Triple Point Social Housing (SOHO ) has completed the sale of four properties at below book value and is contemplating the best use of capital as it looks to tackle its extreme share price discount.

The board of the £223m real estate investment trust said the four specialised supported housing properties were bought for £7.6m by a private UK real estate investment firm. This represented a gain of 9.6%, or £663,000, against the purchase price, excluding transaction costs.

However, the deal was done at a 3.6% discount to the June book value of £7.9m, according to Numis and Justin Bell, a real estate sales director at the broker, who said that the outcome was ‘underwhelming’. 

He highlighted the sale of the properties had been on the cards since 3 February when a SOHO trading update referred to the potential sale of a portfolio marketed by CBRE.  

‘It has taken them a long time to sell just just four buildings (c.1% of the portfolio),’ he told Citywire. ‘It is an underwhelming outcome given the shares are trading at a 50% discount to net asset value so shareholders might have hoped for more significant funds from sales to be available to fund buybacks.’

Bell added it would be ‘interesting to see if valuers consider this datapoint and/or the Civitas portfolio transaction (at 26% discount to their published NAV) in future valuations’.

SOHO rival Civitas Social Housing (CSH ) delisted last month after its board controversially recommended a £485m cash bid for its assets from Hong Kong’s CKA Group which invested in the Reit’s fund manager.

Although some investors viewed the 80p per share offer at a 44% premium to the then price as a ‘get-out-of-jail-free’ card for a stock weighed down by regulatory uncertainty, others viewed the deal as daylight robbery given that it was pitched way below the fund’s net asset value of over 109p per share. 

However, analysts from QuotedData were positive on SOHO’s sale, commenting the transaction ‘gives considerable credence to the valuation methodology used to calculate the NAV’.

‘Even if property valuations and debt servicing costs move up from here the current discount looks excessive to say the least and leaves a huge margin for error,’ they wrote. 

The disposed properties were across four local authorities, had a rental yield of 5.75% and a remaining lease life of 19.3 years, as of 30 June.

The company, which is due to publish its half-year results on 7 September, will take into account feedback from shareholders as it considers how best to use the proceeds. Options include the repayment of debt and share buybacks.

As of the end of 2022 the company had two debt facilities worth £263.5m, paying fixed rates of interest and with an average maturity of 10.6 years.

In June the board of SOHO completed a buyback programme worth £5m with over 9m shares purchased at an average price of 52.6p per share.

Launched six years ago, SOHO has delivered a total 29% loss to shareholders over five years, although the underlying NAV return has been 63%, according to Numis data.