Good morning, everyone, and welcome to the interim results presentation for the Triple Point Social Housing REIT for the period ending thirtieth of June, twenty twenty-four. As always, thank you for taking time out of your morning to come and listen to our presentation. I'm Max Shenkman. I'm a partner and head of housing at Triple Point, and I'll be giving you a run through of the highlights of the last six months. I'll then hand over to Isabelle, also a partner and the CFO. She'll run you through the financial performance of the strategy. I'll then come back on and talk about operational performance and our approach to sustainability before concluding with a brief outlook. Now, on this first slide, we've drawn out the key fundamentals that we think makes Soho compelling.
Moving across from left to right, we start with the chronic undersupply of social housing and the corresponding excess unmet demand. Now, the new government has acknowledged this lack of supply, and they've set themselves the ambitious target of delivering 1.5 million homes over the next five years, and they've also chosen to allocate a large portion to social housing, which will definitely help with the lack of supply. Excess demand will continue, and it's one of the key drivers, along with our proactive partnership approach to asset management, that has secured the strong operational performance of the portfolio in the period. Of course, that excess demand, that strong performance, are two of the key factors behind the valuation resilience that we've seen over the last six months and indeed, over the last two years.
Valuation resilience is, in part, down to the strong rental growth that the group has benefited from, and this, combined with an increase in rent collection, has ensured that the dividend was fully covered on an adjusted earnings basis for the six months ended thirtieth of June, twenty twenty-four. Finally, it's really important to note that the group continues to benefit from exclusively long-term and fixed-price debt. Now, on this next slide, we draw out some of the key financial metrics that demonstrate the resilience performance of the strategy over the first half of twenty twenty-four. Rent collections increased to 93.3%, and that has driven a corresponding increase in the adjusted EPS, which is up from 2.1 pence last year to 2.74 pence in the same period this year.
That's against a dividend target of 5.46 pence, which means that the dividend was 1.00 times covered on an adjusted earnings basis, so fully covered in the period. The EPRA net tangible assets was down ever so slightly at 112.38 pence, and that reflects a slight decrease in the portfolio value, which reduced by 0.5% on a like-for-like basis, and the figure there, 2,652.7 million, that excludes GBP 21.8 million worth of assets that are currently held for sale. Finally, the LTV was 37.2%, so broadly consistent with where it was at the end of last year, and the EPRA net initial yield was 5.96%.
On this next slide, we want to show how the group has continued to benefit from ongoing strong rental growth, which is leveraged by its compelling capital structure. So 100% of the group's leases are linked to inflation or government policy, with government policy being, for the next 10 years, to see social housing rents increase by CPI plus 1%. In 2022, rent increases were 6.7%. In 2023, they were 6.9%. So far this year, the weighted average increase in the 65.6% of leases that have benefited from their annual rent increase was 6.1%.
So that means that the 4.2% you can see at the end of that bar graph on the left-hand side, the bottom left-hand side of the slide, which currently shows 4.2%, that should increase as the remainder of the group's leases benefit from rent increases in the latter half of the year. Now, the group's debt has a weighted average debt maturity of 9.1 years, and if you look at the graph in the bottom right, you can see that the first tranche is not due to be refinanced until 2028, and that debt has a weighted average cost of 2.74%, so very attractively priced in the current high interest rate environment.
On this next slide, you can see how the valuation of the group's property portfolio has evolved over the last two and a half years, and the trend is one of modest outward yield movement being offset by the strong rental growth we described on the previous slide, and that's been the same story in the first six months of this year. There's been a roughly 20 basis point outward movement in the blended net initial yield of the portfolio, but that's been largely offset by the rental growth that has come through in the first half of the year.
You can see, looking at the bar chart on the far right, that once you factor in those 21.8 million GBP of assets held for sale, there's only been that 0.5% reduction in the value of the group's property portfolio. Of course, it's important to note that with the August reduction in the base rate, we hope that we're moving to an environment that is more supportive of real estate valuations. Now, moving to rent collection, you can see on the graph here that for the first five years of the fund's life, we benefited from 100% rent collection. There was a dip in 2022 and 2023, but you can see in the first half of this year, rent collection has increased to 93.3%.
