PRS REIT reports progress during third quarter

Manchester-based PRS REIT, the closed-ended private rental sector real estate investment trust established to invest in new-build homes, reports further progress over the past three months to March 31.

During the period its concluded a second equity fundraising in February, secured a further £250m.

It also announced credit approved terms secured for £200m of debt from secure Scottish Widows and Lloyds Banking Group.

In terms of development activity, construction was commenced on nine new sites, with a combined gross development cost (GDC)
of around £97m, which will add a further 676 new rental homes, with an estimated rental value (“ERV”) of approximately £6m.

An additional four development sites were secured in for a total of around £59m, which will deliver approximately 386 new homes with an ERV of roughly £3.7m, once fully let.

Total development activity underway at the end of the third quarter amounted to 1,383 new homes.

Annualised rental income at the end of the quarter increased to about £2.4m, compared with £2.1m by the end of December 2017, from 276 properties.

Galliford Try Partnerships was added as a construction partner by investment adviser Sigma PRS Management, and the first site acquisition was concluded.

More than £600m GDC of sites have been identified at the end of the third quarter through Sigma PRS – an increase of £60m since the last period

Details regarding the payment of the company’s second dividend for the three months to March 31, will be published at the end of April.

PRS REIT chairman Steve Smith said: “We are pleased to report that the PRS REIT continues to show strong momentum.

“During quarter three we significantly increased the company’s capital resources, raising a further £250m through a second equity placing and securing credit approved terms for £200m of debt facilities.

“These new funds will assist us in the continuing expansion of our portfolio of newly-built rental homes.

“Through our investment adviser, Sigma PRS, and its unique PRS delivery platform, we commenced construction on a further 676 new rental homes in the period.

“We estimate that our annualised rental income stream is approximately £2.4m at the end of quarter three, up from £2.1m at the end of quarter two.”

He added: “We look forward to reporting on continuing progress.”

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