ReSI acquires 34 new build properties for use as shared ownership for £16.45 million
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 it has exchanged contracts to acquire 34 new build homes (“the Properties”) located in the London Borough of Barnet, which it intends, using government grant funding, to convert into Shared Ownership homes.
The Properties are being purchased from housebuilder Crest Nicholson for a total consideration of £16.45 million and form part of Crest Nicholson’s Totteridge Place development, a collection of 124 contemporary houses and apartments on Whetstone High Road. ReSI will hold the Properties through its wholly owned subsidiary ReSI Housing Limited (“ReSI Housing”), which is regulated as a for-profit Registered Provider of social housing and expects to complete on the majority of the acquisitions by the end of October. Metropolitan Thames Valley Housing, one of the largest housing associations and a recognised leader in Shared Ownership, will act as managing agent for the Properties.
The mix of one, two and three bedroom properties, held by ReSI on a long-leasehold basis of 250 years, will be converted into Shared Ownership units which allow a wider range of first time buyers to get onto the housing ladder.
The acquisition will be leveraged post acquisition with long-dated investment grade equivalent debt secured against the portfolio.
ReSI intends to grow its portfolio of Shared Ownership properties through further acquisitions from developers and housebuilders (both private and housing associations), utilising government grant funding.
David Orr, non-executive chairman of ReSI Housing, said: “We are excited that ReSI Housing is combining private sector equity with grant funding to enable the provision of further shared ownership homes, allowing new buyers to take their first steps onto the housing ladder. This transaction shows how those for-profit providers that are long-term asset holders can make a positive contribution to the social housing sector, by enabling developers to accelerate their development ambitions and increase the provision of affordable homes.”
Ben Fry of ReSI Capital Management Ltd, ReSI's fund manager, said: “Closing our first shared ownership acquisition, in partnership with Crest Nicholson and Metropolitan Thames Valley Housing, is a significant milestone and the start of what we anticipate will be long-term partnerships with both organisations. Becoming a Registered Provider positions ReSI Housing to support the delivery of affordable accommodation across the UK, whilst at the same time identifying new ways to leverage our private and public-sector relationships to deploy capital into long term, visible income streams.”
FOR FURTHER INFORMATION, PLEASE CONTACT:
ReSI Capital Management Limited / TradeRisks Limited +44 (0) 20 7382 0900
Jefferies International Limited +44 (0) 20 7029 8000
FTI Consulting +44 (0) 20 3727 1000
Richard Sunderland Email: firstname.lastname@example.org
The Government has identified the Shared Ownership model as a key initiative allowing single people, couples and families to get on the housing ladder. Prospective buyers are able to acquire an initial 25% to 75% share of a new property, and pay rent on the rest, with the option to incrementally increase their ownership over time.
In July 2018, ReSI announced that it had, through ReSI Housing, become the first publicly listed investment fund to become a Registered Provider with the Regulator of Social Housing, and, earlier this month, that David Orr, the former chief executive of the National Housing Federation, had been appointed as independent non-executive Chairman of ReSI Housing.
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. £240 million, acquiring a portfolio of 2,487 properties, comprising a mixture of shared ownership, 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.