Acquisition of 39 shared ownership homes

8 July 2020

Residential Secure Income plc

Acquisition of 39 shared ownership homes

Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in affordable Shared Ownership, retirement and Local Authority housing, has acquired 39 shared ownership homes for a total consideration of £3.5 million including deferred payments. The properties have been purchased from Step Forward Homes, which specialises in the provision of homes for key workers, in particular the Armed Forces and Emergency Services personnel.

The portfolio is located across the north west of England and comprises 24 two and three bedroom homes that will be immediately income generating, enhancing ReSI's dividend cover. The remaining 15 homes will be acquired by ReSI within six months once construction is completed and the homes are occupied. The acquisition brings ReSI's total shared ownership portfolio to 205 homes and is funded through ReSI's new ultra-long term £300 million debt facility.

Gary Metcalf, Director at Step Forward Homes said: "The proceeds from this timely sale will be recycled into the development of further, much needed affordable homes for key workers. This is the first transaction we have worked on with the team at ReSI and we are looking forward to building a longer term relationship with them as Step Forward works to create a lasting social impact."

Ben Fry, Investment Manager of ReSI Capital Management, commented: "We are particularly pleased to have completed this transaction against the current backdrop where many families, particularly those of key workers, are facing challenging situations where we can help meet a clear need. This is a portfolio of high quality homes that further expands our shared ownership exposure and enables us to support housing delivery at a time when the supply is starved."

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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 c. £300 million, assembling a portfolio of 2,700 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, the specialist alternative asset management business which is listed on the London Stock Exchange and now has c.£3 billion of assets under management. Gresham House plc provides funds, direct investments and tailored investment solutions, including co-investment across a range of highly differentiated alternative investment strategies. The Group's expertise includes timber, renewable energy, housing and infrastructure, strategic public and private equity (private assets). It aims to deliver sustainable financial returns and is committed to building long-term partnerships with clients (institutions, family offices, high-net-worth individuals, charities and endowments and private individuals) to help them achieve their financial goals. Shareholder value creation will be driven by long-term growth in earnings as a result of increasing AUM and returns from invested capital.

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

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