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 units (the “Portfolio”), located at Clapham Park, in the London Borough of Lambeth.
The units are being purchased from Metropolitan Thames Valley Housing (“MTVH”), one of the UK’s largest and best respected 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 units into Shared Ownership homes, utilising government grant funding. Shared Ownership allows purchaser to buy at a much lower deposit requirement and with lower annual costs, making the units more affordable and allowing individuals and families, otherwise priced out of the market, 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 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 Metropolitan Thames Valley Housing’s (“MTVH”) regeneration project on the Clapham Park estate and will comprise a mix of one, two and three bedroom apartments. MTVH, one of the largest housing associations and a recognised leader in Shared Ownership, will be the long term managing agent for the Portfolio as part of its partnership with ReSI.
The Clapham Park estate regeneration project by MTVH will deliver 2,500 new homes, a community hub, a new community centre and new shops, of which 700 have already been delivered, and gives ReSI great confidence in the long term value of the Portfolio.
ReSI’s £60m acquisition will enable MTVH to recycle the proceeds into further developments thus supporting MTVH in the delivery of new homes.
This acquisition, which follows ReSI’s first investment in Shared Ownership in October, when it acquired a £16.5 million portfolio of 34 homes from Crest Nicholson, 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 allowing ReSI to increase the supply of affordable accommodation in London.
Burak Varisli, Avison Young said: “Among the growing volumes of private capital invested into affordable housing sector, this transaction is a significant milestone not only because it will provide 132 units of additional shared ownership units into the sector, but it also demonstrates the formation of a long-term partnership between MTVH and ReSI with the alignment of their interests for the benefit of the affordable housing sector.”
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 affordable housing being delivered across London. The acquisition also demonstrates our ability to acquire Shared Ownership portfolios through partnerships with developing housing associations, andstrengthensour partnership withMetropolitan Thames Valley Housing. ReSI has now developed an exciting pipeline of shared ownership housing with a range of institutional partners, including Crest Nicolson, Morgan Sindall and Metropolitan Thames Valley Housing.”
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.”