Residential Secure Income plc (“ReSI”), is a recently launched closed-ended investment company established to invest in Social Housing as a real estate investment trust. 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, raising £180 million in its IPO.
ReSI invests in residential asset classes that comprise the stock of registered UK social housing providers, Housing Associations and Local Authorities. In an environment of reduced government grant, amongst other financial constraints, the investment ReSI provides enables Registered Providers to continue delivering socially and economically beneficial new developments.
ReSI targets, on a fully invested and geared basis, a secure, long-dated, inflation-linked dividend yield of 5.0% p.a. (paid quarterly) and a total return in excess of 8.0% p.a. (assuming 2.5% RPI) based on the issue price of 100 pence per Ordinary Share¹. A strong pipeline of investment opportunities is driven by inbound requests from social housing providers seeking to recycle capital to fund further development.
ReSI Housing Limited, a wholly owned subsidiary of ReSI, is a Registered Provider of social housing regulated by the Regulator of Social Housing.
ReSI seeks to provide stable rental income to its investors by holding assets indefinitely. ReSI is not looking to trade its investment to make returns and its financial model looks only to rent and has no reliance on capital appreciation. Thus, ReSI’s economic objectives match those of Housing Associations and Local Authorities who naturally want to support their existing tenants over the long-term rather than enhance returns through accelerated market sales.
Key Investment Themes
Reduced UK government grant and other financial constraints are causing Housing Associations to seek third party equity capital
Similarly, Local Authorities are setting up housing companies to develop housing outside the core "Housing Revenue Account" and bring in third party capital
Demographic trends and a historical undersupply are driving growing demand for UK housing
This environment has now created a highly scalable, long-term investment opportunity to generate secure, inflation-linked returns
ReSI is being created in response to demands from Housing Associations and Local Authorities for:
Alternative financing routes to support their development ambitions
Investment partners to facilitate their provision of housing
knowledge and strong
ReSI has a fully independent board of highly experienced non-executive directors and has appointed ReSI Capital Management Limited, a wholy owned and separately regulated subsidiary of TradeRisks Limited, to act as its alternative investment fund manager. TradeRisks Limited is a treasury risk advisory firm and financing arranger focused on social housing and other specialist residential property sectors.
The Fund Manager group has adivsed on and arranged funding of over £10 billion in these sectors. It has advisory or transactional relationship with many of the larger UK housing associations, representing c. 1.2 million units of housing stock.
These are targets only and not profit forecasts and there can be no assurance they will be met
The acquisition pipeline is not dependent on ReSI Housing Limited being granted Registered Provider status