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
  0.40 0.43% 93.80 139,559 11:18:13
Bid Price Offer Price High Price Low Price Open Price
93.70 94.00 94.60 93.20 93.60
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Real Estate Investment Trusts 26.64 44.11 8.90 10.5 515
Last Trade Time Trade Type Trade Size Trade Price Currency
11:12:11 AT 417 93.80 GBX

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07/2/202312:37:::: The PRS REIT ::::122

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Posted at 08/2/2023 08:20 by 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 93.40p.
Prs Reit (the) Plc has a 4 week average price of 82.90p and a 12 week average price of 82.20p.
The 1 year high share price is 114p while the 1 year low share price is currently 80.60p.
There are currently 549,251,458 shares in issue and the average daily traded volume is 772,914 shares. The market capitalisation of Prs Reit (the) Plc is £515,197,867.60.
Posted at 11/1/2023 10:56 by davebowler
Mkt Cap £458m | Share price 83.3p | Prem/(disc) -28.5% | Div yield 4.8%


PRS REIT (PRS) published a 2Q23 update this morning. Key take-aways are: (i) 57 new rental homes have been added to the portfolio. (ii) ERV has increased +17% y.y (iii) An additional 613 homes have been contracted at varying stages of the construction process. (iv) Occupancies are at 98% (after taking into account new applicants) with LFL rental growth at 5.7%.

Liberum view

We view the strong growth in LFL rentals and improvement in occupancies as encouraging data points, indicating that the BTR market is holding up. The statement mentions that affordability remains strong with average rent as a proportion of household income at c.25%.

Posted at 29/12/2022 11:18 by makinbuks
When you say struggling I don't think its that it cant be done, simply that they don't like the price and want to wait and see what conditions are like in another three months. That's a bit of a gamble but clearly they are of the view that rates will rise less than anticipated as inflation will be driven lower by recession
Posted at 19/12/2022 13:11 by giltedge1
Housing crisis fuelled by 20% drop in building work announced today.
The rising price of materials and the increased cost of carrying out construction work are shaking the industry to its core. With fewer new builds going ahead the housing deficit behind the housing crisis is only set to widen. PRS Reit has saved about 15 - 20% on build costs, buy building in past two years or so. Replacment cost is no guarantee for increase in NAV, but it helps!

Posted at 27/11/2022 00:15 by smithers1
Giltedge thanks for the comments.

My own analysis is suggesting a lower div. and happy to share as this stock is not widely covered by analysts.

Annual results 2022 show ERV of completed & contracted sites of £56.7m. The ERV is above the actual rents received as it is based on the rents achieved on new lettings, with those rents then applied on a site by site basis across the portfolio to arrive at the estimated ERV. There is a slight lag until annual rent reviews complete across the portfolio over the period to catch up with the ERV but also and more importantly PRSR has opted to only increase rents on existing tenancies by an average of 4% V's 10% on lets to new tenants. Potentially rents received in 2023 year may be circa 6% below the stated ERV. Likely 4% increases are a truer reflection of the market as on a site of 80 homes for example, whilst you may achieve the 10% increase on a couple of new lets after previous tenants vacate, it is debatable if the remaining existing 70 or so tenants would tolerate a 10% increase without considering alternatives. One swallow doesn't make a summer as the saying goes but this is nonetheless how valuation surveyors arrive at the ERV and this is a contentious point for all REITs. Also the stated ERV of £56.7m includes estimated rents on some sites not built out yet so those rents are not yet being received. Notwithstanding lets look ahead and use £56.7m.

Non-recoverable direct property costs (property management charge which is outsourced, landlords insurance, maintenance, bad debts etc.) was 18.2% in recent results. Deduct that from ERV of £56.7m = £46.4m.

The REIT's admin expenses for 2022 were £2.2m and the investment adviser's asset management fee was £5.2m = £39.0m.

