Net Asset Value & Corporate Update

29 April 2020

Residential Secure Income plc

Net Asset Value & Corporate Update

Residential Secure Income plc ("ReSI" or the "Company") (LSE: RESI), which invests in affordable Shared Ownership, retirement and Local Authority housing, is pleased to announce its unaudited net asset value ("Net Asset Value" or "NAV") as at 31 March 2020 and to provide an update on its corporate activity for the second quarter commencing 1 January 2020.

As noted in its COVID-19 statement on 30 March 2020, the Company believes that its defensive portfolio is well positioned in the current crisis, with rental income primarily supported by residents' pensions or housing welfare subsidy systems, including leases to local authorities. While the anticipated growth in unemployment and the economic slowdown arising from COVID-19 are unlikely to materially impact performance, the Company expects some increase in void levels within the retirement portfolio and a delay in further expanding its shared ownership portfolio. First tranche sales within ReSI's shared ownership portfolio progressed well throughout the second quarter with reservations and completions continuing to be transacted in April.

Financial highlights:

· IFRS NAV per share of 106.9 pence1 (31 December 2019: 107.7 pence), resulting in a total return for the quarter of 0.5 pence and taking the NAV total return to 0.8 pence for the half year to date

· Total property portfolio value of £276.9 million (31 December 2019: £260.3 million), with a marginal 0.1% decrease (£0.3 million) in like-for-like valuation due primarily to a 1.2% or £2.7 million reduction in the net present value of cashflows in the independent retirement rental portfolio caused by the onset of COVID-19, offset by a 10% or £2.7 million valuation gain in the shared ownership portfolio as it progresses towards full income generation

· In light of current market uncertainty created by COVID-19, the valuations have been reported on the basis of 'material valuation uncertainty' in line with recent RICS guidance

Dividend:

· The Company announces that it intends to pay its quarterly dividend of 1.25 pence per Ordinary Share for the period from 1 January to 31 March 2020 in full, and reaffirms its target dividend of 5.0 pence per Ordinary Share for the current financial year2

Update on portfolio and corporate activity since 31 December 2019:

· Total portfolio rent continues to be secure, with 98% of April rent collected by 27 April 2020, in line with normal performance, with further rent to be received from Local Authorities who pay at the end of the month

· As of 29 April 2020, ReSI had 93 completed shared ownership homes with 55 occupied, 26 reserved and moving to completion and 12 currently available

· Three shared ownership completions and four reservations have been transacted since 30 March 2020. This follows an initial slowing of activity as the country began to prepare for and subsequently entered lockdown, and indicates a gradual reversal of this trend with virtual viewings also increasing and shared ownership mortgages now available with LTVs of up to 95%

· The net rent on completed shared ownership homes is currently £498,000, with a further £274,000 on those reserved and moving to completion, or 0.5p per share in total

· Following the acquisition of ReSI Capital Management by Gresham House plc during the quarter, ReSI is looking to leverage the buying power of Gresham House to reduce certain fund operating expenses and hence reduce the Company's total expense ratio

· ReSI Housing was awarded Investment Partner status by Homes England in March 2020, extending ReSI's access to government grant funding to include schemes outside London and bring forward much needed additional Affordable Housing at national level

· On 27 April 2020, Elaine Bailey joined the board of ReSI as an independent Non-Executive Director with Mike Emmerich stepping down as a Non-Executive Director on the same date.

1 Reflecting an independent valuation of the property portfolio prepared on an IFRS basis.

2 This is a target only and not a profit forecast. There can be no assurance that this target will be met.

The movement in NAV since 31 December 2019 is as follows:

FOR FURTHER INFORMATION, PLEASE CONTACT:

NOTES:

About Residential Secure Income plc

Residential Secure Income plc (LSE: RESI) is a real estate investment trust (REIT) listed on the premium segment of the Main Market of the London Stock Exchange with the objective of delivering secure inflation linked returns by investing in affordable shared ownership, retirement and Local Authority housing throughout the UK. ReSI targets a secure, long-dated, inflation-linked dividend of 5.0 pence per share p.a. (paid quarterly) and a total return in excess of 8.0% p.a. and has to date committed c. £300 million, assembling a portfolio of 2,680 properties.

ReSI aims to make a meaningful contribution to alleviating the UK housing shortage by meeting demand from housing developers (Housing Associations, Local Authorities and private developers) for long-term investment partners to accelerate the development of socially and economically beneficial new affordable housing. ReSI's subsidiary, ReSI Housing Limited, is registered as a for-profit Registered Provider of Social Housing, and so provides a unique proposition to its housing developer partners, being a long term private sector landlord within the social housing regulatory environment. As a Registered Provider, ReSI Housing can acquire affordable housing subject to s106 planning restrictions and housing funded by government grant.

Acquisitions by ReSI are limited to homes with sufficient cashflows, counterparty credit quality and property security to be capable of supporting long‑term investment grade equivalent debt. ReSI does not manage or operate stock and uses experienced and credit-worthy third-party managers. 

ReSI is managed by ReSI Capital Management Limited, a wholly owned subsidiary of TradeRisks Limited which has a 19-year track record of executing transactions within the UK social housing sector and, to date, has arranged funding of over £11 billion in the social housing, care and other specialist residential property sectors.

TradeRisks Limited and ReSI Capital Management Limited were acquired on 4 March 2020 by Gresham House plc, the specialist alternative asset management business which is listed on the London Stock Exchange and now has c.£3 billion of assets under management. Gresham House plc provides funds, direct investments and tailored investment solutions, including co-investment across a range of highly differentiated alternative investment strategies. The Group's expertise includes timber, renewable energy, housing and infrastructure, strategic public and private equity (private assets). It aims to deliver sustainable financial returns and is committed to building long-term partnerships with clients (institutions, family offices, high-net-worth individuals, charities and endowments and private individuals) to help them achieve their financial goals. Shareholder value creation will be driven by long-term growth in earnings as a result of increasing AUM and returns from invested capital.

Further information on ReSI is available at www.resi-reit.com 

Further information on Gresham House is available at www.greshamhouse.com