Shares of Residential Secure Income PLC (LSE:RESI) spiked as much as 13% this morning after the real estate fund announced a managed wind down.
ReSI’s chief executive Rob Whiteman warned that there “are no quick fixes” to the “headwinds for smaller listed real estate businesses”, namely the material market downturn since mid-2022.
As with the wider funds market, ReSI shares have traded at a considerable discount to their net asset value (NAV), suggesting ongoing trepidation in the market.
ReSI reported a 76.27p per share NAV on 1 August, representing a 33% discount to NAV at the time.
“With a market capitalisation of approximately £101 million the Company remains of a size which might deter some potential investors due to lower share liquidity and the increasing demand from investors for larger listed funds,” management stated.
Under the proposed wind down, ReSI will sell off parts of its portfolio comprising over 3,000 homes spread across the independent retirement rental, shared-ownership homes and local authority accommodation segments.
Proceeds are intended to be redistributed to shareholders.
ReSI said it will be asking shareholders to approve these proposals at a general meeting “in due course”.