Private rental sector investor PRS REIT’s earnings soared in its latest half-year results, on the back of strong demand for homes and high occupancy and reservation levels.
Pretax profit for the six months to the end of 2021 grew by 90% to £38.6m from £20.3m, and revenue was up by 86% to £19.9m from £10.7m. PRS REIT generates revenue entirely from rental income, which increased by 95% over the half year to £16.4m from £8.4m, reflecting the growth of the portfolio.
Occupancy as at the end of 2021 was 98%, and rent collection was at 99%. In addition, the firm posted rental growth with new tenant lettings. Average like-for-like rental growth per unit on stabilised sites was 3.2% over the whole of 2021. Average like-for-like rental growth per unit on stabilised sites over the six months to the end of 2021 was 2.4%.
The company’s portfolio, which spans the major regions of England and central Scotland, stood at 4,489 completed homes with an additional 949 homes under way at the end of 2021. This was an increase of 42% against the same point in 2020. The most recent data shows the portfolio at 4,561 completed homes, with a further 877 homes under way as of 11 March.
The value of the REIT’s net assets on 31 December was £572.9m, up by 20% year-on-year, equating to NAV per share of 104.3p. The company will maintain a dividend of 2p per share for the interim period and target a dividend of 4p for the full financial year.
The company plans to buy two development sites over the coming months. Rob Sumner, a residential investment director at Sigma Capital, the REIT’s manager, told EG the South Midlands and the North of England are both in focus due to the advantageous ratio between site costs and rents.
“The marketplace is there, the income is there, and it is our job as managers of this trust to make sure that as much of that income actually reaches the shareholder as is possible,” Sumner said.
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