Fourth Quarter Update
14 July 2020
The PRS REIT plc
("Company" or "PRS REIT")
Fourth Quarter Update
The PRS REIT, the real estate investment trust that invests in new-build family homes in the Private Rented Sector ("PRS"), is pleased to provide an update for the fourth quarter of its financial year, comprising the three months to 30 June 2020.
At 30 Jun
At 31 Mar
At 30 Jun
Total number of completed homes
Rental income per annum
Total number of contracted homes
Estimated rental value ("ERV") per annum
Completed and contracted homes
ERV per annum
Rent collected as a percentage of rent due
During the fourth quarter, which includes an eight week period when construction activity was suspended or disrupted because of COVID-19 related restrictions, only 135 additional rental homes were completed. This compares to 330 completed homes in the prior quarter. Nonetheless, in mid-June, after construction activity resumed, the Company reached the milestone of completing the 2,000th new-build home for its portfolio. By the end of June, the Company's total portfolio of completed homes stood at 2,082 homes (30 June 2019: 1,173), with an estimated rental value ("ERV") of £19.1m per annum (30 June 2019: £10.7m).
In addition, a total of 2,750 homes were under way at the end of the fourth quarter. When completed and let, they are expected to generate an annualised gross rent of around £27.1m, which takes the ERV of the PRS REIT's portfolio of assets to £46.2m per annum. The pace of construction, as previously highlighted, is now necessarily slower than before the COVID-19 outbreak, owing to the social distancing requirements necessary to maintain a safe working environment. However the Board is pleased with progress so far, and approximately 450 new homes are expected to be completed during the first quarter of the new financial year.
Rent collection was not materially impacted by the national lockdown, and 98% of rent due in the fourth quarter has been collected (Q3: 99%). The Company has agreed payment plans for those households that have required assistance, and current lockdown-related rent arrears constitute just 0.49% of annual passing rent.
Rental demand remained strong, with prices steady at pre-COVID-19 levels, and reservations at 30 June 2020 stood at 429. The pace at which tenants are taking residence is beginning to increase with the continued easing of restrictions.
As announced on 18 June 2020, an interim dividend payment of 1.0 pence per ordinary share in respect of the third quarter of the financial year will be payable on 17 July 2020 to shareholders on the register at 26 June 2020. Details of the fourth quarter interim dividend will be declared at the end of July. The Board continues to target1 a total dividend of 4p per share for the financial year and a minimum of 4p per share for the new financial year ending 30 June 2021.
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:
The PRS REIT plc
Tel: 020 3178 6378 (c/o KTZ Communications)
Sigma PRS Management Limited
Tel: 0333 999 9926
Tel: 020 7496 3000
G10 Capital Limited (part of the IQEQ Group as AIFM)
Tel: 020 3745 2826
Katie Tzouliadis, Dan Mahoney
Tel: 020 3178 6378
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 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.
About Sigma Capital Group plc
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.
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)
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