Social Housing buys Residential Secure portfolio for £108 million
Social Housing REIT PLC on Wednesday announced its acquisition of a senior living portfolio from Resi Portfolio Holdings Ltd, a subsidiary of Residential Secure Income PLC.
Retirement living and shared ownership investor Residential Secure, in its own announcement, said Resi Portfolio agreed to sell the entire share capital of RHP Holdings Ltd, the entity which holds Residential Secure’s retirement portfolio.
The portfolio consists of 1,907 senior living rental flats and 256 housing manager flats, it said.
London-based real estate investor Social Housing is acquiring the assets for a headline purchase price of approximately £108.3 million.
It said the consideration on completion, expected in mid-July, comprises £45 million in cash, and approximately £62.3 million through the issue of 66.1 million new shares at 94.23 pence each, Social Housing’s EPRA net tangible asset value as of December 31. Another £1 million in deferred consideration will be paid upon the finalisation of the completion accounts.
The deal also includes existing long?dated, portable and partially amortising debt provided by Scottish Widows, maturing in 2043 and ‘with a highly attractive all?in cost of 3.46%’.
Social Housing said it expects the acquisition to be high-single digit earnings accretive in the first full financial year following completion, and expects the addition of long?duration, inflation?aligned income streams to enhance earnings and support dividend sustainability.
The firm said that on a pro-forma basis, the purchase increases its gross asset value to £831.4 million and its EPRA NTA to £471.4 million.
‘Today’s announcement represents a significant strategic step forward for the company...The acquisition of this high-quality senior living portfolio materially increases our scale, broadens exposure across structurally supported living sectors, and enhances the resilience and diversification of income,’ commented Social Housing Chair Jos Short.
Residential Secure, meanwhile, said the consideration shares offer its shareholders the potential for further value realisation in owning shares in a larger, more liquid London-listed investment company; for further value upside through Social Housing’s share price performance and portfolio earnings; and for additional upside in the form of future dividends payable by Social Housing.
‘We are pleased to have agreed to sell ReSI’s retirement portfolio to Social Housing REIT and deliver a substantial step in the board’s commitment to realise ReSI’s assets in an orderly manner,’ commented Residential Secure Chair Robert Whiteman.
Social Housing shares were 3.5% higher at 74.83 pence in London on Wednesday. Residential Secure shares were up 3.1% at 53.40p each.
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