PRS REIT PLC (The) Quarterly Update to 29 September 2017 (1635S)

TIDMPRSR TIDMSGM

RNS Number : 1635S

PRS REIT PLC (The)

29 September 2017

29 September 2017

PRSR.L

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 GBP134.6m. This equates to 926 new rental homes with an Estimated Rental Value ("ERV") of GBP8.4m p.a.

-- The equity capital raised at admission, c. GBP250m, 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 GBP24.4m, 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 GBP1.95m 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 GBP134.6m. This equates to 926 high quality, new rental homes for the private rented sector, generating an estimated rental of GBP8.4m 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 GBP250m, 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 Graeme Hogg               Tel: +44 (0)333 
                                          999 9926 
 
 N+1 Singer 
 James Maxwell, Liz Yong, Michael        Tel: +44 (0)20 
  Taylor                                  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 GBP134.6m. This amounts to 926 high quality, new rental homes which, when complete and fully let, will generated an Estimated Rental Value ("ERV") of GBP8.4m 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 GBP250m, 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   PRS units        ERV 
                                     Price 
------------------------------  ----------  ----------  --------- 
 Four completed sites             GBP31.7m         223   GBP1.95m 
  have been/are being acquired 
  from Sigma 
 Four further sites under         GBP41.3m         273    GBP2.5m 
  contract to be acquired 
  from Sigma on completion; 
                                ----------  ----------  --------- 
                                  GBP73.0m         496   GBP4.45m 
                                ----------  ----------  --------- 
 
 The Initial Development          Purchase   PRS units        ERV 
  Portfolio                          Price 
------------------------------  ----------  ----------  --------- 
 Six development sites            GBP61.6m         430   GBP3.95m 
  underway/agreed by the 
  PRS REIT 
------------------------------  ----------  ----------  --------- 
 Combined Total of Both          GBP134.6m         926    GBP8.4m 
  Portfolios 
------------------------------  ----------  ----------  --------- 
 

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   Purchase/D&B        Gross    Purchase 
                                      Type      Contracts       Annual       Price 
                                                   Agreed       Rental 
------------------  ------  --------------  -------------  -----------  ---------- 
 Woodbine               50   2 & 3 bedroom        Jun- 17   GBP452,000    GBP7.34m 
  Road / Mackets,                   houses 
  Halewood 
 
 Coral Mill,            45        2, 3 & 4         Sep-17   GBP595,200    GBP9.77m 
  Rochdale                         bedroom 
                                    houses 
                        24       2-bedroom 
                                apartments 
 
 Durban Mill,           80        2, 3 & 4         Sep-17   GBP695,700   GBP11.46m 
  Oldham                           bedroom 
                                    houses 
 
 Park Grange            24       2 bedroom         Sep-17   GBP206,600    GBP3.17m 
  House (Norfolk                apartments 
  Park), Sheffield 
------------------  ------  --------------  -------------  -----------  ---------- 
 Total:                223                                    GBP1.95m   GBP31.74m 
------------------  ------  --------------  -------------  -----------  ---------- 
 

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   Purchase/D&B     Estimated   Estimated 
                                      Type      Contracts    Completion    Purchase 
                                                   Agreed         Dates       Price 
------------------  ------  --------------  -------------  ------------  ---------- 
 Galton Lock            63        2, 3 & 4         Dec-16         Q2-18    GBP9.73m 
  (Mafeking                        bedroom 
  Road), Smethwick                  houses 
 
 Hamilton               59        2, 3 & 4         Dec-16         Q1-18    GBP8.72m 
  Square (Howe                     bedroom 
  Bridge Mill),                     houses 
  Atherton 
 
 Silkin Park,           78        2, 3 & 4         Mar-17         Q4-18   GBP11.84m 
  Telford                          bedroom 
                                    houses 
 
 Our Lady's,            73        2, 3 & 4         Jun-17         Q2-18   GBP10.99m 
  Salford                          bedroom 
                                     homes 
------------------  ------  --------------  -------------  ------------  ---------- 
 Total                 273                                                GBP41.28m 
------------------  ------  --------------  -------------  ------------  ---------- 
 

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   Purchase/D&B     Estimated   Approximate 
                                     Type      Contracts    Completion      Delivery 
                                                  Agreed         Dates          Cost 
-----------------  ------  --------------  -------------  ------------  ------------ 
 Baytree              110          2, 3 &         Jun-17         Q3-18     GBP16.40m 
  Lane, Middleton               4 bedroom 
                                    homes 
 
 Tintern               88          2, 3 &         Jul-17         Q4-18     GBP12.04m 
  Avenue,                       4 bedroom 
  Middleton                        houses 
 
 East Hill,            58   3 & 4 bedroom         Sep-17         Q1-19      GBP8.85m 
  Sheffield                        houses 
 
 Manor Top             78   3 & 4 bedroom         Sep-17         Q1-19     GBP10.80m 
  Phase One,                       houses 
  Sheffield 
 
 Woodford              14          2, 3 &         Aug-17         Q2-18      GBP7.80m 
  Lodge Phase                   4 bedroom 
  1, Winsford                      houses 
 Woodford              40          2, 3 &         Sep-17         Q4-18 
  Lodge Phase                   4 bedroom 
  2, Winsford                      houses 
 
 Tower Hill            42   3 & 4 bedroom         Sep-17         Q4-18      GBP5.70m 
  Phase 2,                         houses 
  Kirkby 
-----------------  ------  --------------  -------------  ------------  ------------ 
 Total                430                                                  GBP61.59m 
-----------------  ------  --------------  -------------  ------------  ------------ 
 

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 GBP250 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. GBP25 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.

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCQVLFLDKFXBBV

(END) Dow Jones Newswires

September 29, 2017 02:02 ET (06:02 GMT)