Quarterly Update to 29 September 2017

September 29, 2017


The PRS REIT plc
(the “Company” or the “PRS REIT”)

Quarterly Update to 29 September 2017

The PRS REIT plc, the closed-ended real estate investment trust established to invest in new build homes in the Private Rented Sector (“PRS”), is pleased to provide its second quarterly update, for the period to 29 September 2017, following its admission to the London Stock Exchange’s Main Market on 31 May 2017.

KEY POINTS

• Significant progress since IPO on 31 May – with the total value of PRS assets acquired, forward- purchased or under construction now in excess of £134.6m.  This equates to 926 new rental homes with an Estimated Rental Value (“ERV”) of £8.4m p.a.

• The equity capital raised at admission, c. £250m, is expected to be fully committed in H1 2018

• First Acquisition Portfolio – the portfolio of completed PRS sites the Company agreed to acquire from Sigma Capital Group plc (“Sigma”) on a forward-purchased basis – is progressing well:

o Three newly built PRS sites were acquired, or are under contract for acquisition in September, from Sigma for a total consideration of £24.4m, taking the total number of acquired PRS sites to four;

o Together, the four sites comprise 223 new, high quality rental homes and will generate a gross rental income of £1.95m p.a.;

o The sites predominantly comprise a mix of 2, 3, & 4 bedroom family homes and are
located across the North West and South Yorkshire;

o A further four sites in the North West and Midlands are under construction by Sigma for the Company.  These will deliver 273 new rental homes, with the first homes scheduled for handover in October 2017.

• The Initial Development Portfolio – the PRS development sites to be acquired and developed – is gaining momentum:

o Five new  Design & Build (“D&B”) contracts were agreed or entered into in the period with Countryside Properties and Keepmoat Homes and Keepmoat Regeneration, bringing the total to six sites under construction or moving onto site;

o These six contracts will deliver 430 new 2, 3, & 4 bedroom rental homes;

o The sites are located in the North West and South Yorkshire.

• Investment adviser, Sigma PRS Management Limited, a subsidiary of Sigma, is in discussions to agree debt facilities

• Additional development and acquisition opportunities, over and above those previously identified, are currently under review

 

Steve Smith, Chairman, commented:

“The PRS REIT has made excellent progress over the four months since its IPO at the end of May, with the total value of assets acquired, forward-purchased or under construction now standing at in excess of £134.6m.  This equates to 926 high quality, new rental homes for the private rented sector, generating an estimated rental of £8.4m per annum. 

“Given this excellent progress and our continuing momentum, the PRS REIT is well underway to fully deploying all the funds raised at flotation, some £250m, in H1 2018.

“Our Investment Adviser, Sigma PRS Management Limited, is bringing forward interesting additional opportunities above those already identified at IPO, and we remain confident of our progress as we build out our investment in the Private Rented Sector across the major conurbations in England.”

For further information, please contact:

The PRS REIT plc                                                                                                      Tel: +44 (0)20 3178 6378
Steve Smith, Non-executive Chairman

Sigma PRS Management Limited
Graham Barnet                                                                                                               Tel: +44 (0)333 999 9926
Graeme Hogg

N+1 Singer 
James Maxwell, Liz Yong, Michael Taylor                                                               Tel: +44 (0)20 7496 3000

Stifel                                                                                                                                Tel: +44 (0)20 7710 7600
Mark Young, Neil Winward, Tunga Chigovanyika

KTZ Communications                                                                                             Tel: +44 (0)20 3178 6378
Katie Tzouliadis, Irene Bermont-Penn, Emma Pearson

 

OVERVIEW AND OUTLOOK

The PRS REIT has made significant progress since its IPO on 31 May 2017, with the total value of PRS assets acquired, forward-purchased or under construction already in excess of £134.6m. This amounts to 926 high quality, new rental homes which, when complete and fully let, will generated an Estimated Rental Value (“ERV”) of £8.4m per annum.

Over the first four months since its launch, as planned, the PRS REIT has agreed contracts to acquire 223 new rentals homes from Sigma Capital Group plc (“Sigma”), located over four sites in the North West and South Yorkshire for its First Acquisition Portfolio.  A further four sites are under contract for acquisition from Sigma.  The Company’s Initial Development Portfolio is also progressing very well, with now six Design & Build contracts agreed or signed.  These will deliver an additional 430 new rental homes in sites in the North West and South Yorkshire.

The Company expects that all the capital raised at IPO, approximately £250m, will be fully committed during H1 2018.  In addition, Sigma is currently in discussions with debt providers for additional capital, in accordance with the Prospectus.