It's really important to note that 26 out of 28 of the lessees that the group has leases with have no material rent arrears, so that reduction in rent relates to just two RPs, Parasol and My Space. We'll provide a full update on both later on in the presentation, but it's important to note that in relation to Parasol, we've now moved all of those leases away to Westmorland, and that therefore, there is no ongoing exposure to that RP. On this slide, we've tried to demonstrate how we've delivered against the various strategic objectives we set ourselves at the start of the year. So in January, we continued with the rollout of the new risk-sharing clause, and that is now included in over 50% of the group's existing leases. June was a busy month.
We commenced work on our first forward funding project for over two years, and we are going to work with Golden Lane to deliver 12 apartments in Chorley. We also announced that heads of terms have been agreed in relation to a portfolio sale with an aggregate value of over 20 million GBP. In August, Fitch reaffirmed their investment grade rating for the strategy, and we successfully completed the move of Parasol Properties away to Westmorland. Finally, in September, we'll be reviewing the results of our pilot phase of our eco retrofit project, with a view to rolling out the wider project and increasing the energy efficiency of the group's portfolio as soon as possible. On this next slide, we provide an update in relation to the two registered providers that have demonstrated historically material arrears.
Starting on the left with Parasol, in August, we successfully concluded the movement of all Parasol properties to Westmorland. That came off the back of a full transfer plan that took over four months to deliver and involved both engagement with the Regulator of Social Housing and a full tenant consultation process. Post initial stabilization period, which is expected to last no more than 12 months, we are targeting at least 90% of FRI lease rent due in terms of rent collection. Now that we have the Parasol lease transfer completed, we're focused on delivering a long-term solution to My Space, which will see a transfer of leases away to alternative registered providers, and we're engaged with a number of different RPs to ensure that we have a full transfer plan lined up.
Of course, as always, the focus will be on residents and also increasing the rental income that the group generates from the thirty-eight properties it currently has leased to My Space. So finally, on this last slide, before handing over to Isabelle, who's going to talk you through the financial section, we look to provide an update on the sale of a portfolio of the group's properties. In June, we announced that heads of terms had been agreed with a potential acquirer. We had hoped to have the sale completed during September. We've now pushed that out to November. It's important to note that the portfolio is highly representative of the group's wider portfolio, and to demonstrate that, we've included some key metrics around energy efficiency, around the waste average unexpired lease term, and around the nature of the properties being sold in this portfolio.
Finally, as previously signaled, to the market, we'll look to return capital to shareholders off the back of this portfolio sale through a share buyback program. I'm now going to hand over to Isabelle, who's going to talk you through the financial overview.
Thank you, Max, and good morning, everyone. Statement of comprehensive income. Rental income increased by 4.9% year on year. This has been driven by index-linked rental uplifts across the portfolio. The expected credit loss of GBP 1.4 million is reflective of the rental arrears for one of the group's approved providers and the probability of the recovery of those arrears. Expenses reduced by 2.5%, which is reflected in a lower OCR of 1.53%, compared to 1.63% at June 2023. The EPRA cost ratio of 18.7%, compared to 20.1% at June 2023, is a measure of expenses over rental income. This has improved due to lower expenses and increased rental income.
The fair valuation loss on investment property was GBP 6.1 million, which represents an outward movement in yields and the capitalization of some eco retrofit costs, partially offset by the rental uplifts. Net profit was GBP 5.3 million, which is equivalent to earnings per share of 1.35 pence. Dividend cover for the year was 1.0 times, which represents EPRA earnings, adjusted for non-cash items, to reflect the actual cash flows supporting the dividend payment. Statement of financial position. The fair value of investment property is 4% lower at June 2024 compared to December 2022. This relates primarily to a portfolio of 13 properties, valued at GBP 21.8 million, being recategorized to assets held for sale and therefore being excluded from the investment property figure. The sale of the 13 properties is expected to complete in November this year.
Cash at the 30th of June 2024 was GBP 29.3 million, compared to GBP 29.4 million at the 31st of December 2023. This demonstrates strong liquidity and cash cover dividend for the six months. The group's long-term fixed rate debt of GBP 263 million has an average fixed rate of 2.74% and average maturity of nine years, leading to the loan-to-value remaining at 37%. The EPRA NTA has decreased by 1.2% due to the fair value loss on investment property. The EPRA NTA bridge highlights the movement in the EPRA NTA, being EPRA earnings of 2.90 pence, less a fair value loss of 1.55 pence, less dividends paid of 2.73 pence. The total accounting return.
