Prs Reit Share Discussion Threads

[c3479z] 05/9/2024 16:29

according to a piece in city am today, the Director, Stephen Smith should realise the game's up and 'fall on his sword'.

[smithers1] 03/9/2024 16:14

hxxps://portfolio-adviser.com/cg-asset-management-criticises-prs-reit-board-over-investment-adviser-terms/

“CG Asset Management has issued an open letter to shareholders of PRS Reit, criticising the trust’s response to the requisition notice served last week.
CGAM is part of the 17.3% of shareholders that have called for an EGM to vote on removing the board chair and NED.

The firm have criticised the updated terms of PRS REIT’s Investment Advisory & Development Management Agreement with investment advisor Sigma PRS Management, announced in July.

Under the agreement, Sigma’s contract as investment adviser was extended to 2029, with the initial contract set to expire at the end of 2026.

CGAM claims that, despite regularly being in contact with the company and the board, they were not consulted about the new arrangements.

“We could see no justification for awarding such a long contract and were forced to conclude that the relationship between the board and the manager was too close and there was insufficient challenge from the board to the manager,” CGAM said in an open letter.

The firm also raised concerns over a potential conflict of interest after PRS Reit appointed Rothschild & Co as a third corporate adviser.

“The company already has two advisers, appointing a third adds further cost to shareholders for unclear benefit. We understand that Rothschild & Co advised the manager, Sigma PRS Management, on its sale to PineBridge Investments.
“Their appointment presents a potential conflict of interest which could be avoided by making use of the company’s existing advisers.”R21;

Too many conflicts here and Manager been milking it for too long.

Did some digging on Companies House. The PRS REIT formed an "independent" sub-committee of 3 non-execs not currently in the firing line to respond to the Requisition Notice. According to Companies House one of the three lives on the same street in Edinburgh as Sigma Capital’s Chief Executive Graham Barnet – read into that what you will.

It will be very interesting to see how this one plays out

[makinbuks] 02/9/2024 08:54

Interesting RNS. To summarise, a)its more complicated than the activists think, b)we are already considering the measures they propose and are just as capable as them to carry them out c) nothing about the management arrangements or fees. They are clearly rattled and realise they are up against some big guns. Mills doesn't take prisoners. I recall the battle for Rockwood.

One thought did occur, we still have three independent directors excluding the two who are under threat. Big board big fees

i do think the Harwood stable could make a difference here

[asagi] 30/8/2024 14:50

the second part of the dividend arrived today, the PID part. It's actually better to see it in two parts for the purpose of our own record keeping. In summary: no complaints about my broker here, but both parts arriving at the same time would have headed off any confusion.

[asagi] 30/8/2024 09:25

did any else have a problem with their dividend this morning? My payment includes only the ordinary distribution, the PID element is not there.

Asagi (long PRSR)

[makinbuks] 29/8/2024 15:25

hxxps://citywire.com/investment-trust-insider/news/migo-adds-friendless-prs-reit-to-exploit-capital-return-potential/a2448849?re=123381&refea=2077594&link_id=1692635

[makinbuks] 29/8/2024 15:19

I'm encouraged that Christopher Mills is involved. Good for shareholders. Going to be very interesting to see what emerges here

[jimbobbaby] 29/8/2024 10:21

Even if not sold if they bring the letting activity in house rather than having the fund fleeced with fees or all descriptions it could be a much better result. The feeling at the moment is that it is being milked.

[asagi] 29/8/2024 07:07

in the webpage that city1911 links to, Sky's Business Editor Mark Kleinman writes:

"Investors lay siege to boardroom of London-listed private rental group

Shareholders owning nearly 20% of PRS REIT, which has a market value of nearly £500m, are to push for the removal of chairman Stephen Smith and a strategic review that could lead to a sale, Sky News learns."

[city1911] 28/8/2024 18:19

https://x.com/markkleinmansky/status/1828859467451994570?s=46&t=QwBTpUxZhS26Ts05345o0A

[makinbuks] 28/8/2024 16:59

This seems to have recovered more quickly than most interest rate sensitive stocks. This may be partly why

hxxps://citywire.com/investment-trust-insider/news/migo-adds-friendless-prs-reit-to-exploit-capital-return-potential/a2448849?re=123381&refea=2077594&link_id=1692635

[giltedge1] 01/8/2024 13:57

I questioned a few weeks ago why not rising share price at 0.76 is now! glad I topped up, most welcome. Still good value cf savings account.

[pdosullivan] 22/7/2024 22:11

How many REITs are listed in the UK today compared to three years ago?

[elbrus55] 22/7/2024 19:17

A lot depends if you are UK taxpayer. If you have stock in an ISA, pension fund or are untaxed as a non-resident (but few DTAs exempt property income?) or are UK_taxed but within allowances then you should be OK.

