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Government-backed REIT looks to double investment
The real estate investment trust (REIT) backed by Homes England is looking to raise £250m more from the stock market.
PRS REIT, which invests in new build homes in the private rented sector (PRS), has fully committed the £250m raised in its initial public offering (IPO) last May and is seeking to double that figure by issuing new shares. The REIT has also agreed terms with lenders for £200m of debt investors.
Both moves are part of the company’s previously stated growth strategy, which is to target £1bn of investment in five years.
Steve Smith, chair of PRS REIT, commented: “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.
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“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.”
The company said its investment advisor had identified more than £540m worth of future PRS development opportunities, which would equate to around 3,800 new homes.
Up to now, PRS REIT has targeted areas outside London, and this is still the plan, with expansion planned for the East Midlands and South Yorkshire.
It speculates that it could deliver 10,000 new homes through construction framework agreements in place with builders Countryside, Keepmoat and Engie Regeneration, relationships with local authorities and support from Homes England.
PRS REIT is unlike the other REITs that have emerged over the past 12 months in the social housing sector in that it does not purchase supported housing.
