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

ReSI Housing Limited (ReSI Housing) is a wholly-owned subsidiary of Residential Secure Income plc (ReSI) and is authorised and regulated by 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 have become a Registered Provider. It is a long-term, private sector social housing landlord, and keeps 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 ReSI’s strategy and provides assurance to 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 those funded by government grant, thereby expanding the range of opportunities available.

ReSI Housing’s proposal to increase development capacity

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

How does Residential Secure Income plc (ReSI) achieve its goal?

ReSI’s cost of capital is very efficient, being 2.75% on a real basis, and enables it to acquire assets at an average risk-adjusted real yield across its portfolio of 3.4%. This is achieved because long-term debt investors lend 50% of ReSI’s asset value at a yield of 0.5%, which in turn enables ReSI to meet its equity investors expectations of a real 5% dividend after taking into account ReSI’s annual running costs (as a % of assets) of 0.15% and fund management fees of 0.5%.

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 £180mn of equity capital through an IPO on 12 July 2017 from over 40 investors, predominantly pension funds and wealth managers acting for individual savers (e.g. SIPPs ISAs, etc.).

These investors had not had until then any way of accessing the full range of social housing investments and have an opportunity 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.

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