Interest on bank loans is the trickiest part and slightly subjective when forecasting. Ignoring non-cash amortisation charges for legals and arrangement fees, debt interest was £8m in 2022. £350m of the £440m total debt facilities were drawn as at 30 June 2022. The facilities will likely become fully drawn as the remaining sites complete in 2023. £190m of the £440m of debt is on a variable rate which will now be higher. Add to that in 2022 the £90m of undrawn debt was all variable rate so was probably only being charged at non-utilisation rates rather than full rate. At the existing debt interest rates as at 30 June 2022 per the annual results, once fully drawn annual debt interest would be £13.9m. Not factoring in increased rates on the variable debt, debt interest deduction of £13.9m = £25.1m.

No. of shares in issue 549.3m = 4.6p div. per share.

The key variables are:

-rents received / how close PRSR can get this to the stated ERV. My analysis above could currently be overstating by circa 6% even once remaining sites in progress are fully built out
-Ongoing rental growth which will hopefully counterbalance some of this. As you have noted the rents are affordable so hopefully despite the outlook there is scope to drive further increases
-debt interest costs and the uncertainties around the cost of the variable rate debt and whether or not if will be fully drawn once the remaining sites are built out

As an aside and for the sake of clarity, the Prospectus of 2017 actually stated an initial dividend of 5 pence per share paid out of capital initially, with a targeted covered dividend of "6 pence or more" by June 2020...... The targeted dividend has since been downgraded a couple of times. It is somewhat irrelevant now but disappointing that despite reported stronger than anticipated initial rents achieved, strong rental growth, tightening of yields, and a strong housing market (until June 2022 at least) the dividend remains an as yet not fully covered 4p per share. It does leave one wondering where the targeted "6% or MORE" came from and what assumptions were used to arrive at that figure!

Posted at 04/11/2022 17:21 by smithers1
Debt is low at circa 30% with 60% fixed.

Whilst house prices might only fall by 10-20% the PRS Reit's NAV is calculated on an investment yield basis. The debt covenants with lenders in terms of max loan to value ratios will also be based on the investment value. The concern with yields moving out to adjust to the higher interest rate environment is therefore that a small movement in yield could knock significantly more than 20% off the investment value of the portfolio with the negative effect on NAV enhanced further by the (modest) gearing. With the portfolio previously valued off an approx. 4% yield and the outlook uncertain as to where rates will end up, it is plausible that values could fall by 30-40%.

The REIT may also need to retain cash/income that could otherwise be paid out as dividends to provide additional security to its lenders to ensure compliance with the max LTV debt covenants.

Add to that the increasing debt interest costs on the circa 40% of debt that is not fixed.

Whilst the underlying income stream is to date holding up very well, giving consideration to the 3 factors -investment yield sensitivity on NAV; additional security provision to banks to comply with max LTV covenants; and increasing debt interest costs on the 40% variable rate debt - I am not convinced the current share price has fallen far enough to properly account for these. I will be sitting it out to see if and how these factors materialise next year

Posted at 13/10/2022 07:25 by jonwig
Telegraph Questor -

Matthew Norris, Gravis Capital ...

first invested in the fund, which describes itself as “the largest portfolio of single‑family rental homes in the UK”, in September last year in the belief that it benefits from what he calls the “generation rent” megatrend: an acceptance among younger people that they are unlikely to be able to buy a property for some time and that they will instead seek high‑quality rental accommodation.

He says PRS Reit’s annual results, published on Tuesday, illustrated the robust performance of generation rent assets. It said its portfolio was performing strongly and rental demand continued to grow.

It added that rising interest rates were expected to reduce mortgage affordability and “drive demand in the rental sector as prospective homeowners turn to rental alternatives”, while “high‑quality, well located homes combined with customer service remain highly attractive to prospective renters”.

While the overall rise in rents during the year was 5.1pc, it achieved 10pc increases on properties let to new tenants, compared with about 4pc on renewals with existing ones. Rent arrears were just £600,000 at the end of the financial year in June, compared with net rental income for the year of £34.3m. The portfolio grew by 20pc from 3,984 homes to 4,786 over the year.

Despite all these promising facts, we must acknowledge the continuing dangers of the wider economic environment. As we wrote above, rising interest rates and bond yields tend to push up yields on other assets – and hence push down their prices.

