The PRS REIT, the closed-ended real estate investment trust that invests in high-quality, new build, single-family Build to Rent homes completes its 5,000th Build to Rent home and provides a trading update for Q3 of its financial year ending 30 June 2023.
The Company is delighted to report that its 5,000th rental home has now been built. This has helped to take the total number of completed homes in the PRS REIT’s portfolio at 31 March 2023 to 5,010. A further 516 homes with an estimated rental value (ERV) of £5.2m were under way at this date. The delivery programme is now approximately 89% complete.
The ERV of the 5,010 completed homes is £52.7m per year, 16% higher than a year ago (31 March 2022: 4,616 homes with an ERV of £45.5m per year). Once the delivery programme has been completed, the number of homes in the portfolio will increase to approximately 5,600 homes with an ERV of c.£58m per year.
“The completion of the 5,000th rental home marks a significant milestone for The PRS REIT and demonstrates our success in building the largest portfolio of high-quality, Build to Rent, single-family rental homes in the UK over the last six years. We are in the final phase of the current delivery programme and expect to complete at around 5,600 homes with an estimated rental value of c.£58m per annum once fully let.”
Steve Smith, Non-executive Chairman, The PRS REIT plc
The 5,000th Build to Rent home is a three-bedroom house at the company’s Brookfield Vale site in Blackburn, Lancashire. This scheme includes 154 high-quality two, three and four-bedroom Build to Rent homes.
The development offers views of the Pennines and is one mile from Blackburn town centre. It is also close to good schools and public transport links. As with all PRS REIT’s sites, it is managed under the award-winning rental brand, Simple Life, which aims to set a new, higher standard of customer care in the private rented sector.
To mark PRS REIT’s 5,000th home, the company is supporting Speed of Sight, a Lancashire-based charity established by professional racing driver, Mike Newman, who was born without sight and is the fastest blind man on land and water, to provide driving experiences to blind and disabled people. PRS REIT became involved with Speed of Sight after it was nominated by a resident in the company’s 2021 12 Days of Christmas campaign.
Asset performance
PRS REIT reports that the performance of the portfolio remains extremely strong. Occupancy on 31 March 2023 was 97%, with 4,860 of the 5,010 completed homes occupied. An additional 65 homes were also reserved at that date for applicants who had passed referencing and paid rental deposits, giving an occupancy rate of 98%. Like-for-like rental growth on stabilised sites was strong at 5.7% on an annualised basis.
Affordability also remains strong, with average rent as a proportion of household income at c.25%, which is significantly less than Home England’s limit of 35%.
Rent collection (defined as rent collected in the period relative to rent invoiced in the same period) was strong at 101%. Total arrears continue to be low at £0.7m at 31 March 2023, which is c.1% of annualised ERV on completed units.
“Demand for our homes remains high, as our consistently strong performance measures, including occupancy levels and rent collection, show. This reflects the desirable nature of our houses – built to high-quality specifications and located close to good schools and public transport links – as well as their affordability for families. Average rent is about 25% of a household’s gross income.
“We would like to thank all who have helped us to reach this important landmark of 5,000 completed homes – including investors, housebuilding partners and Homes England. We are pleased to be meeting an important societal need and playing a part in solving the UK’s urgent requirement for single-family rental homes.”
Steve Smith, Non-executive Chairman, The PRS REIT plc
Sigma PRS Management Ltd – a wholly owned subsidiary of Sigma Capital Group Limited – is Investment Adviser to The PRS REIT plc. It sources investments and operationally manages the assets of The PRS REIT plc and advises the Alternative Investment Fund Manager (AIFM) and The PRS REIT plc on a day-to-day basis in accordance with The PRS REIT plc’s Investment Policy.
