New Management Agreement for Retirement Housing Portfolio
Residential Secure Income plc ("ReSI") (LSE: RESI), which invests in affordable shared ownership, retirement and local authority housing, is pleased to announce that, following a competitive tender process, it has signed a new ten year management agreement with Places for People group, covering the day-to-day management, rent collection and maintenance of its 2,219-unit retirement housing portfolio.
The new contract incentivises Places for People to drive value in the portfolio by reducing voids and improving operational performance, and builds on Places for People’s existing management of the portfolio through its specialist retirement division, Girlings.
Places for People group own or manage nearly 200,000 homes across a wide range of housing tenures in the UK and is rated G1/V1 by the Regulator of Social Housing.
Purchased in 2017 and 2018, ReSI’s retirement housing portfolio now totals 2,219 properties. The ownership model’s defensive characteristics are underpinned by the security of the rental stream, with tenants primarily paying rent out of pensions and housing benefits rather than employment income, and so having low sensitivity to the economic cycle. Almost 25% (by net operating income) of the portfolio is used to house the individual managing the retirement home for ReSI and other leaseholders, providing additional rental security.
Pete Redman, of ReSI Capital Management Ltd, ReSI's fund manager, commented: “Following a competitive tender process, we are confident that, with the new contract structure and through working more closely together, Places for People is best placed to maximise returns from our retirement housing portfolio, with enhanced incentives to reduce voids and improve portfolio operating performance for the benefit of ReSI shareholders.”