Civitas Social Housing : The Good Economy Social Impact Report – November 2022

This report has been produced for Civitas Social Housing PLC (Civitas or the Fund) by The Good Economy (TGE), an independent impact advisory firm specialising in impact measurement and management. TGE assesses Civitas’ performance against its stated impact objectives and the target outcomes to which it aims to contribute. The report covers the six-month period from 1 April to 30 September 2022.

IMPACT ASSESSMENT

– SUMMARY OF RESULTS

Social Need: The portfolio continues to provide homes for people with a range of support needs, including learning disabilities, physical disabilities and mental health diagnoses. An increasing number of homes are also focused on addressing homelessness.

Increase Supply: Civitas acquired one new two-unit property in the six months to September 2022. This means the portfolio has grown minimally since the Fund’s Annual Impact Report.

Quality: Civitas is systematically improving the energy efficiency of older stock by running a retrofit programme alongside energy supplier E.ON. Phase 1 has now been completed, and the Fund is currently planning for Phase 2 of the programme. In the last six months, this resulted in 18 homes undergoing works to improve their EPC rating. Overall, the proportion of homes with an EPC rating of A-C improved from 52% to 53% between March and September 2022. During 2022/23, Civitas (alongside E.ON) will be aiming to carry

out retrofit surveys at 120 properties to identify necessary improvement works.

Wellbeing: While we do not conduct Resident Outcomes Surveys for Civitas’ Half-Year Reports, results from past surveys suggest that the Fund’s homes make a positive contribution to resident wellbeing. We will conduct a fresh Resident Outcomes Survey for the Fund’s Annual Impact Report, due to be published in June 2023.

Value for Money: In partnership with Simetrica-Jacobs, specialists in social value analysis and wellbeing research, we have developed a new methodology to calculate the value for money delivered by the Civitas portfolio. We will use this methodology in future impact reports but our most recent calculation revealed that the Civitas portfolio delivered £127.0m of Total Social Value. This equated to £3.51 generated in social value per year for every £1 invested by Civitas.

STRENGTHS

Demand: There is a high level of underlying demand from commissioners for more supported housing across the country. Civitas’ portfolio should be playing an important role in addressing that need.

Support for key charities: Civitas has consistently provided support for charitable organisations whose activities align with the Fund’s core mission to deliver positive outcomes for individuals with support needs. These charities include The House of St Barnabas, which strives to help people affected by homelessness into long-term employment, and Care Home Open Week, which aims to raise awareness of the positive value delivered by the social care sector.

Scale: Since entering the sector in 2016, Civitas has acquired a portfolio of 697 properties, with the capacity to house up to 4,594 people. This is a substantial number of homes which shows that the Fund has made a meaningful contribution to increasing supply.

POTENTIAL WEAKNESSES

AND MITIGATING ACTIONS

Strengthen reporting: We recommend that Civitas aims to report against the Equity Impact Project (EIP) in its next Annual Impact Report. This is a collaborative, sector-led project which has developed a common framework so that investors can report consistently on the impact of equity- based investments in the social and affordable housing sector. Civitas Investment Management (CIM) was involved as a project partner in the development of the EIP, and Civitas is working towards being able to report against the framework.

Service delivery: We note the reports of historic issues with service delivery at a specific Civitas scheme. However, having visited the scheme, we were informed that a number of changes had been put in place to address past complaints. These include the way that residents are referred to the scheme, and mechanisms to manage antisocial behaviour. We were unable to speak to residents directly but, at the time of our visit, the property appeared well-managed, and the provider gave assurance that all residents receive the correct level of support for their specific needs.

AS OF SEPTEMBER 2022, CIVITAS HAS INVESTED £835.1 MILLION IN 697 PROPERTIES, PROVIDING HOMES FOR UP TO 4,594 PEOPLE.

Evidence gaps: We have not been able to carry out a Resident Outcomes Survey since May 2021 due to accelerated timelines for the publication of Civitas’ recent impact reports. This increases evidence risk since it means we have not been able to collect comprehensive feedback from the Fund’s target beneficiaries for approximately 18 months (other than the feedback gathered from residents during recent site visits). Civitas is planning to start collecting feedback through its next Resident Outcomes Survey from January 2023, with the results due to be stated in its next Annual Impact Report in June 2023.

