Completion of first acquisition with purchase of £100 million retirement portfolio
Residential Secure Income plc (“ReSI”) (LSE: RESI), which invests in residential asset classes that comprise the stock of UK social housing providers, is pleased to announce the completion of its first acquisition with the purchase of a Rental Homes portfolio comprising 1,341 retirement properties (the “Portfolio”) for a total consideration of approximately £100 million.
The UK-wide Portfolio is concentrated in Southern England and comprises long-leasehold or freehold interests in primarily one and two bedroom modern, warden-assisted flats spread over more than 250 purpose-built retirement housing blocks. The Portfolio provides RPI-linked assured tenancies to retirement-aged residents, offering lifetime security of tenure.
The Portfolio is operated by Places for People group which is responsible for day-to-day management, rent collection and maintenance of the Portfolio.
ReSI Capital Management Limited (the “Fund Manager”) has received a number of offers from institutional funders for long-dated investment grade equivalent debt secured on the Portfolio which will deliver equity returns in excess of ReSI’s total return target. The Fund Manager is working to complete the debt transaction with its preferred funder.
The Fund Manager has also identified a number of asset management opportunities to make operational improvements within the Portfolio, which have the potential to enhance returns.
The Portfolio is immediately income producing allowing ReSI to achieve its stated intention of declaring its first dividend for the period ending 31 December 2017, and the acquisition will enable ReSI to enter the REIT regime.
The Fund Manager continues to progress the execution of approximately £250 million of Shared Ownership transactions which are now expected to be contracted in early 2018. ReSI therefore expects that the net proceeds of the IPO, plus leverage, will be fully-deployed within the nine-month period referred to in ReSI’s IPO prospectus.
“We are delighted to have completed our first investment with the acquisition of such a strong portfolio of properties serving the retirement sector, an important and growing segment of demand. The Portfolio is operated by one of the leading social housing providers in the Places for People group, and furthers our ambition to become the leading capital partner to social housing providers. We will now continue to progress the execution of our £250 million pipeline and remain excited by the scale of opportunities available across the sector.”
Ben Fry, Investment Manager of ReSI Capital Management Limited
For more information, please contact :
ReSI Capital Management Limited
Jonathan Slater, Chief Executive
Ben Fry, Investment Manager
Alex Pilato, Director
+44 (0) 20 7382 0900
Jefferies International Limited
+44 (0) 20 7029 8000
+44 (0) 20 3737 1000