Share Name Share Symbol Market Type Share ISIN Share Description
Prs Reit (the) Plc LSE:PRSR London Ordinary Share GB00BF01NH51 ORD 1P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 85.00 595,883 07:38:17
Bid Price Offer Price High Price Low Price Open Price
84.00 86.00 85.00 85.00 85.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment Trusts 12.95 16.41 3.30 25.8 421
Last Trade Time Trade Type Trade Size Trade Price Currency
16:13:00 O 20,000 84.8959 GBX

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Date Time Title Posts
12/1/202112:48:::: The PRS REIT ::::60

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Prs Reit Daily Update: Prs Reit (the) Plc is listed in the Real Estate Investment Trusts sector of the London Stock Exchange with ticker PRSR. The last closing price for Prs Reit was 85p.
Prs Reit (the) Plc has a 4 week average price of 76.20p and a 12 week average price of 71p.
The 1 year high share price is 92.50p while the 1 year low share price is currently 60p.
There are currently 495,277,294 shares in issue and the average daily traded volume is 2,016,802 shares. The market capitalisation of Prs Reit (the) Plc is £420,985,699.90.
sphere25: 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: "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.
kingrat1: 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: 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.
wingchan: Another massive conflict. The investment advisor sigma capital sells a site it developed and managed on behalf of BlackRock to the PRS Reit who it acts on behalf on.... presumably Sigma had a financial interest on the site depending on its performance for BlackRock which will have been driven largely by the sale price but don't worry, there was an "independent" valuation by Savills who undertake all of the Reit's and Sigma's valuation services...... total lack of corporate governance! An independent party and an independent valuer should have been appointed to act for the REIT in this transaction given the obvious conflict. Also for clarity Sigma were contractually obliged to acquire shares in the REIT. Under the terms of their development management agreement where they receive a generous 4% fee, half must be re-invested in the REIT. That they paid Investors Champion to put out a research note implying that they were buying shares of their own free will is seriously misleading. The 1.5m shares acquired by Sigma on 25th Nov were done so as a contractual obligation. What is curious given they could have issued new shares at NAV and invested the funds in their "attractive proposition", was that they instead bought them from an institution that was prepared to sell 1.5m shares at 76p. That says more about the outlook than anything. I hope the appointment of a joint broker is not a preclude to attempting to raise more equity taking the REIT back to cash drag and negative dividend cover. On every financial metric the Reit has underperformed to date. It has some way to go before DEPLOYING the £900m gross which was originally targeted in two years... The dividend yield will be sub 4% not 6%+ and that is after many more years taken to deploy the funds than was originally advised with initial sites having the benefit of rental growth. The NAV remains significantly below the initial raise price inspite of beneficial headwinds through rising house prices. Yield compression and a robust rental collection rate that compares favourably to many commercial property sectors. The NAV was meant to be growing at 10%+ per annum at this point per original marketing forecasts. The only beneficiary has been the Investment Advisor and yet the conflicts of interest continue unchallenged
sphere25: So we know who the big buyer has been in the market. Just watching the price movement and chart here, looks set to test a breakout. It's a turtle though, boring and slow. 82p by Christmas? Probably need to stop knocking them because of what the FIF turtle has done recently.
davebowler: Liberum; £1.1m share acquisitions by investment adviser Mkt Cap £372m | Prem/(disc) -19.2% | Div yield 5.2% Event Sigma Capital Group, the parent company of the investment adviser to PRS REIT, has acquired 1.5m shares in the company at a price of 76p per share. Sigma Capital now owns 5.9m shares (1.2% shareholding) in PRS REIT. Liberum view The £1.1m share acquisition demonstrates confidence in PRSR's portfolio. Capital deployment has progressed this year, with completed units representing 51% of the portfolio at the end of September. This remains the key area of focus for the company in order to build the level of dividend cover (0.03x dividend cover in the year to 30 June 2020). 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.
