Residential Secure Income reports annuals, 18% NAV total return since admission – Residential Secure Income (RESI), which invests in affordable shared ownership, retirement and local authority housing, has announced its annual results for the 12 months to 30 September 2019.
Financial highlights
- IFRS NAV total return of 8.0p per share for the period;
- 3.9%, or £8.7m, uplift in the portfolio valuation during the year, driven primarily by inflation linked rent increases (£6.6m) and successful long-term, lease extensions in the retirement portfolio (£1.6m);
- Annualised net rental income increased 6.7% to £11.2m (30 September 2018: £10.5 million), representing a 5% net yield on capital deployed to income producing assets, which will increase in 2020 with inflation and as shared ownership portfolio comes on stream;
- 96% of rental income is subject to contractual inflation-linked rental uplifts;
- Total asset level drawn debt of £108.2m (30 September 2018: £51.6m) reflecting a gearing ratio of 36.3%;
- Total dividends declared for the period of 5 pence per share (in four equal quarterly instalments of 1.25 pence).
Portfolio highlights
- £83m invested or committed in 332 residential units during the year, bringing the total deployed since IPO to £302m. The portfolio now comprises 2,677 residential units valued at £321.3m (including £60.6m of committed acquisitions), across 655 unique locations serving shared ownership, retirement and local authority housing tenants;
- Social impact from portfolio of £731m, calculated by the social profit calculator, to be delivered over 25 years, representing £4.27 per share, through subsidised rents, wellbeing improvements to tenants, fiscal savings and wider economic benefits;
- Lease terms extended to 150 years on 279 retirement properties, adding value and increasing the average unexpired lease term of RESI’s retirement portfolio to 131 years.
Jonathan Slater, chief executive of ReSI Capital Management, the manager, said: “This strong set of results was underpinned by an uplift in portfolio valuation which was driven by a combination of contractual inflation-linked rental increases flowing through into valuation accretions, along and our own asset management initiatives. More recently we have focused on establishing our shared ownership portfolio, which will, once fully occupied, produce high-quality and sustainable income, to the benefit of our shareholders, whilst at the same time delivering significant social value.
“Our ambition remains to significantly grow the size of RESI to be able to achieve the benefits of scale, and we continue to generate a strong pipeline of potential investments to facilitate this. We have remained highly disciplined in selecting the transactions we are prepared to undertake and believe that this is fundamental to delivering the long-term secure returns expected by RESI’s shareholders.”
RESI: Residential Secure Income reports annuals, 18% NAV total return since admission