ReSI Capital Management & Morgan Sindall Investments Target 1,500 New Shared Ownership Homes with a Major New £300 Million Residential Partnership Agreement
Residential Secure Income plc ("ReSI" or the "Company"), which invests in residential asset classes that comprise the stock of UK social housing providers, is pleased to announce that its fund manager ReSI Capital Management Ltd ("RCM") has entered into a new Housing Investment Partnership agreement ("HIP") with Morgan Sindall Investments Limited ("MSI"). The agreement aims to increase the supply of shared ownership homes, enabling more first time buyers in the UK to establish themselves on the housing ladder.
HIP creates an exclusive arrangement between RCM and MSI to provide access to a pipeline of institutional quality residential investment opportunities for its long term capital by utilising the market-leading expertise in social infrastructure and housing development of MSI and its other partners. HIP will initially target the delivery of 1,500 shared ownership homes with a value of up to £300 million.
ReSI made its first investment in shared ownership residential in October 2018, when it acquired a £16.5 million portfolio of 34 homes from Crest Nicholson, having last July become the first publicly listed investment fund, through its subsidiary ReSI Housing Ltd, to become a Registered Provider with the Regulator of Social Housing.
Having fully invested the proceeds of its IPO, ReSI intends to invest through HIP using proceeds from investment grade debt secured against the wider £240 million residential portfolio of c. 2,500 mixed tenure homes ReSI has built up since listing in July 2017.
The Government has identified the Shared Ownership model as a key initiative allowing single people, couples and families to get on the housing ladder. Prospective buyers are able to acquire an initial 25% to 75% share of a new property, and pay rent on the rest, with the option to incrementally increase their ownership over time.
The HIP agreement also demonstrates MSI's credentials as both a partner for blue chip real estate investors and underpins its offer to current and future local authority joint venture partners who face huge challenges around housing supply.
Lisa Scenna, Managing Director Morgan Sindall Investments said: "HIP highlights MSI's strong investment credentials and our ability to deploy large volumes of institutional capital into the residential market across our regeneration pipeline. Our partners will benefit from this initiative as HIP will significantly lower the barriers to homeownership and will benefit people who live in the communities where we work".
Jonathan Slater, Chief Executive of ReSI Capital Management Ltd, ReSI's fund manager, said:"This new partnership with Morgan Sindall Investments, part of one of the UK's leading construction and regeneration groups, is a further extension of our strategy to facilitate the much needed supply of new homes in the UK and enable more first time buyers to get a foot on the housing ladder through shared ownership, while at the same time delivering a secure, long term income stream to shareholders. This new agreement ensures a strong pipeline of units for ReSI to continue its investment programme in shared ownership through ReSI's registered provider of social housing, ReSI Housing Ltd, and further emphasises our ability to work with leading housing partners."
MSI was advised by GVA Residential Investment team which has a strong track record of transactions within the residential investment sector.