ReSI has successfully assembled a portfolio of 2,678 residential units, benefiting from:
Below market rents;
Diverse income stream from economically insensitive tenants; and/or
Strong counterparty covenants – shared equity tenants, Local Authorities
The existing portfolio comprises:
Helps first time buyers with small deposits onto the housing ladder by enabling them to purchase a 25-75% stake in a property and pay a below market rent on the remaining share
Functions like a large ground rent, so if the Shared Owner defaults on rent payments they void their stake in the property
Leases directly to Local Authorities, who have a statutory duty to house those who are homeless or threatened with homelessness
Rent around market rent minimises downside risk if Local Authority doesn’t renew lease and provide a cost saving to the Local Authority compared to alternatives
Rental payments are delinked to economy as tenants pay through pensions, housing benefits etc.
Includes properties used to house the property manager within the development they manage, with rent ultimately paid by the service charge of all leaseholders providing a very secure income stream
Shared Ownership Portfolio
Shared Ownership helps a wider range of buyers take their first steps onto the housing ladder by enabling them to purchase a share in a home with a smaller deposit and lower annual payments than would be required under help to buy or an outright purchase.
Shared Owners have the option to staircase (i.e. to purchase a bigger share in the property at the then market value), driving additional value gain for ReSI.
Shared Owners have 125/150 year leases, paying RPI +0.5% linked rent, similar to a large ground rent as if the Shared Owner defaults on rent payments they void their stake in the property.
The mortgage bank financing Shared Owners has an incentive to pay any rent arrears in order to preserve the value of their security.
Shared Ownership at a glance
166 new build apartments originally intended for private sale
Located at Metropolitan Thames Valley’s Clapham Park regeneration site and Crest Nicholson’s Totteridge Place Development
Managed by Metropolitan Thames Valley, a recognised market leader in Shared Ownership
Shared Ownership tenants responsible for repairs and maintenance
Homes Investment Partnership with Morgan Sindall announced in January 2019 gives exclusive access to £300m of future Shared Ownership pipeline
Local Authority Housing Portfolio
ReSI’s aim is to become a long-term partner to Local Authorities who have a statutory duty to house those who are homeless or at risk of homelessness.
ReSI’s focus is on acquiring properties in areas with the most need for accommodation and strong supply and demand dynamics.
Rents set around market rent levels provide a cost saving to Local Authorities, who are currently reliant on costly pay nightly accommodation and B&Bs (used to house 33% of households in temporary accommodation), as well as minimising downside risk to ReSI if the Local Authority doesn’t renew their lease.
ReSI provides Local Authorities with a long-term institutional landlord to replace the numerous individual landlords that Local Authorities currently rely upon and removes the difficulties that Local Authorities have with ensuring adequate standards across their rented estates
DSLG homelessness live table 775 (https://www.gov.uk/government/statistical-data-sets/live-tables-on-homelessness)
Local Authority Housing Portfolio at a glance
289 residential units in five freehold buildings
Leased to Luton Borough Council on 7-9 year lease terms (with Luton option to extend)
Over 4,000 homeless people in Luton – one in every 52 people
Recently refurbished in 2016 and 2017
Managed and maintained by Luton Borough Council and Mears. Luton take all letting risk
Annualised net rent of £9.4m
Secured £14m of 3 year debt partially fixed at a coupon of 2.56%
Retirement Housing Portfolio
Retirement Housing provides fit for purpose homes for retired people, allowing them to maintain their independence for longer, whilst offering a remedy to loneliness problems and freeing up family homes for families.
Residents are able to rent a retirement property through an assured tenancy, providing lifetime security of tenure without the burdens of home ownership, which can expose the resident to significant transaction costs on entry and on departure.
ReSI’s rental income is delinked to the economy as tenants pay their rent through pensions, housing benefits etc.
ReSI’s retirement portfolio includes properties used to the property manager within the development they manage, with rent ultimately paid by the service charges of all leaseholders in the development, providing a very secure income stream.
Retirement Housing Portfolio at a glance
1,933 units retirement rental homes in 640 purpose-built retirement housing blocks
290 licensed rental homes used to house property manager within the development they manage
Over 80% of the portfolio located in Southern England
Managed and maintained by the Places for People Group
Extended lease term on 1,282 properties to 150 years
Annualised net rent of £9.6m
Secured £97m of 25 year partially amortising fixed rate debt at a coupon of 3.46%