Today The PRS REIT announced the successful raise of gross proceeds of £250 million through a placing, offer for subscription and intermediaries offer (the “Issue”). The UK Government’s Homes and Communities Agency (“HCA”) has supported the Issue with a direct investment in the Company of c. £25 million (c. 9.99 per cent. of the Issue).
The Net Proceeds of £245 million will be used to invest in a portfolio of newly-constructed residential PRS sites of multiple units. These units will mainly comprise family homes and be located across sites in cities and towns in regions across England, with a focus on the main conurbations and largest employment centres outside London. The locations follow the main rail and road infrastructure, including the proposed HS2 and HS3 rail networks. The assets will come with the benefit of a 10 year National House Building Council or equivalent warranties, with a consequently low level of capital expenditure allied to a predictable and low cost maintenance regime.
The Investment Adviser, Sigma PRS Management Limited (a subsidiary of AIM quoted Sigma Capital Group plc (ticker: SGM)), will source investments and manage the assets of the PRS REIT and advise the Company on a day-to-day basis in accordance with the Company’s Investment Policy. The Sigma Group is one of the leading providers of PRS properties in the UK, having already successfully delivered and let over 1,100 homes in the last 30 months.
A pipeline of c. 2,535 new homes with a Total Cost of c. £375 million is already identified and contracted, including a First Acquisition Portfolio of c. £72 million of assets either completed or under construction.
The Company’s objective is to provide investors with an attractive level of income together with the prospect of income and capital growth through investment in a portfolio of newly-constructed, residential PRS sites of multiple units.
- The PRS REIT is targeting a stabilised dividend yield of 6 per cent. or more per annum and net total shareholder returns of 10 per cent. or more per annum post stabilisation
- The target dividend yield in the period to 30 June 2018 is 5 per cent
Application has been made for admission of the Ordinary Shares to be admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange. It is expected that Admission will become effective and dealings in the Ordinary Shares will commence at 8.00 a.m. on 31 May 2017.
Singer Capital Markets is acting as financial adviser and joint bookrunner and Stifel is acting as joint bookrunner to the Company.