Coronavirus Update and Dividend Declaration
18 June 2020
PRSR.L
The PRS REIT plc
("Company" or "PRS REIT")
Coronavirus Update and Dividend Declaration
The PRS REIT, the real estate investment trust that is investing in new-build family homes in the Private Rented Sector ("PRS"), provides an update on the third quarter dividend payment, future dividend payments, and the Company's current performance in the disrupted environment resulting from the coronavirus crisis.
The Board is pleased to report that the PRS REIT's portfolio of new family rental homes has performed resiliently during the past months. Rental income has not been materially affected, and the number of completed homes is growing again, with the 2,000th home completed on 16 June, following the resumption of construction activity. New tenants are beginning to move in and rental demand is high, with reservations at a strong level.
The Company's Investment Adviser is working hard with construction partners on revised delivery schedules and new methods of working, which is helping to regain momentum. The Board would like to thank all partners for their efforts and assistance over these difficult times.
Dividends
Following the deferral of the interim dividend for the third quarter, covering 1 January 2020 to 31 March 2020, there is sufficient clarity on the construction sector for the Board to declare an interim dividend for that quarter of 1.0 pence per ordinary share. This dividend, which is a non-Property Income Distribution ("non-PID") will be payable on 17 July 2020 to shareholders on the register on 26 June 2020. The ex-dividend date will be 25 June 2020.
In light of the significant uncertainty created by the global coronavirus pandemic, and specifically the disruption to planned construction schedules, the Board now considers it prudent to target a total dividend of 4.0 pence per ordinary share for the current financial year ending 30 June 2020. For the next financial year ending 30 June 2021, the Board will target a minimum total dividend of 4.0 pence per ordinary share1.
Coronavirus Update
Construction Activity
Construction activity, which was suspended with the national 'lockdown' in March, has now restarted. Contracted homes currently total c. 2,900 units. They are at varying stages of progress, from site commencement to final stages of delivery. A further £75m of funding is pending investment, having been strategically deferred in the light of the disrupted marketplace, as previously reported. Completed homes currently stand at 2,000.
Social distancing measures are being observed on sites, in line with Government guidelines to maintain a safe working environment. While productivity will be impacted, slowing the rate at which homes are completed, over 450 new homes are scheduled for delivery through June to the end of August 2020. This will take the Company's portfolio to over 2,400 completed homes at that point, providing an aggregate estimated rental value of £22.2m.
Rent Collection and Reservations
Rent collection has been resilient in the two months since the 'lockdown', with 97% collection rate in May. The Company is agreeing new payment plans for those households that have requested assistance.
Rental demand remains high, and reservations have been rising weekly since the beginning of May. The week commencing 1 June saw 88 new reservations across the portfolio, the highest week for reservations this calendar year. There are now over 500 reservations awaiting a moving-in date. These reservations are expected to deliver an additional annual rental income of c.£4.6m once homes are completed and reservees take occupancy. Rental rates remain unchanged compared to pre-crisis levels. Occupation dates are being targeted over the next three months and the pace of tenants taking residence is increasing steadily.
Outlook
As previously stated, the Company remains well-positioned financially and operationally to meet the challenges and opportunities ahead, and the Board is confident that the Company's long-term prospects are undiminished.
A further update covering the fourth quarter of the financial year will be provided in July.
1 This is a target only and there can be no assurance that the target can or will be met and should not be taken as an indication of the Company's expected or actual future results. Accordingly, potential investors should not place any reliance on this target in deciding whether or not to invest in the Company or assume that the Company will make any distributions at all and should decide for themselves whether or not the target dividend yield is reasonable or achievable.
For further information, please contact:
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The PRS REIT plc
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Tel: 020 3178 6378 (c/o KTZ Communications) |
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Sigma PRS Management Limited
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Tel: 0333 999 9926 |
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N+1 Singer
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Tel: 020 7496 3000
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G10 Capital Limited (part of the IQEQ Group as AIFM) Gerhard Grueter |
Tel: 020 3696 1302 |
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KTZ Communications Katie Tzouliadis, Dan Mahoney |
Tel: 020 3178 6378 |
NOTES TO EDITORS
About The PRS REIT plc
(www.theprsreit.com)
The PRS REIT is a closed-ended real estate investment trust established to invest in the Private Rented Sector and to provide shareholders with an attractive level of income together with the potential for capital and income growth. It has raised a total of £500m (gross) through its Initial Public Offering, on 31 May 2017, and a subsequent placing in February 2018. Both fundraisings were supported by the UK Government's Homes England with direct investments.
LEI: 21380037Q91HU97WZX58
About Sigma Capital Group plc
(
www.sigmacapital.co.uk
)
Sigma Capital Group plc ("Sigma") is a private rented sector, residential development, and urban regeneration specialist, with offices in Edinburgh, Manchester and London. Sigma's principal focus is on the delivery of large scale housing schemes for the private rented sector. It has a well-established track record in assisting with property-related regeneration projects in the public sector, acting as a bridge between the public and private sectors. Its subsidiary, Sigma PRS Management Limited, is Investment Adviser to The PRS REIT plc of its build-to-rent activities.
About Sigma PRS Management Ltd
Sigma PRS Management Limited is a wholly-owned subsidiary of AIM-quoted Sigma Capital Group plc and is Investment Adviser to The PRS REIT plc. It sources investments and operationally manages the assets of The PRS REIT plc and advises the Alternative Investment Fund Manager ("AIFM") and The PRS REIT plc on a day-to-day basis in accordance with The PRS REIT plc's Investment Policy. The Investment Manager is G10 Capital Limited. Sigma PRS Management Ltd is an appointed representative of G10 Capital Limited, which is authorised and regulated by the Financial Conduct Authority (FRN:648953)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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