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REIT buys 182 shared ownership homes in £21m cash deal
Real estate investment trust (REIT) Residential Secure Income (ReSI) has agreed a deal to add 182 shared ownership properties to its growing portfolio.
The publicly listed vehicle, which is owned by investment firm Gresham House, said today it has agreed to acquire the properties for £21m in cash.
The identity of the party ReSI is buying the homes from was not disclosed in the filing announcing the deal.
The REIT currently has £39m of shared ownership transactions “underway”, according to Gresham House’s annual results published this week.
ReSI, which also owns for-profit registered provider ReSI Housing, said the 182 properties are “fully occupied” and “primarily located” in the South East and East of England, without offering more detail.
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“The homes benefit from annual uncapped retail price index-linked rent increases, with an average outstanding lease term of 95 years,” ReSI said in the filing.
On average, owners have around a 40% stake in the properties, the firm said.
It said the homes will “generate an expected inflation-linked leveraged yield in line with ReSI plc’s 8% total return”.
The deal is expected to complete on or around 1 April.
ReSI has struck a number of deals for shared ownership properties in recent years.
A year ago it acquired 68 properties from Metropolitan Thames Valley. In the same month, the REIT announced it had bought 191 homes from Orbit.
In January 2021, ReSI snapped up 85 shared ownership homes from Croydon Council’s beleaguered development firm Brick by Brick, which is soon to close down.
Last May, the REIT said it owned 549 shared ownership homes and has not publicly announced anymore acquisitions until today.
ReSI, which also invests in the independent retirement living sector, completed a £15m equity raise last month, according to Gresham House’s results.
The funds, along with “existing capital resources and an ultra-long-term debt facility”, are allowing the REIT to fully finance deals, the results document said.
In 2020, ReSI agreed a £300m debt facility with the University Superannuation Scheme, one of the UK’s largest pension schemes.
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