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.
• 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
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|
|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|
|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|
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|
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
NOTES TO EDITORS
About The PRS REIT plc
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”)
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.