Prs Reit Share Discussion Threads

[makinbuks] 18/1/2022 11:10

On the whole I agree but two concerns in todays announcement. First the unpaid rent may be less than 1% of ERV but its has still doubled in a year. Lets hope that's not a trend. Second with 4,489 completed homes and 949 under construction, "towards the end of the calendar 2022" seems unambitious to complete the 5,000th

[playful] 18/1/2022 07:44

I do like PRS...

With average rents of c.£9,500 a year / c.£800 a month for the portfolio we have scope for easy rental growth as highlighted in the blog post mentioned above.

The Company plans to acquire at least two further sites during the first half of calendar 2022, utilising debt funding, and now anticipates delivering its 5,000(th) completed home towards the end of calendar 2022. It continues to target a total portfolio of 5,700 homes, with an ERV approaching GBP55m per annum.

Demand for the Company's homes remains strong. Of the 4,489 completed homes, 4,411 (98%) were occupied at 31 December 2021, and a further 37 homes were reserved for qualified applicants with rental deposits paid.

Rent collection was also strong at 99% (relative to rent invoiced in the period). Total arrears remained low at GBP0.4m at 31 December 2021 (31 December 2020: GBP0.2m), representing less than 1% of annualised ERV on completed units.

[pdosullivan] 04/1/2022 12:12

Hi all, just giving a second and final push to my blog on PRS REIT, which I am a shareholder in. The blog can be found here - https://tbifund.wordpress.com/2022/01/01/the-prs-reit-prsr-ln-safe-as-houses/

[pdosullivan] 01/1/2022 17:22

Hi all, I have written a blog on PRS REIT, which I am a shareholder in, that may be of interest to you. The blog can be found here: https://tbifund.wordpress.com/2022/01/01/the-prs-reit-prsr-ln-safe-as-houses/

[davebowler] 15/12/2021 09:04

Acquisition of three target sites

Mkt Cap £582m | Share price 106.0p | Prem/(disc) 7.1% | Div yield 3.8%

Event

PRS REIT has acquired three of the five targeted sites that were identified at the time of the equity raise in September. The gross development cost of the sites is £60m with an expected ERV of £3.6m (6.0% yield on cost). All three sites are currently under construction. The two remaining sites will be funded from debt facilities and are scheduled for acquisition during H1 2022.

Liberum view

PRSR has now committed all of proceeds (£56m) that were raised in September. The company expects to begin receiving income on completion of the initial homes from the end of February 2022 and practical completion across all of the sites is expected by June 2024. In terms of guidance on the expected earnings impact, the board previously indicated that it expects the transactions to be accretive to IFRS EPS from the first full financial year after the issue (i.e. the year to June 2023) and accretive to EPRA EPS from the second full financial year after the issue (i.e. the year to June 2024). The board expects the current 4p dividend to be almost fully covered on a run-rate basis by the end of FY 2022

[davebowler] 12/10/2021 08:20

Liberum;

Full dividend cover expected by FY 2023

Mkt Cap £555m | Share price 101p | Prem/(disc) 2.0% | Div yield 4.0%

Event

PRS REIT's results for the 12-month period to June 2021 have confirmed an EPRA NTA per share of 99.0p (previously reported), resulting in a 9.4% NAV total return over the year.

The total number of completed and contracted units at 30 June 2021 was 5,055, representing a slight reduction from December 2020. The portfolio is spread across 64 sites and has an ERV of £48.1m on completion (6.1% yield on cost). Rental growth for new lettings rose by 6.2% and renewals increased by 4%.


1,902 units were completed in FY 2021 (June period end), representing a 91% increase in the year. A further 307 homes were added in the quarter to September 2021, bringing the total number of completed units to 4,291 (June 2020: 2,082). PRS REIT has now achieved 85% of its target of 5,200 completed units (prior to any adjustments resulting from the recent capital raise). The company raised £56m post period end to fund a pipeline of five additional sites (500 homes). Two of the sites have been acquired.


Rent collection has been strong with 98% collected in FY 2021, rising to 99% in the quarter to September 2021. Total arrears were recently reported to be £0.4m (0.8% of ERV on completed units). Occupancy of completed units was 98% with a further 1% of units reserved. EPRA EPS in FY 2021 rose to 1.2p, representing dividend cover of 0.3x. The board expects the current dividend to be almost fully covered on a run-rate basis by the end of FY 2022. Gross to net costs showed an improvement from 21.1% in FY 2020 to 19.5% in FY 2021.


