PRS fund seeks another £250m

PRS REIT, the closed-ended real estate investment trust established to invest in new build homes in the private rented sector, has proposed a placing of new shares as it looks to raise a further £250m.

Sigma PRS Management, which set up PRS REIT in 2017, also confirmed that it has concluded discussions with lenders to secure £200m of debt financing on behalf of PRS REIT, with final documentation underway. The debt facility is expected to be used to deliver a further 1,380 PRS homes on sites that have already been identified.

The REIT was set up by sector specialist developer Sigma in 2017, raising £250m in its May IPO. This has now been fully committed ahead of schedule, with ten sites acquired, commenced or secured in the last quarter of 2017 for £11.2m. That first wave of investment will see 1,780 homes delivered, Sigma said.

In a quarterly trading update on 10 January, Sigma said that a further £540m of development opportunities had been identified.

On the fundraising, chairman Steve Smith said: “The PRS REIT has made strong progress since its IPO eight months ago, when we raised £250m to invest in new rental homes across the regions in England.

“Having fully committed these funds, we are delighted to be launching a second share placing, which is targeting up to circa £250m. The proceeds from this placing will enable us to continue to deliver more high quality rental homes for middle-income families.

“There is an urgent need for new rental homes across the country and we see our professionally managed, well-designed, new properties playing an important part in satisfying that demand, while also creating new, vibrant communities.”

The company has also declared its maiden dividend, of 1.5 pence per share; and declared its net asset value as of 31 December 2017 as 98.2 pence per share.

N+1 Singer and Stifel Nicolaus Europe are acting as joint bookrunners to the company on its share placing.