Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in affordable shared ownership, retirement and local authority housing, is pleased to announce it has exchanged contracts to acquire 132 new build apartments (the “Portfolio”), located at Clapham Park, in the London Borough of Lambeth, for a total acquisition cost of £60 million. The apartments are being purchased from Metropolitan Thames Valley Housing (“MTVH”), one of the UK’s largest Housing Associations, who will retain management of the Portfolio, continuing the long term partnership between both parties.
ReSI intends to convert the 1, 2 and 3 bedroom apartments into Shared Ownership homes, utilising grant funding from the Greater London Authority’s Homes for Londoners programme. Shared Ownership allows a purchaser to buy a property with a lower deposit requirement and with lower annual costs, making the apartments more affordable and allowing individuals and families to get onto the housing ladder.
The Portfolio is intended to be held through ReSI’s wholly owned subsidiary ReSI Housing Limited (“ReSI Housing”), which is regulated as a for-profit Registered Provider of social housing. The Portfolio will be acquired in two phases using a mix of existing cash resources and debt and is due to complete in September and December respectively, at which point ReSI will have a fund level LTV over 40%.
The Portfolio, which is located between Clapham, Brixton, Streatham and Balham, forms part of MTVH’s regeneration project on the Clapham Park estate which will deliver 2,500 new homes of which 700 have already been delivered, a community hub, a new community centre and new shops. The acquisition will enable MTVH to recycle the proceeds into further developments thus supporting MTVH in the delivery of new homes.
This acquisition follows ReSI’s first investment in Shared Ownership in October, when it acquired a £16.5 million portfolio of 34 homes from Crest Nicholson, which is also managed by MTVH. The transaction further reinforces ReSI’s focus on growing its portfolio of Shared Ownership properties through acquisitions from developers and housebuilders, both private and housing associations, utilising government grant funding and bulk discounts, and allowing ReSI to increase the supply of affordable accommodation.
Ben Fry of ReSI Capital Management Ltd, ReSI's fund manager, said: “This is a further example of how ReSI is able to contribute positively to the delivery of affordable housing in the UK and demonstrates our ability to acquire Shared Ownership portfolios through partnerships with Housing Associations. ReSI has now developed an exciting pipeline of Shared Ownership housing with a range of institutional partners, including Crest Nicolson, Morgan Sindall and MTVH.”
Kush Rawal, Director of Residential Investment at Metropolitan Thames Valley said, “We are delighted to have sold these private homes to ReSi and to be responsible for their onward delivery as shared ownership. Clapham Park is one of the most important urban regeneration schemes and is treated as such within this key borough. As one of the largest providers of affordable housing, our continuing involvement with this vital project gives us the opportunity to provide much needed affordable housing in an area where there is high demand."