GCP Infrastructure hit by concerns over housing association client

GCP Infrastructure Investments played down the possible effects on its business after worries were raised by regulator Homes England about a social housing company that rents some of its properties.

A statement from the social housing regulator stated that First Priority Housing Association Limited is "not compliant with the governance and financial viability standard" required by the regulator.

GCP reported that, as at 29 December, the company was exposed to a portfolio comprising of 43 loan assets with an unaudited valuation of £911m of which roughly 17% was exposed to social housing investments.

Of that portfolio, 3.8% was comprised of a loan granted to Supported Living Infrastructure Limited (SLIL) to fund supported living units for occupation by adults with learning or physical difficulties, subject to fully repairing and insuring 35-year leases with FPHA.

The company reports that all payments related to the loan are up to date.

The properties securing the loan note are all understood to be occupied, GCP said, and all rents arising from these properties are underpinned by housing benefit payments from local authorities.

As such, GCP does not expect to "experience any impairment of value on the Loan Note."

GCP emphasises that it will "continue to monitor events in relation to FPHA" while Homes England and FPHA work to implement a satisfactory resolution in the near future.

As of 1655 GMT, GCP’s shares were down 1.01% at 118.00p.