ReSI makes first acquisition under Homes England Investment Partner status
Residential Secure Income plc (ReSI) (LSE: RESI), which invests in affordable shared ownership, retirement and local authority housing, has acquired six new build homes for delivery as shared ownership from Metropolitan Thames Valley Housing, for a total consideration of GBP1.6 million.
This is ReSI’s first acquisition of homes outside London that has been part-financed by a Government grant, utilising the Homes England Investment Partner status that ReSI was awarded in March. Its GBP4.7 billion Shared Ownership and Affordable Homes Programme 2016-21, is designed to support housing at below-market rent levels, including shared ownership.
The properties are at Brampton Park in Huntingdonshire and consist of two, three and four-bedroom houses. All homes are under offer with shared owners and are expected to become occupied within the next month.
The acquisition brings ReSI's total shared ownership portfolio to 211 homes. It will be funded through ReSI's GBP300 million, 45-year debt facility that was put in place in July. Upon occupation, the homes will be fully income generating, with an expected inflation-linked leveraged yield in line with ReSI’s 8 per cent total return and c5 per cent dividend targets.
Last month, ReSI reported resilient rent collection, at over 99 per cent for June, in line with normal performance and unchanged through the Covid-19 pandemic, and a modest upward NAV valuation, reinforcing the secure nature of ReSI's cashflows.
Recent transactions include ReSI’s acquisition of 39 shared ownership homes in England’s north west in July. In January 2020, ReSI completed its acquisition of 59 shared ownership apartments at Clapham Park, London, also from Metropolitan Thames Valley Housing.
Ben Fry, Investment Manager of ReSI Capital Management, and Head of Housing at Gresham House, says: “The Brampton Park acquisition exemplifies our commitment to deploy cash into high-quality shared ownership schemes, leveraging our recently closed ultra-long-term debt facility. Brampton Park has nearby rural amenities for families. It also has excellent transport access both within Cambridgeshire and beyond to London, the Midlands and the North via the A1/A14 and East Coast Main Line. It’s well-suited to the latest flexible needs of key workers and families.”
“The Covid-19 pandemic has redoubled investors’ search for resilient, uncorrelated income opportunities, and customers’ needs for secure, affordable, housing. We’re delighted to support Homes England’s shared ownership objectives and continue our successful partnership with Metropolitan Thames Valley Housing through this latest acquisition.”