Residential Secure Income acquires 68 income-generating shared ownership homes
Residential Secure Income, which invests in affordable shared ownership, retirement and local authority housing, has acquired 68 income-generating shared ownership homes from Metropolitan Thames Valley Housing, for a total consideration of GBP5.1 million.
This transaction follows the successful partnership between ReSI and Metropolitan Thames Valley Housing in London and Cambridgeshire which delivered 138 shared ownership homes during 2020.
The properties, located in a modern development in Swindon, comprise 53 apartments and 15 houses, in low-rise brick buildings. The average share already owned by residents in their homes is 44 per cent. Shared ownership allows a purchaser to buy a property with a lower deposit requirement and lower annual costs, making the homes more affordable. The properties are immediately earnings enhancing for ReSI and generate an expected inflation-linked leveraged yield in line with ReSI’s 8 per cent total return and c5 per cent dividend targets.
The acquisition brings ReSI's total shared ownership portfolio to 358 homes and will be funded through ReSI's GBP300 million, 45-year debt facility that was put in place in July 2020. In January 2021, ReSI reported resilient rent collection, at more than 99 per cent for the quarter ending in December 2020, unchanged throughout the Covid-19 pandemic and in line with normal performance. This supported investment valuations, increasing by 0.6 per cent for the quarter.
ReSI continues to deploy capital to reach its target 50 per cent leverage, with recent shared ownership deals including the purchase of 85 homes for delivery as shared ownership from Croydon Council’s development company Brick by Brick in December 2020.
Ben Fry, Investment Manager of ReSI Capital Management, and Head of Housing at Gresham House, says: “We are excited to acquire another portfolio of homes from Metropolitan Thames Valley Housing, further strengthening our existing partnership. The acquisition represents further delivery against our targets to meet full dividend cover by the beginning of October 2021.”
Kush Rawal, Director of Residential Development at Metropolitan Thames Valley Housing, adds: “Accelerating our sale of these mature shared ownership homes through our expanding partnership with ReSI allows us to reinvest proceeds into our ambitious development programme, helping address the critical lack of affordable housing in England.”