Triple Point Social Housing (SOHO ) will not return further capital to shareholders until it has sold more of its properties, which it does not expect will happen this year.

The real estate investment trust (Reit), which is struggling on a 44% share price discount, said that given ‘current economic conditions’ and ‘limited amount of capital’ the board decided ‘further return of capital is dependent on significant additional liquidity delivered through property sales’.

SOHO dipped 1.9p, or 3.1%, to 58.6p in early trading, ending a rally that has seen the shares gain 16% in the past month.

The £440m portfolio of specialist social housing has £31m in cash, with £5.1m in restricted bank accounts and £14.4m held back for working capital purposes. The board, chaired by Christopher Phillips, said this left just £5.75m for shareholders if they were to avoid increasing leverage.

As a result the company will focus on offloading assets, but said this would be ‘subject to market conditions being supportive of maximising shareholder value’ and ‘a further portfolio sale is unlikely to be pursued before the end of this year’.

On 1 September SOHO announced it sold four properties for £7.6m, 3.6% below the June book value, a deal which split analysts, with some finding it ‘underwhelming’ and others saying it gives ‘credence to the valuation methodology’.

The Reit said it had consulted with shareholders that make up 21% of its register prior to the update, which also revealed a 2.2% fall in net asset value (NAV) to 108.9p in the third quarter.

Liberum analyst Shonil Chande said the £5m spent buying back shares at an average 53% discount in the second quarter had had a ‘material offset effect’, delivering a 1.2% uplift to NAV that has grown 3.6% this year, including dividends.

But Peel Hunt Analyst Anthony Leatham said SOHO was ‘stuck between a rock and a hard place’.

He added while it was ‘encouraging’ that the board was considering all options the ‘reality is little changed as the valuation of the portfolio continues to feel the strain of wider market malaise and specific counterparty risk issues’.

The 9%-yielder declared a third quarter dividend of 1.365p per share covered by adjusted earnings, in line with its annual target of 5.46p. ‘We anticipate this improved dividend cover to continue over the remainder of the financial year,’ it said.

The group continued to make progress with its two problem tenants – Parasol and My Space – which fell into arrears in the first half of the year.

Triple Point said Parasol was paying all monthly rent due under a credit agreement and expected to have one in place with My Space, which makes up 7.7% of the portfolio, by the end of March 2024.