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REIT to sell for-profit provider as part of wind-down
Residential Secure Income (ReSI) is to sell its for-profit subsidiary as part of the wider company’s plans to wind-down, Inside Housing understands.
The listed real estate investment trust (REIT), which is managed by investment firm Gresham House, said on Thursday 3 October that following a “review of options for maximising shareholder value”, it is proposing a “managed wind-down”.
The chair of ReSI said there were “no quick fixes” amid the tough economic conditions
For-profit registered provider ReSI Housing is a subsidiary of ReSI.
Inside Housing understands that ReSI will aim to sell the for-profit’s homes as a package, rather than as individual properties.
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London-based ReSI Housing – whose chair is David Orr, former boss of the National Housing Federation and current chair of Clarion – has been registered as a for-profit with the Regulator of Social Housing since July 2018.
As of September last year, it owned 766 shared ownership homes with a gross value of £123m, according to the firm’s last filed accounts at Companies House.
It had a post-tax loss of £1.8m on a revenue of £10.9m in the year to the end of September 2023.
Parent organisation ReSI is the second listed REIT to announce plans for a wind-down in the space of three months after Home REIT revealed this summer it would end its activities.
Rob Whiteman, chair of ReSI, said: “The headwinds for smaller listed real estate businesses have been well flagged, and there are no quick fixes.
“Having explored a range of options with our advisors, the board has decided that the best course of action is a proactive managed wind-down and portfolio realisation strategy over an appropriate time period.”
ReSI had already been selling off its local authority stock.
In a filing, ReSI said it shares have traded at a “persistent discount” to its “prevailing” net asset value per share. This has hindered its ability to “raise further capital, develop its portfolio and attract a wider range of investors”, the company said.
Across its portfolio, the firm also has 2,234 independent retirement rental homes and 134 homes providing local authority accommodation, as well as shared ownership homes.
In its filing, ReSI added: “Investment property market trading is starting to increase, with buyers targeting the acquisition of high-quality real estate portfolios with strong inflation-linked revenue streams, such as the ReSI plc portfolio, which should facilitate an orderly realisation of the portfolio over time.”
The company said it will be seeking shareholder approval for its plans at a general meeting in “due course”.
ReSI had been expanding quickly with a series of deals over the past few years. In 2022, the firm acquired 182 shared ownership homes for £21m in cash and bought 469 homes in another deal that year.
The news about ReSI comes nearly 10 months after Gresham House was acquired by New York investment firm Searchlight Capital. As a result, Gresham House was delisted from the London Stock Exchange.
Among ReSI’s board members is Elaine Bailey, former chief executive of Hyde. She joined as a non-executive director in 2020.
Inside Housing understands that ReSI Homes, another for-profit operated by Gresham House, is not affected. The provider is part of ReSI LP, a separate entity that is not affected.
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