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PRS profit jumps amid ‘robust’ demand

News

Akanksha Soni

20 March 2024

Residential

PRS REIT has more than doubled its profit before tax for the six months ending December, citing solid occupancy and strong demand.

Profit before tax has leaped to £30.3m during the six-month period compared with H2 2022, when it was £14.7m, while revenue was up 16% to £28.1m.

EPRA earnings per share grew by 13% to 1.8p, while net rental income was up 17% to £22.9m.
The number of completed and contracted homes at the REIT has grown to 5,576, compared with 5,526 in December 2022.

The REIT is targeting a portfolio of 5,600 homes in its first phase, which it expects to reach by the end of 2024. This would have an estimated rental value of £64m per annum.

Between 1 January and 8 March this year, 42 new homes were added to the portfolio, taking its count to 5,306 completed homes with an ERV of £61.7m.

A further 270 homes with an ERV of £2.5m were under construction in March.

Chief executive Graham Barnet told EG: “The scale of opportunity is vast as only 2% of the rental market is professional build-to-rent and, of that 2%, less than 10% is single family homes.

“There are another 3m homes to be built for rent over the next x number of years. We have to find a mechanism to take this current phase into the next phase and grow this again.”

PRS REIT non-executive chairman Steve Smith said: “Despite the continued pressure in the wider economy, occupancy levels, rent collection, affordability and demand have all remained at very high levels, whilst arrears continued to stay low.

“These factors have helped to drive the increase in cash generation and predictable income flows achieved in the period as our portfolio moves closer to completion.”

Smith added that further rental growth this year is on the cards.

“We operate in a very robust segment of the property rental market – single family rental – and macro factors remain very supportive of the business,” said Smith.

“This reflects the structural lack of supply of homes in the UK, and strong demand – which has been further fuelled by the adverse effects of higher interest rates for prospective home buyers.”

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PRS REIT

PRS REIT has more than doubled its profit before tax for the six months ending December, citing solid occupancy and strong demand. Profit before tax has leaped to £30.3m during the six-month period compared with H2 2022, when it was £14.7m, while revenue was up 16% to £28.1m. EPRA earnings per share grew by 13% to 1.8p, while net rental income was up 17% to £22.9m. The number of completed and contracted homes at the REIT has grown to 5,576, compared with 5,526 in December 2022. The REIT is targeting a portfolio of 5,600 homes in its first phase, which it expects to reach by the end of 2024. This would have an estimated rental value of £64m per annum. Between 1 January and 8 March this year, 42 new homes were added to the portfolio, taking its count to 5,306 completed homes with an ERV of £61.7m. A further 270 homes with an ERV of £2.5m were under construction in March. Chief executive Graham Barnet told EG: “The scale of opportunity is vast as only 2% of the rental market is professional build-to-rent and, of that 2%, less than 10% is single family homes. “There are another 3m homes to be built for rent over the next x number of years. We have to find a mechanism to take this current phase into the next phase and grow this again.” PRS REIT non-executive chairman Steve Smith said: “Despite the continued pressure in the wider economy, occupancy levels, rent collection, affordability and demand have all remained at very high levels, whilst arrears continued to stay low. “These factors have helped to drive the increase in cash generation and predictable income flows achieved in the period as our portfolio moves closer to completion.” Smith added that further rental growth this year is on the cards. “We operate in a very robust segment of the property rental market – single family rental – and macro factors remain very supportive of the business,” said Smith. “This reflects the structural lack of supply of homes in the UK, and strong demand – which has been further fuelled by the adverse effects of higher interest rates for prospective home buyers.”