UK Edition
Social housing trust targets £300m listing
An investment trust focused on social housing is expected to launch plans for a £300m stock listing on Monday despite the market’s volatility since the chaotic snap election.
Residential Secure Income is planning to raise up to £300m from investors to acquire new social housing properties by appealing to them with the promise of inflation-linked returns.
The listing follows the recent £250m flotation of real estate investment trust (REIT) Sigma and peer Citivas’s £350m stock market raise last November.
However, Residential Secure Income is focused exclusively on the social housing market rather than the wider private rental market and has already identified a pipeline of suitable portfolio homes worth £263m.
Out of 23.5m homes in the UK, around 4.1m are social housing units, according to the Department for Communities and Local Governments. Housing associations own around 2.45m while local authorities own the remainder.
Investment into the housing sector has rocketed over the past five years due to the shortage of good quality and affordable housing, which has been exacerbated by a lack of mortgage availability and the UK’s booming population. In addition, a significant reduction in Government funding for housing associations has prompted private housebuilders to seek alternative financing routes to support their development plans.
Residential Secure Income has been set up as a subsidiary of TradeRisks, which is long-standing adviser to housing associations and local authorities and has already arranged funding for the sector worth £10bn over the past 16 years.
Residential Secure Income is planning to list shares at 100p each and generate returns of over 8pc in order to generate a dividend yield of 5pc.
Jefferies is acting as sole adviser and bookrunner on the listing which is expected to take place around 12 July.