Residential Sec Regulatory News (RESI)

17 March 2022

Residential Secure Income plc

Acquisition of 182 income-generating, inflation-linked, shared ownership homes

Residential Secure Income plc ("ReSI plc", LSE: RESI), which invests in independent retirement living and shared ownership to deliver secure, inflation-linked returns, has agreed to acquire 182 shared ownership freehold houses for £21mn of cash consideration (which includes transaction costs).

The diversified portfolio is fully occupied and primarily located in the South East and East of England and has a current annual passing rent of £0.7mn. As such the portfolio will be immediately earnings enhancing from completion (expected on or around 1 April) and will generate an expected inflation-linked leveraged yield in line with ReSI plc's 8% total return and c.5% dividend targets.

The homes benefit from annual uncapped RPI-linked rent increases, with an average outstanding lease term of 95 years. The leases are fully repairing and insuring, and the portfolio's rental income is underpinned by residents' c. 40% average ownership stake in the homes.

The portfolio will be managed by ReSI Property Management Limited in line with the best practice approach set out in Gresham House's shared ownership customer and environmental charters.

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Notes to Editors

About ReSI plc

Residential Secure Income plc ("ReSI plc" LSE: RESI) is a real estate investment trust (REIT) focused on delivering secure, inflation-linked returns with a focus on two resident sub-sectors in UK residential - independent retirement rentals and shared ownership - underpinned by an ageing demographic and untapped and strong demand for affordable home ownership.

ReSI plc targets a secure, long-dated, inflation-linked dividend of 5.16 pence per share p.a. (paid quarterly) and a total return in excess of 8.0% per annum. Including recently committed acquisitions, ReSI plc's portfolio comprises 3,050 properties, with an (unaudited) IFRS fair value as at 31 December 2021 of £351m.

ReSI plc's purpose is to deliver affordable, high quality, safe homes with great customer service and long-term stability of tenure for residents. We achieve this through meeting demand from housing developers, housing associations, local authorities, and private developers for long-term investment partners to accelerate the development of socially and economically beneficial affordable housing.

ReSI plc's subsidiary, ReSI Housing Limited, is a for-profit Registered Provider of Social Housing. As a long-term, private-sector landlord within the social housing regulatory environment, ReSI Housing Limited provides a unique proposition to its housing developer partners given its ability to acquire affordable housing that is either funded by government grant or is subject to Section 106 planning restrictions. Acquisitions are limited to homes with sufficient cashflows, counterparty credit quality and property security and can support long‑term investment grade equivalent debt. ReSI plc does not manage or operate stock and uses experienced and credit-worthy managers.

ReSI plc is managed by ReSI Capital Management Limited, whose immediate parent company, TradeRisks Limited, has been active within the social housing sector for over 20 years as a funding arranger and advisor and, over the last five years, as an investor through ReSI plc.

ReSI Capital Management and its parent, TradeRisks, were acquired by Gresham House in March 2020.

About Gresham House and Gresham House Real Estate

Gresham House is a London Stock Exchange quoted specialist alternative asset management group, dedicated to sustainable investments across a range of strategies, with expertise across forestry, real estate, sustainable infrastructure, renewable energy and battery storage, public and private equity. Gresham House is committed to operating responsibly and sustainably, taking the long view in delivering sustainable investment solutions.

Gresham House Real Estate offers long term equity investments into UK housing, through listed and unlisted housing investment vehicles, each focused on addressing different areas of the affordable housing problem. Each fund aims to deliver stable and secured inflation linked returns whilst providing social and environmental benefits to its residents, the local community, and the wider economy.

Gresham House's UK housing expertise was bolstered through the acquisition in March 2020 of TradeRisks and its fund management subsidiary, ReSI Capital Management, that have an unparalleled track record in the social housing sector over 20 years as a funding arranger and advisor and, over the last five years, as an investor.

Our 25-strong professional housing investment team has an average of 17 years' relevant experience, with expertise across all residential asset classes including shared ownership, retirement, affordable, social and market rented homes, offering unparalleled access to opportunities across the sector.

Further information on ReSI plc is available at www.resi-reit.com, and further information on Gresham House is available at www.greshamhouse.com. However, please note neither the content of ReSI's website or Gresham House's (or any other website) nor the content of any website accessible from hyperlinks on ReSI's website, Gresham House's website (or any other website) is incorporated into, or forms part of, this Announcement.