Residential Sec Regulatory News (RESI)

14 September 2020

Residential Secure Income plc

First acquisition under Homes England Investment Partner status

Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in affordable shared ownership, retirement and local authority housing, has acquired six new build homes for delivery as shared ownership from Metropolitan Thames Valley Housing, for a total consideration of £1.6 million.

This is ReSI's first acquisition of homes outside London that has been part-financed by a Government grant, utilising the Homes England Investment Partner status that ReSI was awarded in March. Its £4.7 billion Shared Ownership and Affordable Homes Programme 2016-21, is designed to support housing at below-market rent levels, including shared ownership.

The properties are at Brampton Park in Huntingdonshire and consist of two, three and four-bedroom houses. All homes are under offer with shared owners and are expected to become occupied within the next month.

The acquisition brings ReSI's total shared ownership portfolio to 211 homes. It will be funded through ReSI's £300 million, 45-year debt facility that was put in place in July. Upon occupation, the homes will be fully income generating, with an expected inflation-linked leveraged yield in line with ReSI's 8% total return and c. 5% dividend targets.

Last month, ReSI reported resilient rent collection, at over 99% for June, in line with normal performance and unchanged through the Covid-19 pandemic, and a modest upward NAV valuation, reinforcing the secure nature of ReSI's cashflows.

Recent transactions include ReSI's acquisition of 39 shared ownership homes in England's north west in July. In January 2020, ReSI completed its acquisition of 59 shared ownership apartments at Clapham Park, London, also from Metropolitan Thames Valley Housing.

Ben Fry, Investment Manager of ReSI Capital Management, and Head of Housing at Gresham House, commented:

"The Brampton Park acquisition exemplifies our commitment to deploy cash into high-quality shared ownership schemes, leveraging our recently closed ultra-long-term debt facility. Brampton Park has nearby rural amenities for families. It also has excellent transport access both within Cambridgeshire and beyond to London, the Midlands and the North via the A1/A14 and East Coast Main Line. It's well-suited to the latest flexible needs of key workers and families."

"The Covid-19 pandemic has redoubled investors' search for resilient, uncorrelated income opportunities, and customers' needs for secure, affordable, housing. We're delighted to support Homes England's shared ownership objectives and continue our successful partnership with Metropolitan Thames Valley Housing through this latest acquisition".

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Notes to Editors

About Residential Secure Income plc

Residential Secure Income plc (LSE: RESI) is a real estate investment trust (REIT) listed on the premium segment of the Main Market of the London Stock Exchange with the objective of delivering secure inflation linked returns by investing in affordable shared ownership, retirement and Local Authority housing throughout the UK.

ReSI targets a secure, long-dated, inflation-linked dividend of 5.0 pence per share p.a. (paid quarterly) and a total return in excess of 8.0% p.a. and has to date committed £306 million, assembling a portfolio of 2,724 properties.

ReSI aims to make a meaningful contribution to alleviating the UK housing shortage by 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 new affordable housing. ReSI's subsidiary, ReSI Housing Limited, is registered as a for-profit Registered Provider of Social Housing, and so provides a unique proposition to its housing developer partners, being a long term private sector landlord within the social housing regulatory environment. As a Registered Provider, ReSI Housing can acquire affordable housing subject to s106 planning restrictions and housing funded by government grant.

Acquisitions by ReSI are limited to homes with sufficient cashflows, counterparty credit quality and property security to be capable of supporting long‑term investment grade equivalent debt. ReSI does not manage or operate stock and uses experienced and credit-worthy third-party managers. 

ReSI is managed by ReSI Capital Management Limited, a wholly owned subsidiary of TradeRisks Limited which has a 19-year track record of executing transactions within the UK social housing sector and, to date, has arranged funding of over £11 billion in the social housing, care and other specialist residential property sectors.

TradeRisks Limited and ReSI Capital Management Limited were acquired on 4 March 2020 by Gresham House plc.

About Gresham House plc

Gresham House is a specialist alternative asset management group, dedicated to sustainable investments across a range of strategies, with expertise across forestry, housing, infrastructure, renewable energy and battery storage, public and private equity.

Our origins stretch back to 1857, while our focus is on the future and the long term. Quoted on the London Stock Exchange (GHE:LN) we actively manage c.£3.3bn of assets on behalf of institutions, family offices, charities and endowments, private individuals and their advisers. We act responsibly within a culture of empowerment that encourages individual flair and entrepreneurial thinking.

As a signatory to the UN-supported Principles for Responsible Investment (PRI), our vision is to always make a positive social or environmental impact, while delivering on our commitments to shareholders, employees and investors.

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

Further information on Gresham House is available at www.greshamhouse.com