Residential Secure Income buys flats in Luton – Residential Secure Income has announced the acquisition of four freehold residential buildings in Luton for a total consideration of GBP13.0 million. The buildings benefit from a 9.2 year lease to the local authority (with an option for the local authority to extend by 10 years) and are used to provide housing under the local authority’s statutory obligations, as well as back to work and support services to tenants. The buildings are operated by Mears, a leading provider of property and support services, and will immediately be income producing to ReSI.
The buildings have recently undergone a full refurbishment, completed in 2017, and contain 155 residential units. This is ReSI’s second acquisition in Luton, where ReSI is looking to be a long term partner of the local authority in providing affordable accommodation for its constituents. Luton, along with many areas across the UK and especially in south-east England, has a critical shortage of both affordable and market housing.
Mears is responsible for repairs to the flats and providing the support services, with the local authority bearing the letting risk. ReSI intends to leverage the acquisition with investment grade equivalent debt secured on the building to deliver equity returns at least in line with ReSI’s total return target.
Following this acquisition ReSI has now invested GBP168 million of the proceeds raised at IPO in assembling a portfolio which comprises 1,928 residential units.
Ben Fry of ReSI Capital Management Ltd, ReSI’s fund manager, said: “We continue to identify and acquire good quality and modern assets that offer a highly visible and long-term income stream, leveraging our sector and market knowledge as well as track record with local authorities.”
RESI : Residential Secure Income buys flats in Luton