Liberum view

PRSR had previously disclosed the NAV figures for June together with the key portfolio operating metrics. Development profits have driven the high return in the period as the pace of completions accelerated. Development gains will remain the key driver of performance over the medium term. The recent raise has pushed out out the company's delivery of EPRA EPS growth. At the time of the interim results in March 2021, the company had indicated it expected to be able to increase the dividend in FY 2022. That now appears unlikely and we expect the company will maintain an uncovered dividend of 4.0p pa

[makinbuks] 30/9/2021 10:37

Interesting so the placing failed to get the interest hoped for yet the Primary Bid offer did really well.

What now? Scale back the acquisition plans or increase borrowing?

[raptor_fund] 21/9/2021 17:48

Two thoughts on this:

1) The managers are the main builders of the houses so there's potential for conflict of interests.

2) A lot of new house prices (and therefore land acquisition) are set by the government subsidised help to buy scheme. This means these new houses will have to pay HTB prices for the land, without the subsidy.

[makinbuks] 20/9/2021 08:38

Surprised NAV only 99p given the strong rise in house prices. With shares at a premium, makes sense to go for a placing (quick and cheap)

[sphere25] 08/6/2021 10:28

Further to the post above, the answer is in...

The buying ahead of the FTSE re-jig (PRSR goes into the Small Cap and All Share Indices) has now resulted in a premium to EPRA NAV. Clearly this one was known well in advance so the early buyers have done well, many promotions and demotions can be decided very close to the review or the actual close the day before.

There is still strong demand for shares here. We can see anomalous volumes and some chunky trades in recent days so possibly a few more pennies for holders to come here but it has been an interesting example.

A steady slow one to post on following NSCI - absolute rocket ship! Lobbed those now.

Elsewhere notable activity...

RCH - some big chunks going through (major ding dong going on at 246p) which will be the previously mentioned sellers in size continuing to lob but the volume is significant and a break of that 247p (where it knocked its head twice prior and fell back) mark will be key to watch.

All imo
DYOR

[makinbuks] 13/4/2021 09:26

Unbelievably house prices have been rising strongly so we should see good profits from construction and NAV revaluations. I would expect rent arrears to rise as furlough ends and until the economy recovers in 2022. But overall if they get to the point that the yield is fully covered I expect this to go to a premium

[sphere25] 13/4/2021 08:47

Thanks for the updates Davebowler.

I guess it does pay to buy boring turtle type shares - it is quite relaxing actually, hardly any drama. With the price now at 94.5p, clearly the discount to the EPRA NAV has narrowed substantially.

I have this bad habit of taking some shares off the watchlist once they hit targets (alot having been too cautious targets, which have been blown away in this relentlessly bullish one way market) as the next batch of opportunities are sought out.

Keeping this one on to see how the tracker buying plays out. The market has bought up the shares well in advance, so will they be lobbing to the trackers (as we get closer to the FTSE review in June) at around the EPRA NAV or will the demand coming in result in some form of premium?

Don't know the answer but will keep a watch.

All imo
DYOR

[davebowler] 13/4/2021 08:09

Liberum;
Mkt Cap £463m | Prem/(disc) -1.8% | Div yield 4.3%

Event

PRS REIT has reported total completed units of 3,590 at 31 March 2021 (December 2020: 3,163), representing a 13% increase (427 units) in the quarter. The total number of completed units in the period since June 2020 is 1,508 (72% rise). PRS REIT has now achieved 70% of its target of 5,200 completed units.

The proportion of completed units has picked up considerably in recent quarters due to the number of sites now under construction and three portfolio acquisitions of completed properties. This includes a fully-let development of 123 homes from Blackrock Real Assets and 31 homes in Birmingham from Sigma Capital (the investment manager).


Rent collection and occupancy remain high. Rent collection in in H2 2020 was 100%. Total arrears are currently £0.2m (0.6% of ERV on completed units). 95.6% of the completed units are occupied and a further 2.1% are reserved. The manager also reports that 44 of the homes under construction are pre-let.

Liberum view

Today's update confirms the progress highlighted in the recent interim report. PRS REIT is on track to reach the expected 5,000 completed units by late 2021/early 2022. NAV performance has picked up as the pace of completions accelerates, resulting in an uplift from development profits. The proportion of completed units increased markedly since June 2020 and will contribute to an improvement in dividend cover.