packoflies: Analysis of Interim Results – Improper governance by REIT Board & time to sack the Investment Advisor Sigma Capital • Claimed £771m completed and contracted GDC + £75m “strategically deferred” spending = claimed deployable funds of £846m • The £75m balance of funds were meant to be contracted by end of March at the latest as per the 14th Jan “2nd Quarter Update”. Over the intervening period ZERO additional funds have been committed or contracted with the figure remaining static at £771m. Given that the Coronavirus did not impact the UK until early to mid March ( it was fortuitous that the PRS REIT had been unable to commit ANY of remaining £75m prior to this and can now look to "deploy it on strategic income producing opportunities". A more cynical view would be that the funds have not been “strategically deferred” to take advantage of opportunities but that these remaining funds are not available to be drawn under the PRS REIT’s 45% maximum gearing as detailed below. • Current NAV of £470m supports debt of £385m assuming maximum permissible gearing of 45%. Taking account of dividends paid out of equity and overall cashflow to date, estimated deployable equity of approx. £430m. Max. total deployable funds of equity and debt of £815m, not £846m as claimed. Gross yield of 6.2% on GDC of £815m equates to £50.5m gross income. Deduction of 22.5% gross-to-net, administrative expenses and debt interest at 2.72% as per interim results, leaves estimated net income of £22.8m. Stabilised geared dividend of 4.61p per share pre any coronavirus related issues……… • Lack of comment on dividend in interim results other than indefinite deferral of dividend covering the 3 months to 31st March 2020. When the stabilised dividend target is reduced AGAIN from the already reduced 5.5p per share it will be blamed on the coronavirus but in truth would have comfortably been sub 5p regardless. • 2 years and 7 months from inception up to 31 Dec 2019, the REIT’s rental income just covers costs and debt interest but it remains significantly cashflow negative as there remains no dividend cover. The cancellation of the uncovered dividend for the 3 months to end of March 2020 and subsequent dividends is the sensible option to preserve deployable funds and NAV irrespective of resultant Coronavirus issues. • Deployed only £487m to 31st Dec 2019, of which only £212m are completed income producing assets (Notes to the Financial Statements 4.), of £900m gross funds. Noted under “debt facilities” it will take a further 18 months to complete the current phase of construction. Once again this makes a mockery of the comments by the Investment Adviser’s chief executive Graham Barnet in September 2018 where he outlined his desire to raise a third £250m in early 2019 with a clear intention to increase assets under management irrespective of the fact it was not in the best interests of PRS REIT shareholders as was the case with the raising of second £250m in Feb 2018……… There is a clear and fact based track record of Sigma acting in its best interests and not its investors but that is for another day. The 3rd raise thankfully did not happen but it illustrates the significant and ongoing conflicts of interest between the Investment Advisor and the PRS REIT. (hxxps:// • Claimed that completed and contracted sites have a GDC of £771m. However, Capital Commitments outstanding as at 31st Dec 2019 were £189m (notes to the financial statement 3&8). Add to that £487m deployed to 31st Dec 2019 (see notes to financial statement 4) equates to a total GDC of £676m, £95m less than the claimed figure…….. • The Investment Advisor Sigma Capital is paid a (generously high) 4% development management fee. This is separate to the profit it makes from selling its own completed sites to the PRS REIT and the 1% annual management fee it is paid (hxxps:// Sigma is required under its contract with the PRS REIT to invest half of the development management fee in PRS REIT shares. Since the REIT’s inception up to 31st Dec 2019 the Investment Advisor had been paid £15.51m in development management fees alone so should have invested approx. £7.75m in PRS REIT shares. Yet as at 31st Dec 2019 Sigma had 4.39m shares……….. even allowing for bi-annual subscription of shares something is awry. • Stated gross to net of 18.2% in interim results but rental income in 6 months to 31st Dec of £5.607m less non-recoverable property costs of £1.140m as per income statement represents a 20.3% gross to net. This will spike significantly over the coming months in light of coronavirus but was already on an upward trajectory and will be a key determinant of the stabilised dividend yield. Year ended 30th June 2018 gross to net of 15.5%, Year ended 30th June 2019 gross to net of 17.7%.
steviet1: Following Invesco's continued sell-down of their holding in the PRS REIT last month, Aviva another major institutional holder have today also significantly reduced their holding. Not encouraging signs. Worth noting that Sigma Capital, the investment Adviser to the PRS REIT, have been contractually obliged to invest half of the 4% development management fees they receive into PRS REIT stock. Assuming they have developed approx. £500m of sites for the PRS REIT to date that would equate to development management fees of approx. £20m, with half used to acquire PRS REIT stock. One can only wonder how far the PRS REIT share price would have fallen without a forced £10m buyer in the market. Given the PRS REIT is close to deploying all funds, Sigma will shortly no longer be a forced buyer of PRS REIT stock - at this point expect the PRS REIT share price to continue its downward trajectory.
