Residential Secure Income (RESI), the £106m real estate investment trust that entered a managed wind-down in October 2024, is struggling to sell its assets at the valuation in its books, although both the retirement and shared ownership portfolios are under offer with potential purchasers doing due diligence after a competitive bidding process.
In annual results for the year to 30 September, chair Robert Whiteman said: “Pricing indications for both portfolios align more closely with prevailing market sentiment than with historical valuations, reflecting the cautious investment climate rather than the operational performance of the assets.” The company’s shares reflect this standing on a wide 37% discount to net asset value.
Gresham House fund managers Mike Adams and Sandeep Patel said: “RESI delivered a resilient operational performance during the year, with like-for-like rental growth of 3.4%, record retirement occupancy of 97%, rent collection above 99%, and adjusted earnings per share increasing 11% to 5.7p per share, resulting in dividend coverage of 137%. However, valuations reflected broader market conditions, with a 50 basis point [0.5%] outward shift in the weighted average portfolio yield to 5.8% driving a 6.2% like-for-like reduction in property values to £287.4m and an EPRA NTA [net tangible assets] of 63.3p per share.”
Invesco Asia Dragon (IAD), the £900m Asia Pacific trust boosted by a merger with a rival Aberdeen-managed trust last year, has enjoyed a strong half-year since the combination. A re-rating of Asia equities on investors’ optimism about the region’s growth prospects, excitement about artificial intelligence, improved US and China relations and a weak dollar all helped the portfolio generate a 34.1% total return in the six months to 31 October. The total return for shareholders in the trust run by Ian Hargreaves and Fiona Yang came in at 37.2%, both significantly ahead of the MSCI AC Asia ex-Japan index return of 31.4%.
Baillie Gifford Shin Nippon (BGS) has published a circular detailing the 15% tender, priced at a 2% discount to NAV less costs, replacing a 15% tender that was scheduled for 2027. BGS is also offering a 100% performance-related tender offer in 2030, if its NAV per share total return does not equal or exceed the total return on the MSCI Japan Small Cap Index (in sterling terms) over a five year period from 31 December 2025 to 31 December 2030. However, reflecting the extent of the gap between now and 2030, BGS is also offering a continuation vote in 2028. The £338m Japan smaller companies, which saw Baillie Gifford last year install Brian Lum as its new lead manager to improve performance, is holding a general meeting on 18 February for shareholders to approve the tender offer. Shareholders have until 26 February to tender any of their shares if they wish to sell them. Investment platform voting deadlines will be earlier.
