Residential Secure Income REIT acquires 277 property portfolio
Residential Secure Income REIT acquires 277 property portfolio – Residential Secure Income REIT (RESI) is invested in residential asset classes that comprise the stock of UK social housing providers (mainly Housing Associations and Local Authorities) in order to provide secure, long-dated, inflation-linked income returns with the potential for capital growth and with low sensitivity to residential house prices.
The company has announced that it has exchanged contracts to acquire a licensed rental homes (retirement) portfolio comprising 277 properties for a total consideration of approximately £31.2 million. [QD comment: This is only the second acquisition since it was launched in July 2017 and the company’s low level of activity is likely to be a key factor behind why the company has been trading at a discount to NAV]
According to the company, the portfolio is, with minor exceptions, subject to a fully repairing and insuring perpetual licence, which provides an upwards-only RPI linked rental stream. The portfolio is licensed to First Port, a UK-based residential property management group, and used to house the retirement property managers required under headlease obligations. It is concentrated in the southern of England and comprises long-leasehold interests (with average remaining term of 116 years) in primarily two bedroom, modern flats. The portfolio overlaps with the retirement developments included in RESI’s existing portfolio of 1,358 retirement flats, and will provide operational efficiencies. These retirement developments are focused on independent living and do not include the provision of care services.
RESI : Residential Secure Income REIT acquires 277 property portfolio