The table below summarises the current composition and ERV of the Company’s First Acquisition Portfolio and Initial Development Portfolio.

Detail of each is included below the table.

First Acquisition Portfolio Purchase Price PRS units ERV
Four completed sites have been/are being acquired from Sigma £31.7m 223 £1.95m
Four further sites under contract to be acquired from Sigma on completion; £41.3m 273 £2.5m
£73.0m 496 £4.45m
The Initial Development Portfolio Purchase Price PRS units ERV
Six development sites underway/agreed by the PRS REIT £61.6m 430 £3.95m
Combined Total of Both Portfolios £134.6m   926     £8.4m

 

THE FIRST ACQUISITION PORTFOLIO 

Sites funded and delivered by Sigma – First Acquisition Portfolio

The following sites comprising 223 new homes and forming part of the First Acquisition Portfolio are being/ have been acquired into the REIT:

Site Units Accommodation Type Purchase/D&B Contracts Agreed Gross Annual Rental Purchase Price
Woodbine Road / Mackets, Halewood 50 2 & 3 bedroom houses Jun- 17 £452,000 £7.34m
 
Coral Mill, Rochdale 45 2, 3 & 4 bedroom houses Sep-17 £595,200 £9.77m
24 2-bedroom apartments
Durban Mill, Oldham 80 2, 3 & 4 bedroom houses Sep-17 £695,700 £11.46m
 
Park Grange House (Norfolk Park), Sheffield

 

24 2 bedroom apartments Sep-17 £206,600 £3.17m
Total: 223     £1.95m £31.74m

 

The sites below will provide a further 273 new homes and will be acquired by the REIT on or around the completion dates noted below:

Site Units Accommodation Type Purchase/D&B Contracts Agreed Estimated Completion Dates Estimated Purchase Price
Galton Lock (Mafeking Road), Smethwick 63 2, 3 & 4 bedroom houses Dec-16 Q2-18 £9.73m
Hamilton Square (Howe Bridge Mill), Atherton 59 2, 3 & 4 bedroom houses Dec-16 Q1-18 £8.72m
Silkin Park, Telford 78 2, 3 & 4 bedroom houses Mar-17 Q4-18 £11.84m
Our Lady’s, Salford 73 2, 3 & 4 bedroom homes Jun-17 Q2-18 £10.99m
Total 273       £41.28m

THE INITIAL DEVELOPMENT PORTFOLIO

Sites funded and developed by the REIT – managed by Sigma PRS Management Limited

The sites below form part of the Initial Development Portfolio of the REIT.
The Baytree Lane Design & Build contract was entered into at the REIT’s admission to the Main Market, with Sigma negotiating and agreeing a further five D&B contracts on behalf of the REIT during the period.  These contracts together will deliver 430 PRS units.

Site Units Accommodation Type Purchase/D&B Contracts Agreed Estimated Completion Dates Approximate Delivery Cost
Baytree Lane, Middleton 110 2, 3 & 4 bedroom homes Jun-17 Q3-18 £16.40m
Tintern Avenue, Middleton 88 2, 3 & 4 bedroom houses Jul-17 Q4-18 £12.04m
East Hill, Sheffield 58 3 & 4 bedroom houses Sep-17 Q1-19 £8.85m
Manor Top Phase One, Sheffield 78 3 & 4 bedroom houses Sep-17 Q1-19 £10.80m
Woodford Lodge Phase 1, Winsford 14 2, 3 & 4 bedroom houses Aug-17 Q2-18 £7.80m
Woodford Lodge Phase 2, Winsford 40 2, 3 & 4 bedroom houses Sep-17 Q4-18
Tower Hill Phase 2, Kirkby 42 3 & 4 bedroom houses

 

Sep-17 Q4-18 £5.70m
Total 430       £61.59m

 

ENDS

 

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.  The Company raised £250 million gross equity capital in an initial public offering via a Placing Offer for Subscription and Intermediaries Offer. The UK Government’s Homes and Communities Agency supported the launch of the PRS REIT with a direct investment of c. £25 million. The proceeds of the fundraising will be invested in completed PRS sites and PRS development sites to achieve the Company’s objective of providing shareholders with an attractive level of income together with the potential for capital and income growth.

About Sigma PRS Management Limited

Sigma PRS Management Limited is a wholly owned subsidiary of AIM quoted Sigma Capital Group plc and is the Company’s Investment Adviser. It will source investments and manage the assets of The PRS REIT plc and advise the Company on a day-to-day basis in accordance with the Company’s Investment Policy.

About Sigma Capital Group plc (“Sigma”)
www.sigmacapital.co.uk

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, has been appointed as Investment Adviser to The PRS REIT plc.



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