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Private rented sector REIT gets more government funding

The government-backed real estate investment trust (REIT) has raised another £250m, including more funding from Homes England.

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Picture: Getty
Picture: Getty
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The government has put more money into a private rented sector investment trust #ukhousing

Sigma Capital's REIT has doubled its investment with £250m from shares #ukhousing

The private rented sector REIT continues its goal of £1bn of investment in five years #ukhousing

This is the second time Homes England has put funding into the REIT, which invests in new build homes in the private rented sector (PRS).

The PRS REIT announced its intention to raise £250m more at the start of the month, and said it has also agreed terms with lenders for £200m of debt investors to support its target of £1bn of investment in five years.

Homes England, the government’s national housing agency, added £5m of The PRS REIT’s latest £250m proceeds, which were raised by selling more shares in the company.


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When the REIT was launched by asset management company Sigma Capital in May last year, nearly £25m of its £250m initial public offering (IPO) was provided by Homes England.

The REIT will continue to invest across the UK, aiming at eventually delivering a dividend yield of 6% and net total shareholder returns of 10%. Until June 2019, though, it is targeting a dividend yield of 5%.

The PRS REIT said it had identified a pipeline of around 3,800 new homes worth around £540m. Its current investment accounts for around 1,720 homes in the North West, the Midlands and South Yorkshire.

Steve Smith, chair of The PRS REIT, said: “We are aiming to create a very substantial portfolio of high-quality new houses, mostly focused on middle-income families and these new funds are a key step towards this objective. We believe we are the only PRS operator building new family houses to this scale across England.”

Sigma Capital’s subsidiary, Sigma PRS Management, remains its investment advisor, and the company said this gives it the potential to deliver more than 10,000 homes through framework agreements already in place with developers Countryside, Keepmoat and Engie.

Graham Barnet, founder and chief executive of Sigma Capital, added: “Family rental houses remain a critically undersupplied area of the rental market and we are creating well-designed high-quality houses near good schools and transport links, which will be professionally managed and offer families security of tenure.

“Homes England’s involvement, following on from the IPO, is also a tremendous signal and we would like to thank the agency for its committed support.”

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