ReSI acquires local authority housing in Luton for over £21m
Residential Secure Income plc (ReSI), which invests in residential asset classes that comprise the stock of UK social housing providers, has announced that it has exchanged contracts to acquire for a total consideration of £21.3m.
This consists of a freehold residential building benefitting from a lease to a local authority and used to provide housing under the local authority’s statutory obligations.
The acquisition is due to complete on or before June 29, 2018, from when it will immediately be income producing to ReSI.
Ben Fry, ReSI’s fund manager, said: “By investing capital in good quality, modern housing, we can help local authorities meet their obligations to provide accommodation without relying on expensive and short-tenure solutions such as hotels or hostels.
“Investments such as this provide ReSI shareholders with a local-authority backed, inflation-linked income stream underpinned by the continuing strong demand for such accommodation.”
The building has recently undergone a full refurbishment, which was completed in 2016, and contains 134 self-contained residential flats.
The building is located in the centre of Luton and is let to the local authority on leases with a weighted average remaining term of just over seven years, which the company will seek to extend or renew in due course.
Luton, along with many areas across the country and especially in South East England, is said to have a critical shortage of both affordable and market housing, exacerbated by the impact of reforms to the Local Housing Allowance.
Following completion of this acquisition ReSI will have invested £155m of the proceeds raised at its IPO in assembling a portfolio which now comprises 1,772 residential units.