RSI invests in residential and social-housing sectors with a focus on independent retirement rentals and shared ownership. According to the REIT, these are “inflation-linked income streams” with “strong supply and demand imbalances and supportive property fundamentals”. Its portfolio is also meant to be able to “weather economic stress”, says chairman Rob Whiteman in the REIT’s annual report for FY2022 ended Sept 30, 2022. As at Sept 30, 2022, 97% of the REIT’s income is inflation-linked, generated from rents and supported by strong market drivers.
Things may not be looking very bright for the housing market in the UK. The country’s home prices have fallen at its sharpest annual pace since 2009 after interest rates were raised in March. Homes in the UK were also taking nearly twice as long to sell this year, according to an April 5 Bloomberg article. To add to the stress, the UK will be seeing a shortage in council housing as local authorities cut back on their building targets in April.
Amid these headwinds, we still like Residential Secure Income (RSI) for several reasons including its defensive portfolio, scale and valuation.
