| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 48.18 | -13 |
| Intrinsic value (DCF) | 23.50 | -58 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 0.04 | -100 |
Residential Secure Income plc (ReSI) is a UK-based real estate investment trust (REIT) specializing in affordable residential assets, particularly Shared Ownership properties. Listed on the London Stock Exchange since 2017, ReSI focuses on delivering stable income returns by investing in underserved segments of the UK housing market, including social and retirement housing. The company’s portfolio targets long-term, inflation-linked income streams, benefiting from structural demand for affordable housing in the UK. With a market cap of approximately £102 million, ReSI operates in a niche segment of the residential REIT sector, offering investors exposure to socially impactful real estate while addressing critical housing shortages. Its strategy aligns with government-backed affordable housing initiatives, providing resilience against economic downturns. ReSI’s commitment to sustainable housing solutions positions it as a key player in the UK’s evolving residential property landscape.
ReSI presents a specialized investment opportunity in the affordable housing sector, leveraging the UK’s chronic housing shortage and government support for Shared Ownership models. The company’s focus on secure, inflation-linked income is appealing, but recent financials show challenges, with negative revenue (£-8.23M) and net income (£-10.05M) for the period. However, positive operating cash flow (£17.9M) and a dividend yield (4.12p/share) suggest income potential. The low beta (0.28) indicates lower volatility relative to the market, appealing to risk-averse investors. Risks include reliance on UK housing policy and limited diversification. Investors should weigh the social impact appeal against financial performance and sector-specific risks.
ReSI’s competitive advantage lies in its niche focus on Shared Ownership and affordable housing, a segment with high barriers to entry due to regulatory complexity and partnerships with housing associations. Unlike conventional residential REITs, ReSI’s assets are less cyclical, benefiting from government subsidies and long-term demand. However, its small scale (£102M market cap) limits economies of scale compared to larger peers. The absence of debt (reported £0 total debt) provides financial flexibility but may indicate under-leverage in a capital-intensive industry. ReSI’s differentiation stems from its social impact mandate, which attracts ESG-focused investors, though this may limit growth opportunities outside policy-dependent segments. Competitors with broader portfolios (e.g., private rental or luxury housing) may outperform in bullish markets, but ReSI’s focus on affordability offers defensive qualities. The lack of capital expenditures (£0 reported) suggests a static portfolio, potentially hindering growth unless acquisitions are funded via equity.