The return of 1.2% for the period is represented by dividends paid of 2.4%, less a reduction in NAV of 1.2%, as explained above. The cumulative return since IPO is 49.1%, calculated on the NAV at IPO of 98 pence. The dividends paid and payable are in line with the full year target of 5.46 pence, and the second dividend for 2024 will be paid in early October. Debt covenants. This slide is a summary of Soho's long-term fixed rate debt, showing significant headroom for the asset cover ratios and interest cover ratios. This demonstrates strong liquidity with a further GBP 72 million of unencumbered assets and GBP 29.3 million of cash.
For the fourth year running, Fitch has affirmed the company's existing investment grade rating of A minus for issuer default rating and A for senior secured rating. Thank you, and I'll hand you back to Max for the operational overview.
Thank you, Isabelle. I'm now going to run through an operational overview of the last six months. But before getting into the detail of operational performance, I want to kick off by reminding everyone what is at the heart of this strategy, and that, of course, is unlocking independent, community-based accommodation for people with care and support needs. And here you can see that we've spoken to Nero. He is a resident at Pennington. He previously lived with his family, and so moved out of the care, a family care environment, into his own flat, but remaining near family, friends, and within his local community.
And if you go and read the full case study and impact report or look at the video on our website, you'll see that Nero talks of the benefits of having his own home, his ability to indulge his hobbies and meaningfully engage with his local community. And he notes also that it's a brilliant and beautiful, a peaceful place to live. So a fantastic example of the benefits that specialist supported housing can bring to bear on residents. So on this next slide, you can see, if you look at the graph in the bottom right, that we're going to need to double the number of supported homes in this country over the next six years if we're to meet forecast growing excess demand.
It's no surprise, and it's quite right, that Labour have set themselves the ambitious target of delivering 1.5 million homes over the next five years. It's also good to see that they're gonna be focusing on, and a strong allocation to social and affordable housing properties. Now, the grant funding that will come with the delivery of that program probably won't find its way to specialized supported housing, and so it's critical if we're to meet that forecast excess demand, that you can see on the right-hand side of this slide, that private capital continues to work with leading registered providers to provide additional homes up and down the UK. You can see a great example of that sort of partnership in action on this next slide, where we provide some detail on the Chorley development that we started in June this year.
Now, we've developed this in conjunction with a developer we've been working with for over 10 years, and also Golden Lane, a leading specialized supported housing focused registered provider with a G1 V2 rating with the regulator of social housing. When complete, which will be midway through next year, it will provide 12 adapted apartments for people with learning disabilities in and around the Chorley area, offering them independence, offering them opportunity to move out of institutional care and have their own flat. Now, this is gonna benefit. This property is gonna benefit from enhanced energy efficiency, and also excitingly for us, it's gonna be the first development where we target a 10% net biodiversity gain over the construction period. On this next slide, we look to demonstrate the diversified and granular nature of the group's portfolio.
You can look on the left at how the portfolio is spread geographically. Bit of a concentration in the Midlands and the North, but a strong allocation to the South of England as well, with a couple of properties in Scotland and a couple also in Wales. If you look at the right-hand side, you can see that we have a really diversified lessee base. We now have leases with 28 different approved providers, the vast majority of which are registered providers, regulated by the Regulator of Social Housing, and whom focus on providing adapted accommodation to vulnerable adults with care and support needs. Now, on this next slide, we've tried to demonstrate the strong performance of Soho's top 10 lessees, excluding Parasol and My Space, who we've covered earlier on in the presentation.
These lessees account for 74.1% of the group's total rent roll, and if you look at the columns on the far right of this table, you can see how they perform from both a rent collection and an occupancy perspective. Rent collection is 100% in all but one case, where there's a slight dip below 100%, these arrears relate to BeST and we expect them to be resolved over the coming months. In terms of occupancy, you can see that it trends around 90%, which is what we'd expect for a maturing portfolio of specialized supported housing properties, so really strong performance from the group's top 10 lessees, and of course, strong performance and high occupancy is underpinned by the quality of services provided to the residents that live in the group's properties.
