ReSI Housing Limited ReSI Housing Limited

Registered with the Regulator of Social Housing as a for-profit Registered Provider of social housing

Registered with the Regulator of Social Housing as a for-profit Registered Provider of social housing

Housing strategy >>

Residential Secure Income plc >>

ReSI Housing Limited (ReSI Housing) is a wholly-owned subsidiary of Residential Secure Income plc (ReSI) and is registered with the Regulator of Social Housing as a for-profit Registered Provider of social housing.

ReSI Housing is the first subsidiary of a publicly listed investment fund to become a Registered Provider and is thus a long term, private sector social housing landlord, keeping Housing Associations’ assets within the social housing regulatory environment.

The regulatory environment for social housing emphasises good governance and financial viability, which is embraced by our strategy and provides assurance to our Local Authority and Housing Association partners.

ReSI Housing allows Housing Associations to free up capital to fund new developments whilst maintaining responsibility for management, maintenance and letting.

Being a Registered Provider also allows the acquisition of properties designated as affordable accommodation or funded by government grant, expanding the range of opportunities available.

ReSI’s proposal to increase development capacity

ReSI is able to support the development of new homes, allowing Housing Associations and Local Authorities to deliver on profitable and socially beneficial development opportunities that they otherwise could not undertake due to financial risk constraints.

ReSI facilitates increased development by enabling Registered Providers to recycle the capital currently tied up in the ownership of properties, whilst maintaining their tenant interaction and property management.

ReSI can invest in or forward fund the following types of residential assets – on a full acquisition or joint venture basis:

Shared Ownership Housing

Affordable home ownership through part-buy, part-rent

Rental Housing

Comprising Market Rental Homes, Sub-Market Rental Homes and Functional Homes (e.g. care, supported living, retirement housing for residents with specific requirements)

 

How does ReSI achieve its goal?

ReSI’s cost of capital is very efficient, being 2.75% on a real basis. This is achieved since ReSI’s equity investors expect to receive a real dividend of 5% and long-term debt investors will lend 50% of ReSI’s asset value at a real yield of 0.5% or below. Taking into account ReSI’s annual running costs (as a % of assets) of 0.15% and RCM’s fees of 0.5%, then ReSI is able to deliver the return expected by equity investors by acquiring assets at an average risk-adjusted real yield across its portfolio of 3.4%.

ReSI seeks to provide stable rental income to its investors by holding assets indefinitely. ReSI is not looking to trade its investment to make returns and its financial model looks only to rent and has no reliance on capital appreciation. Thus, ReSI’s economic objectives match those of Housing Associations and Local Authorities who naturally want to support their existing tenants over the long-term rather than enhance returns through accelerated market sales.

ReSI raised £180m equity capital through an IPO on 12 July 2017 from over 40 investors, largely pension funds and wealth managers acting for individual savers (e.g. SIPPs ISAs, etc.). These investors have until now not had any way of accessing the full range of social housing investments and have considerable appetite for supporting vehicles such as ReSI which allow them to gain this exposure. ReSI’s public listing enables further issuance by ReSI to tap into this demand once the initial capital is invested.

Board

Residential Secure Income plc (ReSI)

A listed investment trust delivering secure inflated linked income from shared ownership and rented homes, boosting returns with ultra-long debt.

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