Acquisition of 191 income-generating, shared ownership homes
ReSI agreed transfer deal with Orbit, one of England's leading housing associations
Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in affordable shared ownership, retirement and local authority housing, has acquired 191 shared ownership homes from Orbit, one of England's leading housing associations, for cash consideration of £16 million. The diversified portfolio comprises 180 houses and 11 apartments, located across 18 counties in England. All these homes are currently occupied and income generating.
The average share of homes already owned by the residents is 43%. Shared ownership allows a purchaser to buy a property with a lower deposit requirement and lower annual costs, making the homes more affordable. The Orbit portfolio is immediately earnings-enhancing and brings ReSI's total shared ownership portfolio to 549 homes. The acquisition will be funded through ReSI's £300 million, 45-year debt facility that was put in place in July 2020.
Ben Fry, investment manager of ReSI Capital Management, and head of housing investment at Gresham House, said:
"We are delighted to agree this £16 million acquisition from Orbit, which was facilitated by the new property management team joining ReSI Capital Management, as we announced last week. The homes will follow ReSI's best practice approach, as set out in our shared ownership customer and environmental charters.
"Rising demand, and historic undersupply, means a growing need for affordable housing, 94% of which is currently provided by not-for-profits such as Orbit. ReSI's ability to provide these organisations with new capital supports their development of much needed new affordable homes. We look forward to working further with Orbit in the future."
Mark Hoyland, Group Chief Executive at Orbit added:
"The transfer of these shared ownership properties is part of our portfolio densification strategy, driving operational efficiencies for Orbit and supporting the delivery of more affordable new homes.
"This opportunity attracted significant market interest and we are delighted that ReSI, as a long-term owner which shares our values, was successful. As a sector leading developer of affordable homes, the proceeds of this deal will fund further much needed homes in our key operational areas, supporting both our mission to build thriving communities and to help address the critical lack of affordable housing in England."
FOR FURTHER INFORMATION, PLEASE CONTACT:
ReSI Capital Management Limited / Gresham House Housing
+44 (0) 20 7382 0900
Jefferies International Limited
+44 (0) 20 7029 8000
+44 (0) 20 7029 8000
Notes to Editors
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% per annum. Including recent committed acquisitions, ReSI's portfolio comprises 3,061 properties, with an (unaudited) IFRS fair value of £345m.
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 managers.
ReSI is managed by ReSI Capital Management Limited, whose immediate parent company, TradeRisks Limited, has been active within the social housing sector for over 20 years as a funding arranger and advisor and, over the last three years, as an investor through ReSI.
ReSI Capital Management and its parent, TradeRisks, were acquired by Gresham House plc in March 2020, further increasing the investment expertise available to ReSI. The housing investment team at Gresham House plc has 15 members and growing, with an average of 20 years' relevant experience, covering fund management, housing investment, social housing management and financial and risk expertise.
Gresham House plc is a London Stock Exchange quoted specialist alternative asset manager committed to operating responsibly and sustainably, taking the long view in delivering sustainable investment solutions.
Further information on ReSI is available at www.resi-reit.com
Further information on Gresham House plc is available at www.greshamhouse.com