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REIT strikes second deal with large housing association

A real estate investment trust (REIT) has struck a second deal with Places for People, the only large housing association to date to have worked with such a fund.

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A REIT has struck a second deal with Places for People, the only large housing association to have worked with such a fund #ukhousing

Residential Secure Income (RESI) REIT bought 478 properties – all in the retirement living sector – for £40.2m from the 60,000-home association, one of the UK’s largest.

The homes are mainly one-bedroom flats and are located across 284 purpose-built retirement schemes. More than 93% of them are in the South of England, especially in the Greater London area.

The properties will continue to be managed by the same organisation: Girlings, Places for People’s specialist lettings and management business for over-55s.


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This purchase brings the REIT to a total investment of £215m, but it still has yet to strike any deals on shared ownership, the area on which it had intended to focus.

This is just the fourth deal RESI has struck since it launched just over a year ago.

It saw its share price fall at the start of this year when a hedge fund pulled out, with the REIT blaming the difficulties faced by First Priority on the market’s cooling interest.

First Priority, a tiny housing association focusing on specialist supported housing, ran into financial problems this year, with the Regulator criticising it for “a fundamental failure of governance”.

That association, like most of those which have struck deals with REITs, based its entire business model on lease-based deals with investment funds.

RESI, on the other hand, does not do deals with small housing associations. So far, Places for People is the only social housing organisation to have worked with it.

Last November, it struck a £100m deal with Places for People, also for a portfolio of retirement housing.

Ben Fry, managing director of RESI Capital Management Ltd, RESI’s fund manager, said: “This acquisition complements our existing portfolio of retirement flats. The portfolio offers a later-life independent living solution with security of tenure but without the hassles of ownership, and serves a fast-growing, yet hugely fragmented and underserved, sector of the market.

“Our strategy continues to be focused on delivering a secure, long-term income stream to shareholders. We are making good progress in building a high-quality portfolio that meets these disciplined investment criteria, and expect this progress to continue.”

Regulatory judgements published on 25 July

ProviderGovernanceViabilityExplanation
Black Country Housing GroupG1V1No change
East End HomesG1V2No change
Equity Housing GroupG2V2Governance and viability downgrade
Great Places Housing GroupG1V1No change
Hundred Houses SocietyG2V2No change
Leeds and Yorkshire Housing AssociationG2V1Governance downgrade
NSAH (Alliance Homes)G2V1Governance downgrade
Paradigm Housing GroupG1V1No change
Shepherds Bush Housing AssociationG1V1Governance upgrade
West Kent Housing AssociationG1V1No change
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