ReSI Capital Management Limited

21-26 Garlick Hill,

London EC4V 2AU

0207 3820900

resi@resicm.com

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+44 (0) 20 3727 1000
resi@fticonsulting.com

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Retirement Homes Portfolio Acquired For £40.2 Million

September 10, 2018

Residential Secure Income plc ("ReSI" or the “Company”) (LSE: RESI), which invests in residential asset classes that comprise the stock of UK social housing providers, is pleased to announce that it has exchanged contracts to acquire a 478-property retirement homes portfolio (the “Portfolio”), from Places for People, one of the UK’s leading Housing Associations.  The consideration is £40.2million, generating a yield in line with ReSI’s previous retirement home acquisitions.


The acquisition has already completed for the large majority (421) of the properties, so immediately produces income, with completion of the remainder (57) anticipated within 3 months.  Heads of Terms have been agreed for long-dated investment grade equivalent debt secured on the Portfolio, providing leverage to deliver equity returns from the Portfolio at least in line with ReSI's total return target.  


The Portfolio consists primarily of one-bedroom flats and is located across 284 purpose-built retirement schemes, with over 93% located in Southern England, including in the Greater London area.  The properties are held on a long leasehold basis, with a weighted average unexpired lease term of 92 years.


In line with ReSI’s existing retirement homes, the Portfolio offers independent living and does not include the provision of care services.  The Portfolio is leased to retirement aged residents on RPI-linked assured tenancies which offer lifetime security of tenure.  The Portfolio will continue to be managed by Girlings, part of the Places for People Group, which is responsible for the day-to-day management, rent collection and maintenance.  


After this acquisition, ReSI will have invested £215 million in assembling a portfolio which comprises 2,414 residential units.   


Ben Fry of ReSI Capital Management Ltd, ReSI’s fund manager, said: “This acquisition complements our existing portfolio of retirement flats.   The Portfolio offers a later-life independent living solution with security of tenure but without the hassles of ownership, and serves a fast growing, yet hugely fragmented and under served, sector of the market.  Our strategy continues to be focused on delivering a secure, long term income stream to shareholders.  We are making good progress in building a high quality portfolio that meets these disciplined investment criteria, and expect this progress to continue.”  


-End-


FOR FURTHER INFORMATION, PLEASE CONTACT: 


ReSI Capital Management Limited / TradeRisks Limited                   +44 (0) 20 7382 0900

Ben Fry

Jonathan Slater

Mark Rogers

Alex Pilato

 

Jefferies International Limited                                                              +44 (0) 20 7029 8000

Stuart Klein

Gary Gould

 

FTI Consulting                                                                                         +44 (0) 20 3727 1000

Richard Sunderland                                                                     Email: resi@fticonsulting.com

Claire Turvey

Richard Gotla

 

About Residential Secure Income plc

 

Residential Secure Income plc (LSE: 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.

 

ReSI has been established to invest in portfolios of Homes across residential asset classes that comprise the stock of Housing Associations and Local Authorities, comprising Shared Ownership Homes and Rental Homes(being Market Rental Homes, Functional Homes and Sub-Market Rental Homes) throughout the UK. To date it has deployed c. £215 million, acquiring a portfolio of 2,414 properties, comprising a mixture of local authority and retirement housing.

 

ReSI is managed by ReSI Capital Management Limited, a wholly owned subsidiary of TradeRisks Limited which has a 17 year track record of executing transactions within the UK social housing sector and, to date, has arranged funding of over £10 billion in the social housing, care and other specialist residential property sectors.

 

ReSI seeks to deliver secure, long-dated, inflation-linked income returns through investment in UK social housing. It aims to meet demand from Housing Associations and Local Authorities for alternative equity-like financing sources that allows them to recycle capital back into socially and economically beneficial new housing, making a meaningful contribution to the UK housing shortage.

 

Homes acquired by ReSI will predominantly be on a freehold or long leasehold basis (typically 99 years or more to maturity) and benefit from long term (typically 20 years plus) inflation-adjusted cash flows. Acquisitions by ReSI will be limited to Homes with sufficient cashflows, counterparty credit quality and property security that allow the Fund Manager to arrange long-term investment grade equivalent debt.

 

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

 

 

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