3ratty: Concerning points raised and noted Quintus. The fact the NAV was not meant to drop below 98p is a real worry. Presumably when this was inserted into the Prospectus it was set at a level low enough to allow some headroom so as not to be breached. Yet two years on the reported 30th June 2019 NAV was 95.8p and is most likely now sub 94p following the 2p per share final dividend paid in August given the ongoing absence of any significant rental income. That suggests things are not going to plan and has the alarm bells sounding. Following your comments Quintus I have like you focussed on the cashflow from the 2018 and 2019 year end results. Being a property REIT there are not many moving parts so it is fairly straightforward to analyse. Taking account of net funds raised, annual administrative costs (including investment management fee), dividends paid out, net rental income received, interest received on cash on deposit and debt interest paid, from the £500.5m gross raised, investable equity had reduced to £452.25m as at 30th June 2019. That was pre the deduction of the final 2p dividend which amounts to £9.91m paid out on 30th August. As per the recent first quarter update, the rental value of completed homes had increased to £12.3m from £10.7m as at 30th June 2019. Whilst slightly crude if one estimates the rental value as at 30th June 2020 by applying the same percentage increase quarter on quarter it would take it to £19m as at 30th June 2020. For sake of argument and for optimism’s sake call it £20m, so an average rental income received estimate for the current financial year of £15.5m seems reasonable enough. Perhaps generously applying the 17.5% gross to net deduction as per the 2018/19 year end results (given this had increased from 15.5% year on year so may well be higher again this current financial year) produces a net rental income for the current year of £13.2m. Keeping administrative expenses flat at £5.9m as per the 2018/19 financial year reduces cashflow to £7.3m. Interest from cash on deposit should likely be lower than the £0.8m received last year as the remaining £130m (from the original £500.5m of funds raised) is expended but for sake of argument again assume +£0.8m. However, having drawn a full £100m of debt pre 30th June 2019 at a swap rate of 1.588% plus margin (albeit not having yet spent any of it) and committed to a further £250m of debt, debt interest and charges will be significantly higher in the current financial year. If one assumes a not unreasonable margin of 2%, debt interest on the £100m would amount to £3.6m. Charges relating to the other debt will likely push this higher but again being optimistic stick with £3.6m. Including the recent dividend payment made in August, the dividend payments made in the 2019/20 financial year will be approximately £24.8m. That results in a NEGATIVE cashflow for the 2019/20 financial year of -£20.3M. Investable equity is therefore reduced from £452.3m to £432m. As per the 2018/19 year end results that figure is pre the final 2p dividend of £9.9m to maintain the 5p target likely to be paid 30th August 2020. As per Quintus the concern is around the significant reduction in investable equity and consequential impact on the amount of debt that can be drawn within the 45% gearing restriction, and ultimately on the stabilised dividend. If optimistically the PRS REIT is able to support a NAV of 94p per share that equates to £465m which would enable £380m of debt to be drawn assuming 45% gearing. £380m of debt plus the say £420m of investable equity (given the REIT is likely to remain in negative cashflow into the 2020/21 year), provides an estimated total of £800m of investable equity. As per the first quarter trading update, the £740m GDC of contracted and completed sites is stated to generate an estimated £46m of rent, so a 6.2% gross yield on cost. If that gross yield is applied to the assumed £800m of total investable equity it would generate rent of £49.6m. Applying a 17.5% rent reduction as per the 2018/19 results (albeit this could well be higher if it continues to trend upwards) reduces income to £40.9m. Administrative costs of £5.9m reduce this further to £35m. Total debt interest costs are the big unknown. £150m of debt is at a low swap rate of 1.164% plus margin and the existing £100m of debt is at 1.588% plus margin. That would leave £130m to draw from the revolving credit facility at three month libor (currently 0.8%) plus margin. A best guess but if a 2% margin is assumed that would result in annual debt interest charge on £380m of debt of £12m. It is worth noting the revolving credit facility is of a short term nature being only for two years (with an ability to extend for a further two) so it is likely the interest cost on this element of debt would go up if it were to be fixed longer term. Notwithstanding, £12m of debt interest would reduce net income to £23m. Given 495,277,294 shares currently in issue that equates to a dividend of only 4.64p per share against shares issued at £1.00 and £1.025 respectively. The uncertainties in that estimate lie in the cost of debt (which could be higher or lower as margins are unknown), the actual gross to net rental reduction against that adopted of 17.5% (which is arguably optimistic given it is trending upwards and certainly longer term will be a key variable to monitor), and rental growth. The above has not assumed any rental growth over and above a 6.2% gross yield on GDC. The 2018/19 annual report provides a portfolio analysis as does the maiden annual report. Comparing the market rental values on those sites featured in the 2017/18 report to the same sites listed in the 2018/19 report produces an aggregate annual rental growth of only 0.39%. Whilst one would hope this picks up it has certainly not been evidenced over the last year. In conclusion, there is a real possibility the stabilised dividend will be sub 5p per share and as Quintus noted the NAV is likely to remain under pressure. The REIT is currently targeting a stabilised dividend of 5.5% down from the original 6%+ but the evidence suggests this will have to be downgraded again. Given the PRS REIT will be geared to 45% and the risk that brings with it, plus significant uncertainty around the longer term gross to net reduction to the rental income and whether or not rental growth materialises, the PRS REIT is arguably not offering attractive return prospects at present. The annual report states valuations range from 4.3% - 4.8% investment yields. At these levels (which applies to the majority of REITs) any change in yields is likely to have a significant impact on NAV. Were yields to compress by only a marginal amount there could be a significant boost to NAV whilst also allowing debt drawn to increase. Equally were yields to move out marginally, NAV could fall significantly, correspondingly lowering the amount of debt that could be drawn or, if already fully drawn, requiring further equity from investors to provide sufficient security to lenders. Until the equity and debt are drawn and deployed with stabilised returns established it would be premature to raise additional equity without detrimentally impacting returns through further cash drag. Equally a raise given the current share price is significantly below the initial two raises would be dilutive to existing shareholders and is therefore unlikely.
Prs Reit share price data is direct from the London Stock Exchange
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