TIDMRESI
RNS Number : 4134X
Residential Secure Income PLC
24 November 2017
24 November 2017
Residential Secure Income plc
COMPLETION OF FIRST ACQUISITION WITH PURCHASE OF GBP100 MILLION
RETIREMENT PORTFOLIO
Residential Secure Income plc ("ReSI") (LSE: RESI), which
invests in residential asset classes that comprise the stock of UK
social housing providers, is pleased to announce the completion of
its first acquisition with the purchase of a Rental Homes portfolio
comprising 1,341 retirement properties (the "Portfolio") for a
total consideration of approximately GBP100 million.
The UK-wide Portfolio is concentrated in Southern England and
comprises long-leasehold or freehold interests in primarily one and
two bedroom modern, warden-assisted flats spread over more than 250
purpose-built retirement housing blocks. The Portfolio provides
RPI-linked assured tenancies to retirement-aged residents, offering
lifetime security of tenure.
The Portfolio is operated by Places for People group which is
responsible for day-to-day management, rent collection and
maintenance of the Portfolio.
ReSI Capital Management Limited (the "Fund Manager") has
received a number of offers from institutional funders for
long-dated investment grade equivalent debt secured on the
Portfolio which will deliver equity returns in excess of ReSI's
total return target. The Fund Manager is working to complete the
debt transaction with its preferred funder.
The Fund Manager has also identified a number of asset
management opportunities to make operational improvements within
the Portfolio, which have the potential to enhance returns.
The Portfolio is immediately income producing allowing ReSI to
achieve its stated intention of declaring its first dividend for
the period ending 31 December 2017, and the acquisition will enable
ReSI to enter the REIT regime.
The Fund Manager continues to progress the execution of
approximately GBP250 million of Shared Ownership transactions which
are now expected to be contracted in early 2018. ReSI therefore
expects that the net proceeds of the IPO, plus leverage, will be
fully-deployed within the nine-month period referred to in ReSI's
IPO prospectus.
Ben Fry, Investment Manager of ReSI Capital Management Limited,
commented:
"We are delighted to have completed our first investment with
the acquisition of such a strong portfolio of properties serving
the retirement sector, an important and growing segment of demand.
The Portfolio is operated by one of the leading social housing
providers in the Places for People group, and furthers our ambition
to become the leading capital partner to social housing providers.
We will now continue to progress the execution of our GBP250
million pipeline and remain excited by the scale of opportunities
available across the sector."
FOR FURTHER INFORMATION, PLEASE CONTACT:
ReSI Capital Management Limited
Jonathan Slater, Chief Executive
Ben Fry, Investment Manager
Alex Pilato, Director +44 (0) 20 7382 0900
Jefferies International Limited
Stuart Klein
Gary Gould +44 (0) 20 7029 8000
FTI Consulting +44 (0) 20 3737 1000
Richard Sunderland Email: resi@fticonsulting.com
Claire Turvey
Richard Gotla
NOTES:
Residential Secure Income plc (LSE: RESI) is listed on the
premium segment of the Official List of the UK Listing Authority
and was admitted to trading on the Main Market of the London Stock
Exchange in July 2017.
ReSI has been established to invest in portfolios of Homes
across residential asset classes that comprise the stock of Housing
Associations and Local Authorities, comprising Shared Ownership
Homes and Rental Homes (being Market Rental Homes, Functional Homes
and Sub-Market Rental Homes) throughout the UK.
ReSI is managed by ReSI Capital Management Limited, a wholly
owned subsidiary of TradeRisks Limited which has a 16 year track
record of executing transactions within the UK social housing
sector and, to date, has arranged funding of over GBP10 billion in
the social housing, care and other specialist residential property
sectors.
ReSI seeks to deliver secure, long-dated, inflation-linked
income returns through investment in UK social housing. It aims to
meet demand from Housing Associations and Local Authorities for
alternative equity-like financing sources that allows them to
recycle capital back into socially and economically beneficial new
housing, making a meaningful contribution to the UK housing
shortage.
Homes acquired by ReSI will predominantly be on a freehold or
long leasehold basis (typically 99 years or more to maturity) and
benefit from long term (typically 20 years plus) inflation-adjusted
cash flows. Acquisitions by ReSI will be limited to Homes with
sufficient cashflows, counterparty credit quality and property
security that allow the Fund Manager to arrange long-term
investment grade equivalent debt.
ReSI is targeting, on a fully invested and geared basis, a
dividend yield of 5% per annum based on the issue price of 100
pence per Ordinary Share, which ReSI expects to increase broadly in
line with inflation, and a total return in excess of 8% per
annum(1) .
1. This is a target only and not a profit forecast and there can
be no assurance that it will be met.
Further information on ReSI is available at
www.resi-reit.com
IMPORTANT INFORMATION:
The contents of this announcement, which have been prepared by
and are the sole responsibility of ReSI, have been approved by the
Fund Manager as a financial promotion solely for the purposes of
section 21(2)(b) of the Financial Services and Markets Act
2000.
Save to the extent otherwise defined herein, terms used in this
announcement shall, unless the context otherwise requires, bear the
meanings given to them in the prospectus published by ReSI dated 22
June 2017.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements involve known and unknown risks and uncertainties, many
of which are beyond ReSI's control and all of which are based on
ReSI's board of directors' current beliefs and expectations about
future events. These forward-looking statements may be identified
by the use of forward-looking terminology, including the terms
"believes", "estimates", "plans", "projects", "anticipates",
"expects", "intends", "may", "will" or "should" or, in each case,
their negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or
intentions. These forward-looking statements include all matters
that are not historical facts. Forward-looking statements may and
often do differ materially from actual results. Any forward looking
statements reflect ReSI's current view with respect to future
events and are subject to risks relating to future events and other
risks, uncertainties and assumptions relating to ReSI's business,
the results of operations, financial condition prospects, growth
and dividend policy of ReSI and the industry in which it operates.
Forward-looking statements speak only as of the date they are made
and cannot be relied upon as a guide to future performance. ReSI
expressly disclaims any obligation or undertaking to update, review
or revise any forward-looking statement contained in this
announcement whether as a result of new information, future
developments or otherwise.
This announcement may include references to potential
transactions each of which is subject to satisfactory completion of
negotiations and due diligence by the Fund Manager and its
professional advisers and there can be no certainty that the ReSI
will complete any of these transactions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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