[arbus5000] 22/7/2024 18:48

I find that Grainger PLC is often a useful comparison, and it is planning on becoming a REIT by october this year. I doubt it would do so if the REIT model was broken as suggested by the negative nancy's above.

[giltedge1] 22/7/2024 11:42

REITs pay no tax so saving £5,m a year that's 1.2,% extra yield. Rents expected to rise above inflation next few years last update 11%. Mgt should run the company for cash stop building after current batch is completed, capture ERV & clamp down on admin costs.

[elbrus55] 22/7/2024 03:24

As background. REITs were introduced so that pension funds could invest in them without suffering corporation tax on the rental income. Otherwise they would be much better off holding property directly (usually shopping centres, offices etc.) as they don't pay tax on that. The 90% distribution rule is to make sure the reit looks economically similar to a basket of direct property investments. If the REIT is doing a lot of reinvestment/property development then HMRC do still want to treat it like a 'business activity' and so will tax it like a normal equity.

[giltedge1] 21/7/2024 13:48

Savill s predicts house prices to rise 20% between 2025 & 2028. (Down 3% this year). So that's 7% pa plus 5% dividend + can add more properties to borrow against NAV as NAV rises. Also investors can buy in currently at great discount. Coupled with savings rates dropping soon, seems compelling buy.

[arbus5000] 19/7/2024 13:32

if PRSR and other reits are allowed to re-invest all their cash, expect precipitous drops in their share prices due to dividend cuts.

PRS was able to raise capital via share and debt issuance, and picked up c5,000 houses no where near the top of the market. According to its recent RNS, it has a low LTV, with fixed rates at a low level - so it financed at a great time.


It bogles the mind though, how the investment case for PRS has any relevevance in the judgement of the viability of the REIT regime. I suggest you keep your opinions on a dedicated thread.

RGL has done well, thanks - it just depends when and where you invested !

[pdosullivan] 19/7/2024 10:06

If PRSR was trading at 1x NAV then the dividend yield would be only 3.25pc. You can do a lot better than that sticking your money on deposit. So I don't see 1x NAV as achievable in the short term. This circles back to the comment about the UK REIT regime. If PRSR was investing its cash building homes instead of distributing it would probably deliver more shareholder value over the cycle

[spectoacc] 19/7/2024 09:26

Ah bless @arbus5000 (AKA Johnwig?) - how's your RGL been?

@giltedge1 - all the reasoning is in many posts above. But agree everything has its price, & good luck.

Your examples - I could give 10 counter-examples - all nearer to businesses than REITs. SGRO's a major developer; LMP a trader/acquirer (CTPT & LXI just recently); SAFE almost a full-on trading business, ie self-storage. But yes - there's a few exceptions.

It's not so much "..Bad mgt.." as the way the REIT regime is set up. As well as totally disproportionate costs to income. Mentioning LXI - they were charging something like £14m pa on a £1.5bn portfolio, fine, right? Only the net income was nearer £40m - so that was really £14m on £40m.

[arbus5000] 19/7/2024 09:07

nevermind SpectoAcc, he displays symptoms of PTSD from investing in a few failed REITS. I'm no pyschologist, but I would speculate that he also has multiple personality disorder as he has a few different sock-puppet advfn accounts.

[giltedge1] 19/7/2024 08:53

PRS Reit is good value, how could you say otherwise, I bought more at £0.76 last week?. NAV £1.23 50% discount! & a real discount, easy to value & sell. Dividend 5.3% & rising tax free in my SIPP. Properties brand new & below market value imo £200K which seems cheap for 3 or 4 bed semi or detached. In a 2 year view, at least 10% pa return at least. Admit admin expenses high, board need to take action.

Specto bad mgt not problem with Reits otherwise none listed, I have many posts on bad mgt & eg if you bought industrial units in M25 & done nothing as Terry Smith would say would have made 200 - 250% at least last 20 years.

eg 10 years
Segro 4 to 8 + div 4% pa
LMP 1.30 to 2 + div 5% pa
Safestore £ 2.5 to £ 8 + div 4% pa etc.

[spectoacc] 19/7/2024 06:22

I've views on PRSR's business model (I don't think it works/it's a wasting asset class), but won't repeat. Suffice to say I agree re the UK REIT regime. It basically ensures REITs are over-geared at the top of the market, and over-extended/over-distributing at the bottom.

Can raise all they want at the top, and splurge the money when things are expensive. Can't raise a dime at the bottom and worse - are often net sellers.

That, and the 90% divi rule. Very few (can't think of any) distribute 90% of earnings. They all get to a level, try to stick to it, end up distributing 110% or more.

US REIT regime seems much better.

The proof for UK REITs - any long term chart. Very few exceptions.

[pdosullivan] 19/7/2024 06:11

I think the shortcomings of the REIT regime are holding this stock back. It cannot raise equity at such a discount to NAV but the requirement to distribute 90 percent of profits means it cannot generate enough free cash flow to organically grow its portfolio in a market with such compelling fundamentals.