concern is the lease incentives but that relates to share price and impairment. No asset/property portfolio is without its "dogs". If you have 30% voids, then focus and fix it and the market will correct itself and these firms will eventually suffer. Write an open letter to Civitas (if allowed) and stop paying the ren

CH - sorry that is a complete lie that this format and text was copied amongst CEOs of Registered Provider and Care Providers for years. One RP, Inclusion Housing Association, who publishes detailed accounts and information, work with all the same funders and care providers that I could see on the Civitas and TP information has nothing close to what you are stating. And to state that two care providers can bring the NAV down is highlighting your frustration if you are really in the sector but your statements are very inaccurate.

to be clear, I am not asking you to stop writing or expressing your opinion but please stop exaggerating. If you are on the board of an RP, this is concerning if that is the way you operate. I sit on a few boards (unrelated to the sector and business here) and I would never accept a board member making such statements and the fact that you have vulnerable adults in your properties is concerning you would do so inaccurately.

CH, that does now seem to be personal. It cannot be that 2 care providers are responsible for all void costs of the RPs and Civitas. The two care providers you mention are not big enough if you look at their balance sheets to cater for all of Civitas's stock. Does your RP have properties with both of these care providers? It seems you are an insider but only highlighting one side of the truth. I'm not defending the claim or the stock but two care providers bringing down the stock to 35% seems very unlikely. Please also remember these same RPs are also with TP and are you saying that TP is complicit as well or that they did not do their diligence on the RPs. I am starting to have concerns you are related to short sellers in some way and to be fair the is wrong - don't you think so yourself?

Good point Matt. However, the conflicts don't worry me as much but the incentives do. I await CSH's comments but if this is correct, we could see asset impairment. In my mind, any property will have "dogs" in its portfolio and Civitas (and TP for that matter) are likely doing what most property companies do - trying to find a solution and when there is no solution, impairment. The interesting part will be to understand the significance to the portfolio. What worries me is that they are always too positive and not balanced in their reports (again, neither is TP).

Definitely looking forward to CSH's response.
Looking at TPs housing association exposure - its mainly the same names as Civitas, with a difference in weighting however.
Except for Inclusion, the balance sheets of remaining RPs are all the same. Interested to see if this spills over.

Thank you ConcernedHolder.
I suggest you stop paying the lease payments, seriously, what are they going to do. That way, it will need to be disclosed and therefore they will need to deal with it. The Regulator of social housing will not like it but I can't see Civitas kicking people out of their homes or taking any RP to court (neither will TP). They will force a solution.
I am going to take this question to the company directly as they state, anyone can contact them.
My family is in the care sector and I know that shared are still used by local authorities as not all individuals can go directly into their own apartment (excuse me but I don't know all the details and that is just one point raised).
Interesting comment on Civitas trying to sell the Investment Manager

Hi ConcernedHolder. Thanks for finally being upfront about your motives. I have no gripe with you stating the comments below but I feel some of them were very inaccurate and misleading and some are enlightening. In doing my extensive research since this has come up, there were historical issues with developers and I believe the issues are the level of rents and the suitability of the properties. This was a relatively new sector in its early stages and although I do not condone the practices, the funds have gotten smarter and more understanding and we should remember that these individuals would not all have homes if not for the private sector. Having read the Regulatory Notices from the Regulator of Social Housing, I believe that they do not like the lease model but again have acknowledged that many of these homes would not have existed without private sector funding. And it is not like a smaller housing associations can easily raise funding when you read the various articles and research reports.

Private sector needs to make money so that our economic growth continues - its one of the fundamental aspects of capitalism and free markets. I do not agree that conflicts of interest are all bad (and in many instances are good) but they just need to be managed. The housing benefit payments are for the tenants to cover their rents and if they moved to another home (not associated with Civitas or any other stakeholder), the rent still needs to be paid to a private landlord as there is a shortage.

The developer you mentioned, seems to have been part of the sector that caused issues but there are always bad apples. Its sad but the RP you mentioned still provides homes. You mentioned they are all shared homes - so? Those that are not fit for purpose should be renegotiated with the landlords like Civitas and others. It seems to me the RPs hold the strength in the relationship looking at it as an investor in Civitas. Like any portfolio, there will be defaults and not operating assets and if the RP just stops paying the rent, its not like Civitas can take them to court and destroy their trading partners.

If you want to fix the system - get your RP to try that approach and then let's see if Civitas make the announcement. then we will all know if there is a "cover up"?

Seems Shadowfall have increased their short position again. Are they waiting for price to increase before selling into the market? Coincides with more comments from ConcernedHolder?

I do find it concerning that no statement from Civitas reit as yet - definitely something that should be forthcoming from the board.

LucyDS - I think I get your point about backing management teams and I definitely agree with the fact that more information should be shared. I, however, I am not sure that the rest of your statement is correct. He may be a "legend" and making money against the flow is not a bad thing at all. What I disrespect is the tactics used and the fact that information provided here and in the Shadowfall statements is one sided and not actually correct in many instances. For example, the idea that properties were bought at 3x book actually has no value as it should be dependent on market value vs purchase price. Civitas should be disclosing that information for a related party transaction or at least highlighting that they took independent advice on the valuation, outside of the representation of the manager (i.e. Tom Pridmore et al...). There are others as well.

I am not defending the stock or the management team and have sold out and have started buying back at the levels yesterday as its an attractive price, yield and likely to return above 100 when the shorts need to unwind (IMO). If Shadowfall and others uncover a fraud, which would have to be between Civitas, their managers and team members, advisors, lawyers and various other stakeholders then we have all been duped. Unlike Wirecard, there is actual rents being received, in real properties with real (vulnerable) individuals residing in these properties.

Civitas should make a statement. Whether they declared to Board of CIM or Board of CSH Reit, the Board of CSH Reit now know (if they didn't already). If they didn't they will want to make a statement and if they did, then either they will not need to respond to the Shadowfall "conspiracy" or feel that they should. They are experienced and reputable individuals and are on other boards so their reputation is already strong so that gives me comfort. It does look like a buy at this level...

I am not familiar with the rules but I wonder if ConcernedHolder needs to declare if she/he is directly or indirectly related to Shadowfall?