Residential Sec Regulatory News (RESI)

16 May 2018

Residential Secure Income plc

£31.2 MILLION AQUISITION OF A LICENSED RETIREMENT PORTFOLIO

Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in residential asset classes that comprise the stock of UK social housing providers, is pleased to announce that it has exchanged contracts to acquire a Licensed Rental Homes portfolio comprising 277 properties (the "Portfolio") for a total consideration of approximately £31.2 million. The acquisition is due to complete on or before 30 May 2018, from when it will immediately be income producing.

The Portfolio is, with minor exceptions, subject to a fully repairing and insuring perpetual licence, which provides an upwards-only RPI linked rental stream. The Portfolio is licensed to First Port, the UK's largest residential property management group, and used to house the retirement property managers required under headlease obligations.

The Portfolio is concentrated in Southern England and comprises long-leasehold interests (with average remaining term of 116 years) in primarily two bedroom, modern flats.  The Portfolio overlaps with the retirement developments included in ReSI's existing portfolio of 1,358 retirement flats, and will provide operational efficiencies. These retirement developments are focused on independent living and do not include the provision of care services.

The acquisition is being funded from cash resources and will be leveraged after acquisition with long-dated investment grade equivalent debt secured on the Portfolio. The acquisition is being made at a discount to open market value and will, after leverage, deliver an equity return in excess of ReSI's targets.

FOR FURTHER INFORMATION, PLEASE CONTACT: 

FTI Consulting +44 (0) 20 3737 1000

Richard Sunderland Email: resi@fticonsulting.com

Claire Turvey

Richard Gotla

NOTES:

Residential Secure Income plc (LSE: RESI) is listed on the premium segment of the Official List of the UK Listing Authority and was admitted to trading on the Main Market of the London Stock Exchange in July 2017.

ReSI has been established to invest in portfolios of Homes across residential asset classes that comprise the stock of Housing Associations and Local Authorities, comprising Shared Ownership Homes and Rental Homes (being Market Rental Homes, Functional Homes and Sub-Market Rental Homes) throughout the UK.

ReSI is managed by ReSI Capital Management Limited, a wholly owned subsidiary of TradeRisks Limited which has a 17 year track record of executing transactions within the UK social housing sector and, to date, has arranged funding of over £10 billion in the social housing, care and other specialist residential property sectors.

ReSI seeks to deliver secure, long-dated, inflation-linked income returns through investment in UK social housing. It aims to meet demand from Housing Associations and Local Authorities for alternative equity-like financing sources that allows them to recycle capital back into socially and economically beneficial new housing, making a meaningful contribution to the UK housing shortage.

Homes acquired by ReSI will predominantly be on a freehold or long leasehold basis (typically 99 years or more to maturity) and benefit from long term (typically 20 years plus) inflation-adjusted cash flows. Acquisitions by ReSI will be limited to Homes with sufficient cashflows, counterparty credit quality and property security that allow the Fund Manager to arrange long-term investment grade equivalent debt.

Further information on ReSI is available at www.resi-reit.com 

IMPORTANT INFORMATION:

The contents of this announcement, which have been prepared by and are the sole responsibility of ReSI, have been approved by the Fund Manager as a financial promotion solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000.

Save to the extent otherwise defined herein, terms used in this announcement shall, unless the context otherwise requires, bear the meanings given to them in the prospectus published by ReSI dated 22 June 2017.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond ReSI's control and all of which are based on ReSI's board of directors' current beliefs and expectations about future events. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. Any forward looking statements reflect ReSI's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to ReSI's business, the results of operations, financial condition prospects, growth and dividend policy of ReSI and the industry in which it operates. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. ReSI expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

This announcement may include references to potential transactions each of which is subject to satisfactory completion of negotiations and due diligence by the Fund Manager and its professional advisers and there can be no certainty that the ReSI will complete any of these transactions.