We don’t know where interest rates will peak so downward pressure on the valuation of the assets of this and other property funds is possible. Equally, markets look ahead so some of the expectation of higher rates will already be “in the price”. We also have the buffer of a 28pc share price discount to the portfolio’s net asset value.

Norris notes that many Reits are currently trading at discounts of nearer 50pc but says his research suggests that buying “quality”; Reits at either a more modest discount or even a premium has tended to produce better returns than simply buying those on the widest discounts.

“PRS’s discount of 28pc to the last reported net asset value is not the widest around but the trust is certainly among the highest‑quality portfolios of assets, especially in the private rental sector,” he says.

Posted at 11/10/2022 08:47 by davebowler
Robust occupier demand drives performance

Mkt Cap £486m | Share price 88.5p | Prem/(disc) -23.8% | Div yield 4.5%


PRS has delivered a good set of results in the 12 months to 30 June 2022, with EPRA NTAps up +18% to 116.4p on strong NRI growth (+60% y/y). Performance has been driven by robust occupier demand as rising interest rates make home ownership more unattainable for some yet leave room to increase rents on affordable dwellings. LfL blended rental growth over the year was 5.1% with re-lets to new tenants achieving c.10% uplifts in rents and the average tenant spending 25% of their income on rent, down from 29% last year. Adjusted EPS increased +150% from 1.2p to 3.0p and the group’s gearing ratio remains low at c.31% with 62.5% fixed at an average rate of 2.9%. Notwithstanding affordability pressure from the cost of living crisis, increasing mortgage rates will continue to boost demand within the UK rental market. Management guide for the portfolio to reach 5k homes by the end of CY22 with completed assets performing strongly.

Liberum view

We continue to see value on the occupier demand for UK rental market as increasing mortgage rates make home ownership increasingly unattainable for some. While we would expect rental growth to moderate from here due to increasing utility cost pressures, rental homes remain a more affordable option than ownership, which should help to somewhat support residential values in the face of rising interest rates.

Posted at 11/10/2022 06:28 by jonwig
I've been looking at the FY results (I don't hold):

The debt profile looks very good, and I see around 95% of their homes look likely to be built by Vistry (now that it's taken over Countryside). I don't think the concentration will cause any problems, but who knows, in the current environment.

Rent collection at 99% looks great, but are there headwinds, and how strong?

My only concern is that buying anything in the UK looks a gamble right now.

Posted at 26/9/2022 20:32 by smithers1
Annual report for the year to June 2021 notes portfolio benefited from yield compression with an investment yield range of 4.0 - 4.75% applied. States 0.125% improvement in yield would increase NAV by £24m whilst worsening in yield by 0.125% would lower NAV by £22m. Portfolio has grown since then as funds deployed so impact would be greater either way. This time last year UK 5 year GILT negative 0.10% and 10 year UK GILT +0.18%. Currently 5 year is 4.06% and 10 year 3.83%. Would expect investment yield range of PRSR portfolio to have moved out significantly with corresponding impact on NAV
Posted at 25/7/2022 07:54 by davebowler

5% like-for-like rental growth in 12m period to June 2022

Mkt Cap £600m | Share price 109.2p | Prem/(disc) 4.5% | Div yield 3.7%


PRS REIT added almost 300 completed units in the six-month period to June 2022. The portfolio now comprises 4,786 completed units with a further 693 contracted. During the quarter, PRSR completed the acquisition of a contracted site in Nuneaton from Sigma Capital Group (50 completed and let homes) and a new 41-unit development site in Burton-Upon-Trent. Three further site acquisitions are expected in the period to December 2022.

PRSR achieved 100% rent collection in the 12 months to 30 June 2022. Total occupancy of the completed units is 98% and a further 1% are reserved. Like-for-like rental growth on stabilised sites over the 12 months to June 2022 was 5.1%.

Liberum view

PRS REIT has now achieved 84% of its target of 5,700 completed units. PRSR's NAV performance has improved considerably since June 2020 due to an acceleration in the pace of completions, yield compression and portfolio rental growth. The six-month period to June 2022 is also likely to show meaningful capital growth given the like-for-like rental growth achieved in the period. Operational performance has also been strong with consistently high levels of rent collection and occupancy.

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