REG - Residential Secure - Portfolio Update to 30 June 2023

Residential Secure IncomeAnnouncement

03/08/2023 07:00

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RNS Number : 1190I  Residential Secure Income PLC  03 August 2023

3 August 2023

Residential Secure Income plc

 

Net Asset Value and corporate update

 

Residential Secure Income plc ("ReSI plc") (LSE: RESI), which invests in
independent retirement living and shared ownership to deliver secure,
inflation-linked returns, is pleased to announce its unaudited third quarter
net asset value ("Net Asset Value" or "NAV") as at 30 June 2023 and to update
on recent corporate activity for the period.

 

Strong operational performance reflecting defensive nature of assets

·      Portfolio focused on direct leases with pensioners and part home
owners

·      Rent collection constistent at 99% for the quarter

·      Rental growth of 6.4% on 1,084 directly rented homes (33% of
portfolio) giving 2.5% like-for-like growth

·      99% shared ownership occupancy

·      Retirement occupancy continues at 94% in line with long-term
average occupancy

 

Valuations broadly flat with strong inflation-linked rent growth, offsetting
outward yield shift in the quarter

·      Total EPRA return for the quarter of 1.0% (0.9 pence per share
("p")) to give EPRA NTA of 88.6p (£164.1mn) as at 30 June

·      Driven by 0.4p, or 0.2%, increase in like-for-like investment
property values, as follows:

o 4.9p increase from inflation-linked rent reviews in the quarter

o 4.5p decrease resulting from a further 13 basis points outward yield shift

 

Resilient balance sheet with long-term and low-cost debt

·      Diverse portfolio of 3,298 homes worth £357mn

·      22-year average debt maturity, 90% fixed or hedged with low 2.5%
weighted average coupon

·      Loan-to-value ratio of 49%, down from 52% at 31 March 2023 and
reduced to 41% when including 20% reversionary surplus

 

Outlook

·      Acute need for more affordable homes with estimated need for
£34bn(1) of annual investment in the UK

·      Particular shortage of affordable homes for home ownership and
suitable accommodation for independent later living for the growing elderly
population

·      Strong rental inflation-linked growth expected to continue,
underpinned by lack of supply and increasing demand

·      Institutional appetite for residential income generating assets
remains strong

·      Continuing to focus on selective disposals of non-core assets, to
reduce floating rate debt levels. This aims to deliver less volatile and more
sustainable income, allowing ReSI plc to reposition the dividend for growth in
line with underlying inflation-linked rents

 

NAV movement

 

The movement in NAV between 31 March 2023 and 30 June 2023 (the "Period") is
as follows:

 

 

                                   EPRA NTA                         IFRS NAV
                                   £'mn   Pence per Ordinary Share  £'mn   Pence per Ordinary Share
 Net Asset Value at 31 March 2023  164.8  89.0                      166.6  90.0
 Net income for the Period         2.2    1.2                       2.2    1.2
 Property valuation change         0.7    0.4                       0.7    0.4
 Debt valuation / indexation(*)    (1.2)  (0.7)                     8.0    4.3
 Dividend paid                     (2.4)  (1.3)                     (2.4)  -1.3
 Net Asset Value at 30 March 2023  164.1  88.6                      175.1  94.6
 Total return                      1.7    0.9                       10.9   5.9

*In accordance with the EPRA Best Practice Recommendations, EPRA NTA reflects
the amortised cost of indebtedness, rather than its fair value, and thus the
EPRA NTA movement reflects the indexation of USS debt.

 

Ben Fry, Managing Director, Housing at Gresham House, commented:

 

"Underlying operational performance continues to be robust, with strong rental
growth, both on an absolute and a like-for-like basis. We continue to balance
rent increases and returns in a sustainable manner for both residents and
shareholders, which is evident through our high occupancy and strong demand.
There continues to be a shortage of high-quality affordable homes which should
continue to support valuations and provide a strong outlook for the
portfolio."

 

1. British Property Federation, and Legal & General, 2022

2. Excluding the finance lease gross

 

 

For further information, please contact:

 

 Gresham House Real Estate

 Ben Fry                    +44 (0) 20 7382 0900

 Sandeep Patel

 Peel Hunt LLP

 Luke Simpson               +44 (0) 20 7418 8900

 Huw Jeremy

 KL Communications          gh@kl-communications.com (mailto:gh@kl-communications.com)

 Charles Gorman             +44 (0) 20 3995 6673

 Charlotte Francis

 

About ReSI plc

 

Residential Secure Income plc ("ReSI plc"" LSE: RESI) is a real estate
investment trust (REIT) focused on delivering secure, inflation-linked returns
with a focus on two resident sub-sectors in UK residential - independent
retirement rentals and shared ownership - underpinned by an ageing demographic
and untapped and strong demand for affordable home ownership.

 

As at 30 June 2023 ReSI plc's portfolio comprises 3,298 properties, with an
(unaudited) IFRS fair value of £357 mn(2).

 

ReSI plc's purpose is to deliver affordable, high-quality, safe homes with
great customer service and long-term stability of tenure for residents. We
achieve this through meeting demand from housing developers, housing
associations, local authorities, and private developers for long-term
investment partners to accelerate the development of socially and economically
beneficial affordable housing.

 

ReSI plc's subsidiary, ReSI Housing Limited, is registered as a for-profit
Registered Provider of social housing, and so provides a unique proposition to
its housing developer partners, being a long-term private sector landlord
within the social housing regulatory environment. As a Registered Provider,
ReSI Housing can acquire affordable housing subject to s106 planning
restrictions and housing funded by government grant.

 

About Gresham House and Gresham House Real Estate

 

Gresham House is a London Stock Exchange quoted specialist alternative asset
manager committed to operating responsibly and sustainably, taking the long
view in delivering sustainable investment solutions.

Gresham House Real Estate has an unparalleled track record in the affordable
housing sector over 20 years, with senior members having an average of c.30
years' experience.

 

Gresham House Real Estate offers long-term equity investments into UK housing,
through listed and unlisted housing investment vehicles, each focused on
addressing different areas of the affordable housing problem. Each fund aims
to deliver stable and secure inflation-linked returns whilst providing social
and environmental benefits to its residents, the local community, and the
wider economy.

 

Further information on ReSI plc is available at www.resi-reit.com
(http://www.resi-reit.com) , and further information on Gresham House is
available at www.greshamhouse.com (http://www.greshamhouse.com)

 

 

 

 

 

 

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