Portfolio performance has been resilient over the last 12 months as rent collection levels have been relatively unaffected. Rental demand remains high with with rent levels holding at pre-Covid levels. The key focus for the company remains on progressing development schemes and building up the level of dividend cover (0.1x dividend cover in the six-month period to December 2020). The shares have re-rated significantly in recent weeks due to deployment progress and an improvement in income visibility.

[sphere25] 29/3/2021 12:41

And catching up with boring PRSR:

"The Company's transfer from the Specialist Fund Segment to the Premium Segment of the Main Market of the London Stock Exchange took place on 2 March. The migration will enable us to broaden the share register and facilitates our eligibility for inclusion in FTSE's EPRA and UK Index Series."

Just want to see how the buying comes in now from the trackers for the next review in June and whether it results in closing the NAV from the current price of 87.1 to the EPRA NAV of 96.2p.

Nothing of note as yet, it is early. Have to see if the wider market holds completely stable till the review in June too, but should be easy to see any whoppers being bought here because PRSR barely bats an eyelid most of the time.

All imo
DYOR

[davebowler] 24/3/2021 10:18

Liberum;
Event

PRS REIT has reported an EPRA NAV per share of 96.2p at 31 December 2020 (95.1p at 30 June 2020), resulting in a NAV total return of 4.3% in the six-month period and 5.5% overall in 2020. Revaluation gains accounted for 95% of the returns in the period.


The total number of completed and contracted units at 31 December 2020 was 5,126 (December 2019: 4,945). The portfolio is spread across 65 sites and has an ERV of £48.8m on completion (6.2% yield on cost). PRS REIT has reported total completed units of 3,163 at 31 December 2020 (June 2020: 2,082), representing a 52% increase (1,081 units) in six months. This represents 62% of the total number of completed and contracted units. The company expects completed units to rise to 5,000 by late 2021/early 2022. Net LTV has risen from 15% to 29% since June 2020 as deployment has progressed.

The proportion of completed units has picked up considerably in recent quarters due to the number of sites now under construction and three portfolio acquisitions of completed properties (175 units). This includes a fully-let development of 123 homes from Blackrock Real Assets and 31 homes in Birmingham from Sigma Capital (the investment manager).


Rent collection has remained robust with arrears unchanged at £0.2m (less than 1% of ERV). EPRA EPS in the half-year to December was 0.2p. Occupancy of completed units was 96.3% with a further 1.7% of units reserved. Like-for-like rental growth in H2 2020 was 0.5%.The company remains on track to distribute 4.0p in FY 2021 (June period end) and now expects to be able to increase the dividend in FY 2022.

Liberum view

NAV performance has picked up as the pace of completions accelerates, resulting in an uplift from development profits. The average uplift on completed assets to investment value was 9.7%. The proportion of completed units increased markedly in H2 2020 and will contribute to an improvement in dividend cover.

Portfolio performance has been resilient throughout 2020 as rent collection levels have been relatively unaffected. Rental demand remains high with with rent levels holding at pre-Covid levels. The key focus for the company remains on progressing development schemes and building up the level of dividend cover (0.1x dividend cover in the six-month period to December 2020). We expect the shares to re-rate in 2021 as the company approaches its target of 5,200 units and income visibility improves.

[sphere25] 12/2/2021 14:36

Just bought more.

Boring boring PRSR!

Two weeks to get to 93p?

Interested to see how the tracker funds approach the buying here.

Did I mention how boring PRSR is?

All imo
DYOR

[sphere25] 11/2/2021 10:32

Wonder how far along they are in changing listing - possibly ready for the review in June?

Nonetheless, good ole boring PRSR has almost closed that gap now so the bulk of the capital growth must be in the price now. With a minimum 4p dividend, the yield is hardly a disaster compared to cash or bonds so perhaps more of these lagging REIT's will re-rate higher as confidence in the economic recovery grows.

To my untrained eye, it looks like the NAV are stable or actually going up in the sector with not only PRSR but BREI upgrading. There is alot more interest with much heavier buying in RDI recently and separately even HWG upgraded their numbers.

Possibly a signal on the improving fundamental picture. Still, slow and boring ones have been quite good really.

All imo

DYOR

[davebowler] 10/2/2021 11:14

Liberum;
Deployment progress leading to improved performance

Mkt Cap £421m | Prem/(disc) -11.4% | Div yield 4.7%

Event

PRS REIT has reported an EPRA NAV per share of 96.1p at 31 December 2020 (95.0p at 31 December 2019), resulting in a NAV total return of 5.4% for 2020. An unchanged dividend of 1.0p has been declared for Q4 2020.

