Innovative new agreement provides a benchmark which could unlock the development of much needed shared ownership homes in the UK

Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in affordable shared ownership, retirement and local authority housing announces that it has entered into a new £300 million, ultra long term secured debt facility with the Universities Superannuation Scheme (“USS”), one of the UK’s largest pension schemes. The new 45-year facility is drawable against acquisitions over the next three years and represents the first standalone investment grade financing secured for shared ownership, a sector where growth and supply have been constrained by a lack of long term institutional debt.

The facility provides ReSI with long term and low cost funds to achieve full income generation and subsequently grow its shared ownership portfolio. The RPI-linked debt has an annual coupon of 0.461% whilst the debt principal will inflate in line with the RPI linked rent in ReSI’s shared ownership leases, with an RPI collar of 0% and 5% p.a. The debt was arranged for ReSI by TradeRisks Limited and is interest only for the first three years and then will fully amortise over its remaining 42 years, with the fixed amortisation payments representing approximately 2 to 3 per cent of the principle per annum. Reflecting no refinancing risk and the strength of the shared ownership cashflows, the facility’s covenants are cashflow based, rather than valuation linked, thus ensuring covenant compliance is fully in ReSI’s control.

ReSI will initially draw down £34 million of the facility, which, following the completion of the previously announced acquisition of the final 73 homes at Clapham Park, will be secured against its 166-unit shared ownership portfolio located in Totteridge and Clapham Park in London, with a carrying value of £68 million at the drawdown date. After this initial drawdown, ReSI has a loan to value (“LTV”) ratio of 43% and an extended weighted average debt maturity of 23 years (from 19 years), and its average cost of debt is now reduced to 2.7% (from 3.3%).

ReSI will pay no commitment fees on undrawn amounts and expects to make further drawdowns from the new facility as it continues to grow its shared ownership portfolio, with c.£36 million expected to be deployed into an identified pipeline of shared ownership opportunities in the near term.

Shared Ownership has proven highly defensive throughout the COVID-19 crisis, with rent underpinned by owners’ mortgage providers, with ReSI continuing to progress first tranche sales throughout the second quarter with 24 net new sales. Of the 166 homes in ReSI’s shared ownership portfolio, as at 30 June 2020, 60 homes were occupied, 42 are reserved and in sales progression with a further 64 remaining available for shared owners.

ReSI’s shared ownership strategy was enhanced by award of Investment Partner status, announced in March 2020, by Homes England , to ReSI’s wholly owned for-profit Registered Provider of social housing, which on the same status awarded by the Greater London Authority in January 2019. This Homes England award allows ReSI to extend its shared ownership portfolio outside of London by accessing Homes England's £4.7 billion Shared Ownership and Affordable Homes Programme 'SOAHP' 2016-21 and a further £13 billion of grant funding to be allocated from 2021-22.

Alex Pilato, CEO of ReSI Capital Management, commented: “This is significant milestone both for ReSI, as well as the social housing sector, representing the first standalone investment grade debt financing secured for shared ownership. The facility has been obtained at an extremely attractive rate with a great partner in USS and maintains our stated strategy of securing long term amortising investment grade debt which ensures asset quality, whilst minimising refinancing and covenant risk as well as interest rate exposure”.

Ben Fry, Investment Manager of ReSI Capital Management, commented: “The facility will allow us to complete ReSI’s deployment into our attractive pipeline of shared ownership opportunities working with a range of existing and new partners. Shared ownership provides significant social impact through delivering affordable homes near employment for key workers whilst providing an excellent, secure inflation-linked investment for ReSI.

We remain steadfast in our conviction that shared ownership is the most effective solution to lack of affordability and permanent fit for purpose homes, a view which has been enhanced during the current pandemic. Having identified shared ownership as a very scalable investment opportunity, we expect to focus our future deployment in this area, leveraging our strong relationships with housing associations and large housebuilders.”

Ben Levenstein, Head of Private Credit, USS Investment Management, commented: “This investment will provide highly attractive inflation-linked cash flows to help pay our members’ pensions, while at the same time making a positive social Impact. As a long-term, responsible investor, USS has been looking to make an investment in social housing for some time and we are pleased to be able to announce a long term partnership with ReSI. This investment will not only drive growth for ReSI, but also deliver much-needed supply to key workers and others looking for affordable homes.”

Eamon Ray, Senior Director, USS Investment Management commented: “We are pleased to be able to support the provision of affordable shared ownership homes throughout the UK, partnering with the team at ReSI to create a unique financing structure within the housing sector. This facility is an exciting opportunity to create a significant scale portfolio of affordable homes, delivering long-dated inflation-linked cashflows to USS with asset and cash flow backing.”


ReSI Capital Management Limited / Gresham House plc

Ben Fry

Alex Pilato

+44 (0) 20 7382 0900

Jefferies International Limited

Stuart Klein

Tom Yeadon

+44 (0) 20 7029 8000

FTI Consulting

Richard Sunderland

Claire Turvey

Richard Gotla

+44 (0) 20 3727 1000



About Residential Secure Income plc

Residential Secure Income plc (LSE: RESI) is a real estate investment trust (REIT) listed on the premium segment of the Main Market of the London Stock Exchange with the objective of delivering secure inflation linked returns by investing in affordable shared ownership, retirement and Local Authority housing throughout the UK. ReSI targets a secure, long-dated, inflation-linked dividend of 5.0 pence per share p.a. (paid quarterly) and a total return in excess of 8.0% p.a. and has to date committed c. £300 million, assembling a portfolio of 2,680 properties.

ReSI aims to make a meaningful contribution to alleviating the UK housing shortage by meeting demand from housing developers (Housing Associations, Local Authorities and private developers) for long-term investment partners to accelerate the development of socially and economically beneficial new affordable housing. ReSI's subsidiary, ReSI Housing Limited, is registered as a for-profit Registered Provider of Social Housing, and so provides a unique proposition to its housing developer partners, being a long term private sector landlord within the social housing regulatory environment. As a Registered Provider, ReSI Housing can acquire affordable housing subject to s106 planning restrictions and housing funded by government grant.

Acquisitions by ReSI are limited to homes with sufficient cashflows, counterparty credit quality and property security to be capable of supporting long-term investment grade equivalent debt. ReSI does not manage or operate stock and uses experienced and credit-worthy third-party managers.

ReSI is managed by ReSI Capital Management Limited, a wholly owned subsidiary of TradeRisks Limited which has a 19-year track record of executing transactions within the UK social housing sector and, to date, has arranged funding of over £11 billion in the social housing, care and other specialist residential property sectors.

TradeRisks Limited and ReSI Capital Management Limited were acquired on 4 March 2020 by Gresham House plc, the specialist alternative asset management business which is listed on the London Stock Exchange and now has c.£3 billion of assets under management. Gresham House plc provides funds, direct investments and tailored investment solutions, including co-investment across a range of highly differentiated alternative investment strategies. The Group’s expertise includes timber, renewable energy, housing and infrastructure, strategic public and private equity (private assets). It aims to deliver sustainable financial returns and is committed to building long-term partnerships with clients (institutions, family offices, high-net-worth individuals, charities and endowments and private individuals) to help them achieve their financial goals. Shareholder value creation will be driven by long-term growth in earnings as a result of increasing AUM and returns from invested capital.

Further information on ReSI is available at

Further information on Gresham House is available at

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