£835.1

MILLION INVESTED

IN 697

PROPERTIES

MANAGED BY

18 APPROVED PROVIDERS

41% OF PROPERTIES

NEW TO SOCIAL

HOUSING AT THE

POINT OF ACQUISITION

LOCATED ACROSS

173 LOCAL AUTHORITIES

69% OF PROPERTIES

IN THE 40%

MOST DEPRIVED

LOCAL AUTHORITIES

CAPACITY TO PROVIDE

HOMES FOR 4,594 PEOPLE LIVING WITH CARE NEEDS

20-49 HOURS 20%

0% 5% 10% 15% 20% 25% 30% 34% 40% 45%

*Percentages do not equal 100% due to rounding

1. Based on resident demographics data collected from 11 of Civitas’ partner approved providers as of March 2022, covering up to 1,742 residents (approximately 38% of the portfolio).

INTRODUCTION

ABOUT CIVITAS SOCIAL HOUSING

Civitas Social Housing PLC (Civitas or the Fund) was launched in 2016. It is the UK’s first Real Estate Investment Trust (REIT) specialising in social housing investment.

Civitas focuses on specialised supported housing (SSH) – a form of community-based provision in which homes are built or adapted to meet the needs of individuals living with support needs. Homes are generally designed to support residents to live as independently as possible, either in self-contained apartments within a larger scheme, or in a room within a shared house.

IMPACT FRAMEWORK

Civitas’ impact goal is to increase the provision of high-quality social housing that delivers positive outcomes for people with support needs.

Underneath this overall impact goal, Civitas has developed an Impact Measurement and Management (IMM) framework in partnership with TGE. This framework enables Civitas to measure, manage and report on the impact of its investments, and forms the basis of TGE’s assessment in this report.

The framework’s approach is aligned with the five dimensions of impact set out by the Impact Management Project (IMP).5

Civitas’ IMM Framework

SSH is widely held to offer wellbeing benefits to residents, and independent evidence suggests it has the potential to generate cost-savings for public budgets too.2 SSH also aligns with government policy to prioritise community-based housing that encourages independence. As a result, there is a high level of demand across the country for this type of housing.

Civitas operates by raising capital at scale from institutional and retail investors in order to provide long-term equity to the social housing sector. The Fund acquires properties and leases them to approved providers to manage on long-term full repairing and insuring (FRI) leases. The rental income collected by those approved providers is used to fund investor returns.

IMPACT OBJECTIVES

The areas under the direct control or influence of Civitas.

OUTCOMES

Civitas is focused on two key outcomes. These are contingent on many factors, including the Fund’s activities.

Since launching on the London Stock Exchange in November 2016, Civitas has invested £835.1 million in 697 properties across England and Wales, providing homes for up to 4,594 people.

THIS REPORT

– – – – THROUGHOUT THIS PROCESS, CIVITAS WORKS TO MITIGATE AGAINST NEGATIVE IMPACT RISKS – – – –

This Impact Report has been prepared for Civitas by The Good Economy (TGE). It covers the six-month period from 1 April to 30 September 2022.

A mix of quantitative and qualitative data informs the impact assessment made by TGE in this report. As a half-year report, our assessment is intended to be ‘lighter touch’ than that carried out for an annual report. This means there are various data sources which are only collected annually. For this report, data sources include:

Portfolio data provided by Civitas

Information and feedback from partners including approved providers and care providers

Interviews with members of the Civitas Investment Management (CIM) team3

Site visits to selected schemes

A Resident Outcomes Survey carried out with a representative sample of residents.4

Over the last 12 months CIM has also been involved as a project partner in the Equity Investor Impact Reporting Project. This is a collaborative sector-led project of investors and other market participants. Its aim is to develop a common framework to enable investors to measure, manage and report on the impact of equity-based investments in the social and affordable housing sector in a consistent, comparable and transparent way. Civitas is working towards being able to report against the metrics developed as part of the framework.

CIVITAS’ FOCUS IS SPECIALISED SUPPORTED HOUSING (SSH) – A FORM OF COMMUNITY-BASEDPROVISION IN WHICH HOMES ARE BUILT OR ADAPTED TO SUPPORT THE NEEDS OF VULNERABLE PEOPLE.

Footnotes on following page.