ReSI Capital Management Limited

21-26 Garlick Hill,

London EC4V 2AU

0207 3820900

resi@resicm.com

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resi@fticonsulting.com

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ReSI acquires 132 apartments for use as shared ownership for £60 million

April 1, 2019

Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in affordable shared ownership, retirement and local authority housing, is pleased to announce it has exchanged contracts to acquire 132 new build apartments (the “Portfolio”), located at Clapham Park, in the London Borough of Lambeth, for a total acquisition cost of £60 million. The apartments are being purchased from Metropolitan Thames Valley Housing (“MTVH”), one of the UK’s largest Housing Associations, who will retain management of the Portfolio, continuing the long term partnership between both parties.

 

ReSI intends to convert the 1, 2 and 3 bedroom apartments into Shared Ownership homes, utilising grant funding from the Greater London Authority’s Homes for Londoners programme.  Shared Ownership allows a purchaser to buy a property with a lower deposit requirement and with lower annual costs, making the apartments more affordable and allowing individuals and families to get onto the housing ladder.

 

The Portfolio is intended to be held through ReSI’s wholly owned subsidiary ReSI Housing Limited (“ReSI Housing”), which is regulated as a for-profit Registered Provider of social housing.  The Portfolio will be acquired in two phases using a mix of existing cash resources and debt and is due to complete in September and December respectively, at which point ReSI will have a fund level LTV over 40%.

 

The Portfolio, which is located between Clapham, Brixton, Streatham and Balham, forms part of MTVH’s regeneration project on the Clapham Park estate which will deliver 2,500 new homes of which 700 have already been delivered, a community hub, a new community centre and new shops. The acquisition will enable MTVH to recycle the proceeds into further developments thus supporting MTVH in the delivery of new homes.

 

This acquisition follows ReSI’s first investment in Shared Ownership in October, when it acquired a £16.5 million portfolio of 34 homes from Crest Nicholson, which is also managed by MTVH. The transaction further reinforces ReSI’s focus on growing its portfolio of Shared Ownership properties through acquisitions from developers and housebuilders, both private and housing associations, utilising government grant funding and bulk discounts, and allowing ReSI to increase the supply of affordable accommodation.

 

Ben Fry of ReSI Capital Management Ltd, ReSI's fund manager, said: “This is a further example of how ReSI is able to contribute positively to the delivery of affordable housing in the UK and demonstrates our ability to acquire Shared Ownership portfolios through partnerships with Housing Associations. ReSI has now developed an exciting pipeline of Shared Ownership housing with a range of institutional partners, including Crest Nicolson, Morgan Sindall and MTVH.”

 

Kush Rawal, Director of Residential Investment at Metropolitan Thames Valley, added: “We are delighted to have sold these private homes to ReSI and to be responsible for their onward delivery as Shared Ownership. Clapham Park is one of the most important urban regeneration schemes and is treated as such within this key borough. As one of the largest providers of affordable housing, our continuing involvement with this vital project gives us the opportunity to provide much needed affordable housing in an area where there is high demand”

 

-End-

               

FOR FURTHER INFORMATION, PLEASE CONTACT:

 

 

 

ReSI Capital Management Limited / TradeRisks Limited

Ben Fry

Jonathan Slater

Mark Rogers

Alex Pilato

Richard Stubbs

 

+44 (0) 20 7382 0900

 

Jefferies International Limited

Stuart Klein

Gary Gould

 

+44 (0) 20 7029 8000

 

FTI Consulting                                                                                  

Richard Sunderland                                                           

Claire Turvey

Richard Gotla

 

+44 (0) 20 3727 1000

Email: resi@fticonsulting.com

 

NOTES:

Background

 

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 a discounted 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. ReSI Housing has subsequently become an investment partner with the Greater London Authority allowing ReSI Housing to obtain grant funding to support new affordable 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 shared ownership and rental portfolios of Homes across residential asset classes that comprise the stock of Housing Associations and Local Authorities throughout the UK. To date it has committed c. £300 million, comprising a portfolio of 2,674 properties, across 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 an 18 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 accelerate development of 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.

 

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