Liberum view

NAV performance has picked up as the pace of completions accelerates, resulting in an uplift from development profits. The proportion of completed units increased markedly in H2 2020 and will contribute to an improvement in dividend cover. PRS REIT reported total completed units of 3,163 at 31 December 2020 (June 2020: 2,082), representing a 52% increase (1,081 units) in six months. This represents 62% of the total number of completed and contracted units. The company expects completed units to rise to 5,000 by late 2021/early 2022.

Portfolio performance has been resilient throughout 2020 as rent collection levels have been relatively unaffected. Rental demand remains high with with rent levels holding at pre-Covid levels. The key focus for the company remains on progressing development schemes and building up the level of dividend cover (0.03x dividend cover in the year to 30 June 2020). We expect the shares to re-rate in 2021 as the company approaches its target of 5,200 units. This should be supported by the move to the Premium Segment, enabling inclusion in the FTSE UK and EPRA indices.

[sphere25] 12/1/2021 12:48

Breaking out.

Taken a few more. Been hard to buy all morning with nothing available at numerous price points and nothing now at 84p. 139,771 buy print at 84.9p showing how thin the supply has been when the offer at time of the trade was 83p.

The turtle is daring to do an FIF.

Closing the gap to 90p looks the technical play now.

All imo
DYOR

[sphere25] 11/1/2021 14:27

Added here. Heavy buying coming in at 79p and 80p. Wouldn't have added if it was the usual mediocre daily amounts so it might be setting up for a breakout with that level of interest based on a bullish statement.

Shouldn't be too much drama here compared to the majority going forward so a more steady move in a market which has many participants now wondering if we are really in some form of mania/bubble.

FCA are out today warning on crypto and even SCSW have seen enough to suggest valuations are extreme in the US and a fall in excess of 50% could be coming. Who knows when though? We need a healthy correction soon. Previous parabolic blow off tops are great on the way up but absolutely brutal when it all comes crashing apart.

Even I have caught the mania with speculative buys in AGL and SWG recently - properly pushing the boat out!

That's as blooming well far as it will be going in the near term! :-)

All imo
DYOR

[sphere25] 11/1/2021 10:23

"The Board can now confirm its intention to apply to the FCA for the Company's issued share capital to be admitted to the Premium Segment in early 2021. The transfer is expected to broaden the Company's share register and facilitate its eligibility for inclusion in FTSE's EPRA and UK Index Series."

That's an interesting piece of news regarding the premium listing. This will head into the FTSE Small Cap and naturally that will mean trackers having to buy in. This share clearly isn't going to set the world on fire with share price moves but a bullish technical point of note.

[cwa1] 11/1/2021 08:11

Morning all. Seemed a reasonably solid and upbeat statement on the whole to me, so I decided to join your gang with a maiden purchase here this morning. Good fortune to you all :-)

[arbus5000] 27/12/2020 19:38

you are advertising the same alleged conflicts of interest that have plagued this REIT since its launch.

Why don't you check yourself in for the broken record syndrome?

[kingrat1] 27/12/2020 10:11

Crude using average prices that cover such a large area. Prices can vary significantly street by street. It also somewhat misses the point about the obvious conflicts of interest that have yet to be acknowledged by the Board let alone addressed. The PRS Reit launched in May 2017 and since then the share price is DOWN 23%, more if you consider the second £250 mill was raised at £1.025, and that's after a strong rebound from £0.58 at the start of the pandemic. This was supposed to be a safe and boring investment trust.... In contrast Grainger's share price is UP 19% over the same period.....

[arbus5000] 24/12/2020 14:08

the average price for first time buyers in Manchester is around 160K (April-2020), Rightmove has the average flat at 200k (last year average)

PRS has just acquired 123 homes for 19million, which comes in at 154K.

Unless these homes are in a severe state of disrepair, it looks like a bargain to me.

(retail) Letting agents typically charge 10-20% for the management of properties.

Perhaps a better peer for PRS Reit is Grainger (GRI), which has a similar sized property portfolio, further north, but was worth significantly more ! I have no idea how much their management fees are though.


Edit: GRI's estimated gross rental yield is 6.5%, but the realised dividend yield is a smidge below 2%. They have more properties, and have been established since 1912.