Another one bites the dust. Residential Secure Income (RESI) has become the latest real estate investment trust (Reit) to throw in the towel and announce a wind-down following the conclusion of a strategic review.
The reasons given were all too familiar. The Reit, which owns a portfolio of 3,125 homes across local authority accommodation, retirement rental homes and shared ownership properties, cited its market capitalisation of £101mn as a motivation, alongside a “persistent, material discount” to net asset value (NAV). For the Reit market in recent times, the choice has seemed binary: either gain liquidity through growth, or pack up. RESI is in the final stages of selling its local authority assets and will use that cash to pay off debt. The other housing will be sold off over time, and cash returned to shareholders.
RESI follows in the footsteps of Abrdn Property Income Trust (API), which became the latest trust to wind down after shareholders refused to back a merger with Custodian Property Income Reit (CREI). However, for some, API’s wind-down demonstrates the pitfalls of putting up a for sale sign and calling it a day.