The UK Government has reduced the grants that they offer to Housing Associations and Local Authorities as an incentive to build more houses. However, as the pressure in mounting to build more in order to meet the housing demand, both Local Authorities and Housing Associations are looking for private investment in order to secure enough funding to carry out the work that they have planned.
Residential Secure Income plc is a recently formed company that has announced they will be launching an initial public offering. This will then hopefully allow the close-ended investment company the opportunity to raise up to £300 million. Residential Secure Income is incorporated in both England and Wales and plans to offer a subscription of ordinary shares which will form a capital investment of the company.
Initially the investment company must gain permission to admit their ordinary shares on to the premium listing of the Official List of the Financial Conduct Authority. After permission for this has been granted the shares will be available for trade on the Main Market as securities on the London Stock Exchange.
Residential Secure Income plc plan to make themselves a real estate investment trust. This will be done by investing proceeds gained by the issue of their ordinary shares into the residential assets classes. These classes include UK social housing Stock. Therefore the company will be looking to be one of the private investment options available for Housing Associations and Local Authorities.
Homes that are then acquired by the investment company will be freehold or leasehold which means that the company will benefit in the long term with inflation adjusted cash flows and Residential Secure Income looking to outsource any day-to-day management. The business is a wholly owned subsidiary of TradeRisks, who will act as AIFM. TradeRisks has experience offering corporate finance advice for the UK social housing sector and a range of other social housing infrastructure. It has been recorded that up to date the Fund Manager for this business plan has arranged the funding of more that £10 billion for social housing, care and other specialist residential opportunities.
