Q2 Update and Move to Premium Segment of Market
11 January 2021
PRSR.L
The PRS REIT plc
("the Company" or "the PRS REIT")
Second Quarter Update
and
Move to the Premium Segment of the Main Market
The PRS REIT, the closed-ended real estate investment trust established to invest in high-quality, new build, family homes in the private rented sector ("PRS"), is pleased to provide an update on activity over the second quarter of its financial year ending 30 June 2021 and on the Board's consideration of a move from the Specialist Fund Segment to the Premium Segment of the Main Market ("Premium Segment").
Second Quarter Activity
|
|
At 31 Dec 2020 |
At 30 Sept 2020 |
At 31 Dec 2019 |
|
Number of completed homes |
3,163 |
2,634 |
1,617 |
|
Estimated rental value ("ERV") per annum |
£29.4m |
£24.3m |
£14.9m |
|
Number of contracted homes |
1,963 |
2,369 |
3,328 |
|
ERV per annum |
£19.4m |
£23.3m |
£32.7m |
|
Completed and contracted sites |
65 |
64 |
62 |
|
ERV of completed and contracted sites |
£48.8m |
£47.6m |
£47.6m |
|
Rent collected in period relative to rent invoiced for the same period |
100% |
100% |
100% |
The pace of home completions has stepped up markedly over the last six months, reflecting the significant number of sites now under construction and advancing to maturity. The number of homes added to the portfolio in the second quarter, which included the Christmas period, was 529. This took housing delivery to 1,081 homes over the first six months of the current financial year, including those homes acquired from BlackRock Real Assets in December. By comparison, 1,546 homes were added over the entirety of the last financial year.
The quarter also saw the Company reach full commitment of its funding resource of £900m (gross) in December with the acquisition of the fully-let development of 123 homes from BlackRock Real Assets.
In total, the Company's portfolio at 31 December 2020 stood at 3,163 completed homes (30 September 2020: 2,634) with an ERV of £29.4m per annum (30 September 2020: £24.3m).
The Company is well into the final stages of delivering its initial portfolio, which once fully optimised, is anticipated to be around 5,200 homes, with an ERV of approximately £50.0m per annum. Delivery of the 5,000th home is currently expected in late 2021/early 2022.
Both rent collection and rental demand in the quarter was strong. As with the quarters ended 30 September 2020 and 31 December 2019, the amount of rent collected during the quarter ended 31 December 2020 matched rent invoiced during the period. Total arrears at 31 December 2020 was £0.2m, representing less than 1% of annualised ERV on completed units. Arrears have remained broadly constant over the last six months despite the significant growth in rent roll.
The number of applicants seeking a place on reservation lists for completed homes remained high. At 31 December 2020, 3,045 homes out of the portfolio of 3,163 completed homes were occupied, and a further 55 qualified applicants were due to take occupancy.
The construction and lettings sectors remain open in England's third national lockdown, which commenced on 4 January 2021. The Company's partners are prioritising the health and welfare of all staff, customers and suppliers, and continue to ensure that social distancing and other precautionary measures are in place.
Dividend and Net Asset Value
The dividend for the second financial quarter ended 31 December 2020 will be announced in February. The Company continues to target a minimum total dividend of 4.0p per ordinary share for the current financial year ending 30 June 2021. The Company will also provide an update on its net asset value as at 31 December 2020 on the same date.
Move to the Premium Segment of the Main Market
The Company announced in its audited full year results for the year ended 30 June 2020 that the Board was considering the benefits of a transfer of the Company's listing from the Specialist Fund Segment to the Premium Segment of the Main Market ("Premium Segment"). The Board can now confirm its intention to apply to the FCA for the Company's issued share capital to be admitted to the Premium Segment in early 2021. The transfer is expected to broaden the Company's share register and facilitate its eligibility for inclusion in FTSE's EPRA and UK Index Series.
As part of the FCA's requirements for transferring the listing, the Company intends to incorporate some additional investment restrictions within its published investment policy, which will require the prior approval of shareholders at a general meeting. These restrictions will not impact on the Company's stated strategy. The Company will make further announcements in respect of the proposed changes to its investment policy and the transfer of its listing to the Premium Segment in due course.
DEFINITIONS
|
Contracted |
refers to sites under construction (under a design & build contract), which have been purchased by the PRS REIT or the PRS REIT's Investment Adviser (forward sold to the PRS REIT). |
For further information, please contact:
|
The PRS REIT plc
|
Tel: 020 3178 6378 (c/o KTZ Communications) |
|
Sigma PRS Management Limited
|
Tel: 0333 999 9926 |
|
N+1 Singer
|
Tel: 020 7496 3000
|
|
Panmure Gordon (UK) Limited Chloe Ponsonby(Corporate Broking), Alex Collins (Corporate Finance)
|
Tel: 020 7886 2500 |
|
G10 Capital Limited (part of the IQEQ Group as AIFM) Paul Turner
|
Tel: 020 3745 2826 |
|
KTZ Communications Katie Tzouliadis, Dan Mahoney |
Tel: 020 3178 6378 |
NOTES TO EDITORS
About The PRS REIT plc
(
www.theprsreit.com
)
The PRS REIT plc 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. The Company is investing £0.9bn in a portfolio of high quality homes for private rental across the regions, having 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 PRS, 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. The Company 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.
Sigma has created an unrivalled PRS platform, which sources sites and brings together construction resource to develop them, enabling Sigma to deliver an integrated solution to partners. As well as sourcing sites and managing all stages of the planning and development process, Sigma also manages the rental of completed homes through its award winning rental brand 'Simple Life'. The Company's subsidiary, Sigma PRS Management Limited, is Investment Adviser to The PRS REIT plc.
About Sigma PRS Management Limited
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).
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