The current private rental market is highly fragmented – 78% of all landlords own just a single dwelling and only 8% are full-time landlords.2 The PRS REIT is the first real estate investment trust focusing purely on the private rented sector. It aims to bring institutional efficiencies to the market, only invests in newly built houses (mostly through their principal partner Countryside) and targets middle-income families at affordable rents.
The current portfolio is primarily invested in the North West, where the needs for housing are large. However, through time this is likely to be less regionally concentrated. Sigma Capital, the investment adviser to the REIT, is currently helping local authorities release land for development and to meet their housing goals.
The REIT prides itself in providing ‘Forever Homes’, marketing its homes through its ‘Simple Life’ brand. Key to its success is providing customers with a range of house styles, which accord with their current life stages, allowing both couples and families to grow and retirees to downsize, without the hassle of buying and selling. They will not agree to a site if there is not a local school within a one-mile radius rated ‘good’ or ‘outstanding’ and or with strong transport links to major conurbations – perfect for families.
The fund also got the backing of Homes England, the non-departmental public body tasked with accelerating the delivery of housing, who took a 10% equity stake at IPO.
We furthered our due diligence in November 2018 by visiting both developed and developing sites in and around Greater Manchester.
Source: Sigma Capital Group, as at May 2019