Appointment of new property manager for retirement housing portfolio
Residential Secure Income plc, which invests in affordable shared ownership, retirement and local authority housing, is pleased to announce that is has entered into a new agreement with a subsidiary of its Investment Manager, ReSI Capital Management Limited (the “Investment Manager” and, together with its subsidiaries, the “Investment Manager Group”), which will allow the Investment Manager Group to provide additional property management services to the Company with respect to its retirement housing portfolio.
The Company’s property management services are currently being provided by Girlings, an external third-party provider, and as part of the new arrangements, the Girlings team will be employed directly by a new subsidiary of the Investment Manager with the changes expected to come into effect in July 2021. This will allow this team to focus solely on managing homes for ReSI and RCML, building on their successful management of ReSI’s retirement housing portfolio for over 20 years for ReSI and previous owners.
It is envisaged that the property management services will be provided for an initial term of 5 years with the new arrangements providing several advantages for ReSI primarily around performance which include lower ongoing charges, reduced dependence on external third parties outside of the Investment Manager Group and hence improved accountability of key service providers, the potential for improved sourcing of investment ideas as the property and investment manager function is now combined in one group, and the potential for the Investment Manager Group to better manage portfolio voids.
The Company will also benefit from lower pricing for the services versus its current arrangements. The Company expects to save approximately £0.2 million per annum as a result of these new arrangements however it will also contribute approximately £0.3 million towards the set up costs. The Investment Manager Group is providing these services at cost.
The Investment Manager is a related party of the Company under Chapter 11 of the FCA's Listing Rules and therefore the additional services to be provided constitute a smaller related party transaction under Listing Rule 11.1.10.
Robert Whiteman CBE, Chairman of ReSI said:
“We are delighted to conclude these discussions with our Investment Manager. The new property management arrangements will simplify and provide increased accountability over the Company’s key service providers, create operational efficiencies including in areas such as transaction sourcing and void management, and produce ongoing cost savings.”
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 2,870 properties, with an (unaudited) IFRS fair value of £329m.
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, whose immediate parent company, TradeRisks Limited (“TradeRisks”), has been active within the social housing sector for over 19 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