News

PRS REIT enters FTSE 250

News

Samantha McClary

30 September 2024

Investment/finance, Residential

PRS REIT, the residential investor at the centre of a shareholder battle, has moved into the FTSE 250.

The group, whose chairman Steve Smith has agreed to quit to calm a shareholder revolt, has nudged above the FTSE 250 automatic entry position and is currently ranked 325 in the FTSE listings.

PRS REIT said the inclusion in the FTSE 250 was a “landmark event” that reflected the “success of the company’s pioneering model, launched at IPO in 2017, to establish a delivery mechanism for the creation and management of a national-scale portfolio of high-quality, new-build rental homes for the private rented sector”.

Smith said: “PRS REIT’s entry into the FTSE 250 Index is a significant landmark and could not have been achieved without the backing of our stakeholders, including investors, banking and housebuilder partners, supporters in government and Sigma Capital Group.

“The UK’s lack of quality rental housing remains an acute problem, and we are proud to have successfully pioneered a new approach for delivering modern family housing at scale and to have created the largest single-family build-to-rent portfolio in the UK.”

PRS REIT said it expected to have a portfolio of around 5,600 homes by the end of Q1 2025, with an estimated rental value of £66.5m.

Last month, shareholders in PRS REIT requisitioned an EGM to vote on the removal of Smith as chairman and the implementation of a strategic review of the business. The calls came in response to the continuing discount to NAV at which PRS REIT’s shares trade.

Shareholders want a review of the business to be undertaken that could lead to a sale of its assets to repay debt where the cost of debt exceeds the net rental yield, a buyback of shares to target a discount to NAV of 10% or lower, or the potential sale of the whole business.

The group also wants to review all contracts between PRS REIT and its investment adviser Sigma PRS Management to ensure that the REIT has received sufficient value from transactions and that contracts contain robust provisions to enable Sigma to be held to account.

The shareholders said they believed there would be a “significant improvement in the value of the shares of PRS REIT” as a result of their proposed actions and they “strongly encourage all PRS REIT’s shareholders to support their proposals for change”.

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PRS REIT

PRS REIT, the residential investor at the centre of a shareholder battle, has moved into the FTSE 250. The group, whose chairman Steve Smith has agreed to quit to calm a shareholder revolt, has nudged above the FTSE 250 automatic entry position and is currently ranked 325 in the FTSE listings. PRS REIT said the inclusion in the FTSE 250 was a “landmark event” that reflected the “success of the company’s pioneering model, launched at IPO in 2017, to establish a delivery mechanism for the creation and management of a national-scale portfolio of high-quality, new-build rental homes for the private rented sector”. Smith said: “PRS REIT’s entry into the FTSE 250 Index is a significant landmark and could not have been achieved without the backing of our stakeholders, including investors, banking and housebuilder partners, supporters in government and Sigma Capital Group. “The UK’s lack of quality rental housing remains an acute problem, and we are proud to have successfully pioneered a new approach for delivering modern family housing at scale and to have created the largest single-family build-to-rent portfolio in the UK.” PRS REIT said it expected to have a portfolio of around 5,600 homes by the end of Q1 2025, with an estimated rental value of £66.5m. Last month, shareholders in PRS REIT requisitioned an EGM to vote on the removal of Smith as chairman and the implementation of a strategic review of the business. The calls came in response to the continuing discount to NAV at which PRS REIT’s shares trade. Shareholders want a review of the business to be undertaken that could lead to a sale of its assets to repay debt where the cost of debt exceeds the net rental yield, a buyback of shares to target a discount to NAV of 10% or lower, or the potential sale of the whole business. The group also wants to review all contracts between PRS REIT and its investment adviser Sigma PRS Management to ensure that the REIT has received sufficient value from transactions and that contracts contain robust provisions to enable Sigma to be held to account. The shareholders said they believed there would be a “significant improvement in the value of the shares of PRS REIT” as a result of their proposed actions and they “strongly encourage all PRS REIT’s shareholders to support their proposals for change”.