Residential Secure Income plc has announced that they will be launching their initial public offering. The company is newly established and is a closed-ended investment company that has been incorporated in England and Wales. Through launching their initial public offering Residential Secure Income are hoping to raise as much as £300 million. This money is expected to be raised by placing and offering a subscription of ordinary shares in the capital of the investment company.
Residential Secure Income will begin this process by applying for the admission of its ordinary shares on the premium listing section of the Official List of the Financial Conduct Authority. After this has been done and the application has been passed, the shares will then be admitted for trading on the Main Market. It is on the Main Market that they will be listed for securities of the London Stock Exchange.
It is the intention of the Residential Secure Income plc to become a real estate investment trust. As a part of this any of the proceeds that have been made by the issuing of ordinary shares will then be invested into residential asset classes that are made from the UK social housing providers stock. It is thought that most of the social housing providers that will be invested in in this way will consist of Local Authorities and Housing Associations. It is thought that reinvesting in this manner will lead to long-dated and inflation-linked income returns that then create the opportunity for capital growth while also reducing the sensitive nature of the residential housing market.
It is thought that the increase demand for housing as well as a reduction of the new UK Government grant is making it more appealing for Housing Associations around the UK to look for other funding opportunities when carrying out their development plans. Local Authorities across the UK are also trying to increase the number of houses that they have available and are looking to private funding in order to make up the reduction in grants offered by the Government. It is thought therefore, that Residential Secure Income is making the most of an attractive market.