And here we've tried to draw out some of the key stats that talk to that point. So starting on the left-hand side, you can see that 84% of the care providers that are regulated by the CQC have been deemed good or outstanding, which is above the national average. You can see that the registered provider, care provider contract renewal rate runs at 96%, and that talks to the longevity of services being provided and the recommissioning of those services by the local authority. Finally, around 50% of the group's residents benefit from over 50 hours of care and support a week. Now, every year, The Good Economy undertakes a resident survey in relation to a sample of the group's residents, and you can see the results of the latest survey here.
Critically, over 90% of residents are satisfied with the support they're receiving, their confidence, and the independence unlocked through the properties owned by the group. On this next slide, we provide an update on the regulatory position of the specialist supported housing sector. Now, the regulator remains active with a number of the group's lessees, but I think it's really important to note that there have been no judgments or notices put out about the group's lessee base since April 2023, and in part, this reflects the constructive approach that our lessees have taken to engaging with the regulator of social housing and responding to historic observations around governance and viability. Now, we, as a landlord in this sector, seek to move the sector forward.
We seek to promote the compliance of the registered providers we have leases with, and we've done that through the rollout of our new risk-sharing clause, which insulates RPs from government policy risk at both a local and central level. This clause, before being rolled out into our portfolio, was shared with our lenders, our valuers, and of course, also the Regulator of Social Housing, and it's now included in 66% of the group's leases. Finally, before providing an outlook, I'm just gonna run through our approach to sustainability. So every six months, The Good Economy provide an impact report. Highly recommend you look at the full report. It's available now on our website. Critically, The Good Economy review the performance of the fund against six impact objectives.
When I say reviewed, our performance is judged against set targets and clear metrics, so it's really clear to see how the fund is performing, not just from a financial perspective, but from an impact perspective as well. In addition, The Good Economy visit our properties and report on the outcomes being delivered to residents. They comment on the resident survey, and that I mentioned on a previous slide, and they also talk to key stakeholders to understand what it's like to work with Triple Point and Soho as a landlord. Finally, we're really excited to be reaching the end of the pilot phase of our eco retrofit program. We set out to increase the energy efficiency of 12 properties.
Eight of those have now had their EPC rating increased to a C or above, and we expect the remaining four to benefit from an increased EPC shortly, once works are concluded. The main objective of this pilot was to learn. We wanted to understand which technologies work best, how to minimize disruption to residents, which contractors are gonna be best placed to deliver our wider project, and also how to access grant funding. We've learned a lot. We've successfully accessed grant funding, and you can see on the right that we've also gone in and spoken to the residents whose homes were affected by this project, to determine how they thought we performed.
You can see that 100% were satisfied with our communication and also the quality of work delivered through the eco retrofit project, which stands us in really good stead to kick off the wider project in the coming months. Currently, we estimate that that will cost between GBP 2.5 million to GBP 5 million, albeit full cost won't be pinned down until we've surveyed all properties that will be impacted by the wider project. We look forward to kicking that off in the latter half of this year. To conclude, by looking forward, what are our priorities for the next six months?
We'll be really focused on delivering a long-term solution to the group's My Space properties, the only remaining RP with material arrears, and obviously, there, the focus will be on preserving tenant welfare and maximizing the rent collection from those properties. We want to complete the portfolio sale as efficiently as possible, and then use the proceeds to return capital to shareholders through a share buyback program. As mentioned on the previous phase, we look forward to the rollout of the wider eco retrofit project, and of course, as always, the focus will be on maximizing rental income and increasing the strong dividend cover that we've evidenced in the first half of this year. Thank you all again for joining this morning. Thank you for listening. I'm now gonna take any questions.
Can you please give some detail on the prior year adjustment? Which tenants do the lease incentives relate to?
Should I take that, Max?
Yeah.
The adjusted dividend cover removes non-cash items from EPRA earnings, and in June 2024, we've removed the movement in the lease incentive debtor, that relates primarily to Parasol, and we've restated June 2023 for comparative reasons.
Okay. I don't think we've had any further questions. Once again, thank you all for joining this morning.