For-profit ReSI Housing to be sold as parent firm announces plan to wind down

ReSI Housing is set to be sold after its parent company announced its intention to wind down.

The for-profit registered provider of social housing is a subsidiary of Residential Secured Income Trust plc (ReSI), a real estate investment trust managed by asset manager Gresham House.

In a statement to the market published today, ReSI’s board announced it would propose to shareholders that the company adopt a managed wind-down and portfolio realisation strategy.

Housing Today understands that the board intends to sell its for-profit RP’s portfolio as a package to a new long-term owner, rather than selling off individual properties.

Gresham House’s (GH) second registered provider, ReSI Homes, will be unaffected by the announcement, as it falls under the ownership of a different corporate entity, Residential Secure Income LP.

Ben Fry, managing director of housing at Gresham House, said that the “adverse macroeconomic environment prevailing since September 2022” had proved difficult for listed real estate funds.

“That said, now that interest rates have plateaued and are on a falling trajectory, we are starting to see that trading volumes in the investment property market are starting to increase,” he said. 

“Buyers are targeting high-quality real estate portfolios with strong inflation-linked revenue streams, such as the ReSI plc portfolio. That should facilitate an orderly realisation of assets. 

“We will seek long-term trusted custodians for ReSI plc’s portfolio, always ensuring that the interests of residents are protected.”

In its announcement to the market explaining its decision to wind down, the company explained that its market capitalisation of £101m was of a size which “might deter some potential investors due to lower share liquidity”, with increasing demand among investors for larger listed funds.

“In addition, the Company’s shares have, since September 2022, traded at a persistent, material discount to the Company’s net asset value,” it said.

After engagement with shareholders and advisers, ReSi’s board and Gresham concluded that “a proactive approach” which will see the company wound down is the “appropriate course of action and in the best interests of the Company’s shareholders”.

This is to be achieved through a portfolio realisation strategy which “prioritises maximisation of proceeds from portfolio sales whilst ensuring the interests of residents are protected, and a subsequent return of capital to shareholders”.

ReSI, which launched, has a property portfolio comprised of 3,125 homes as of 30 June 2024.

Of these, 2,234 were independent retirement rental homes, 757 were shared ownership homes and 134 were homes providing local authority accommodation.

ReSI plc’s sole remaining local authority asset has now exchanged for sale at a price marginally in excess of book value, with completion scheduled to occur by the end of 2024.

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Rob Whiteman, chairman of ReSI plc, said: “The headwinds for smaller listed real estate businesses have been well flagged, and there are no quick fixes. 

“The Board and Fund Manager are focused on maximising returns to all shareholders. 

“Having explored a range of options with our advisors, the Board has decided that the best course of action is a proactive managed wind-down and portfolio realisation strategy over an appropriate time period. 

“We will be asking shareholders to approve this at a general meeting in due course.  

“On behalf of the Board, I would like to thank our shareholders for their continued support of the Company and its portfolio, as well as Gresham House Asset Management, our Fund Manager, for its active management of the portfolio and focus on delivering in the best interests of our shareholders.”