Residential Secure Income proposes managed wind-down

The London-listed company, with a market capitalisation of £101m, said it had faced challenges due to low share liquidity and a persistent discount to its net asset value (NAV) since September 2022.

Its board, in consultation with shareholders and advisers, said it had concluded that the strategy would provide the best route forward.

The plan would involve actively managing the portfolio to maximise proceeds from asset sales, while ensuring that the interests of residents were safeguarded.

Proceeds would be returned to shareholders as part of the realisation process.

ReSI said its portfolio as of 30 June included 3,125 homes across independent retirement rental, shared ownership, and local authority accommodation.

The sale of its sole remaining local authority asset was expected to complete by the end of 2024, which would enable the full repayment of its floating rate debt.

ReSI said its ability to grow its portfolio and attract new investors had been limited by wider macroeconomic pressures and difficulties affecting the real estate investment trust sector.

However, the company noted that trading in the investment property market was beginning to improve, particularly for high-quality portfolios with inflation-linked revenue streams like ReSI’s.

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

“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.”

Whiteman said the board would ask shareholders to approve such a plan 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.”

At 1131 BST, shares in Residential Secure Income were up 6.21% at 57.78p.

Reporting by Josh White for Sharecast.com.