3 August 2023

Residential Secure Income plc

Net Asset Value and corporate update

Residential Secure Income plc ("ReSI plc") (LSE: RESI), which invests in independent retirement living and shared ownership to deliver secure, inflation-linked returns, is pleased to announce its unaudited third quarter net asset value ("Net Asset Value" or "NAV") as at 30 June 2023 and to update on recent corporate activity for the period.

Strong operational performance reflecting defensive nature of assets

·      Portfolio focused on direct leases with pensioners and part home owners

·      Rent collection constistent at 99% for the quarter

·      Rental growth of 6.4% on 1,084 directly rented homes (33% of portfolio) giving 2.5% like-for-like growth

·      99% shared ownership occupancy

·      Retirement occupancy continues at 94% in line with long-term average occupancy

Valuations broadly flat with strong inflation-linked rent growth, offsetting outward yield shift in the quarter

·      Total EPRA return for the quarter of 1.0% (0.9 pence per share ("p")) to give EPRA NTA of 88.6p (£164.1mn) as at 30 June

·      Driven by 0.4p, or 0.2%, increase in like-for-like investment property values, as follows:

o 4.9p increase from inflation-linked rent reviews in the quarter

o 4.5p decrease resulting from a further 13 basis points outward yield shift

Resilient balance sheet with long-term and low-cost debt

·      Diverse portfolio of 3,298 homes worth £357mn

·      22-year average debt maturity, 90% fixed or hedged with low 2.5% weighted average coupon

·      Loan-to-value ratio of 49%, down from 52% at 31 March 2023 and reduced to 41% when including 20% reversionary surplus

Outlook

·      Acute need for more affordable homes with estimated need for £34bn¹ of annual investment in the UK

·      Particular shortage of affordable homes for home ownership and suitable accommodation for independent later living for the growing elderly population

·      Strong rental inflation-linked growth expected to continue, underpinned by lack of supply and increasing demand

·      Institutional appetite for residential income generating assets remains strong

·      Continuing to focus on selective disposals of non-core assets, to reduce floating rate debt levels. This aims to deliver less volatile and more sustainable income, allowing ReSI plc to reposition the dividend for growth in line with underlying inflation-linked rents

NAV movement

The movement in NAV between 31 March 2023 and 30 June 2023 (the "Period") is as follows:

*In accordance with the EPRA Best Practice Recommendations, EPRA NTA reflects the amortised cost of indebtedness, rather than its fair value, and thus the EPRA NTA movement reflects the indexation of USS debt.

Ben Fry, Managing Director, Housing at Gresham House, commented:

"Underlying operational performance continues to be robust, with strong rental growth, both on an absolute and a like-for-like basis. We continue to balance rent increases and returns in a sustainable manner for both residents and shareholders, which is evident through our high occupancy and strong demand. There continues to be a shortage of high-quality affordable homes which should continue to support valuations and provide a strong outlook for the portfolio."

1. British Property Federation, and Legal & General, 2022

2. Excluding the finance lease gross

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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.

As at 30 June 2023 ReSI plc's portfolio comprises 3,298 properties, with an (unaudited) IFRS fair value of £357 mn².

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 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.

About Gresham House and Gresham House Real Estate

Gresham House is a London Stock Exchange quoted specialist alternative asset manager committed to operating responsibly and sustainably, taking the long view in delivering sustainable investment solutions.

Gresham House Real Estate has an unparalleled track record in the affordable housing sector over 20 years, with senior members having an average of c.30 years' experience.

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 secure inflation-linked returns whilst providing social and environmental benefits to its residents, the local community, and the wider economy.

Further information on ReSI plc is available at www.resi-reit.com, and further information on Gresham House is available at www.greshamhouse.com