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PRS REIT celebrates strong fourth quarter with high rental growth

25th Jul 2023 10:38

(Alliance News) - PRS REIT PLC on Tuesday said demand for its single-family home rentals remained strong during the final quarter of its financial year, amid a lack of supply of these in the UK.

The Manchester, England-based real estate investment trust said rental growth over the 12 months to June 30 was 7.5% on a like-for-like basis. This compares to 12-month growth of 5.7% as at March 31 and 5.1% as at June 30, 2022.

The number of completed homes rose 6.1% to 5,080 as at June 30 from 4,786 a year ago. Of these, 4,932 were occupied at the end of the quarter. The estimated rental value of completed homes increased by 15% to GBP55.0 million from GBP47.8 million.

PRS had 444 contracted homes, down from 693 a year before, while their ERV decreased 14% to GBP3.8 million from GBP4.4 million.

PRS did not declare a dividend for the quarter, but said it expects to do so by early August.

"The business model remains firmly supported by market fundamentals, most significantly, a rapidly expanding rental sector, population growth, changing household formation and grossly insufficient new housing volumes," PRS commented.

"Reflecting this and the general lack of supply of good quality rental homes, demand for the company's homes - single-family rental housing - remains very high. The performance of the portfolio continues to be outstanding."

Rent collection in the fourth quarter was 99% and total occupancy was 97% as of June 30.

Turning to its financial situation, PRS said about 82% of overall debt is now covered by long-term facilities thanks to the refinancing of its GBP150 million revolving credit facility earlier this month.

"With rental demand strong and rising, and the build-to-rent sector still nascent, the board believes that the encouraging fundamentals should be reflected in future asset valuations."

PRS REIT's stock was up 0.9% at 84.85 pence on Tuesday morning in London.

By Emma Curzon, Alliance News reporter

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