PRS REIT has reported an 11% uplift in net asset value (NAV) in annual results to 30 June 2024, as the rental income on its private rented housing portfolio increased 12% on a like for like basis.

The company’s NAV was 133.2p per share (2023: 120.1p) as the group’s portfolio of completed homes grew to 5,396 (from 5,080). A further 180 homes were under construction at 30 June as the group’s development pipeline comes close to completion.

Following shareholder pressure, a review of the options open to the company will be conducted by the new board (which now includes Robert Naylor and Chris Mills, with chairman Steve Smith stepping down).

Like-for-like blended rental growth was 12% over the year on its stabilised sites (where all units were completed and either all, or nearly all, had been let at the end of the comparative period). Re-lets to new tenants achieved 15% rental growth (2023: 12%). This contributed to a 19% uplift in EPRA earnings per share to 3.7p (2023: 3.1p).

Total dividends of 4.0p per share were declared (in line with 2023), with dividends covered on an EPRA run-rate basis from March 2024. The company said that it was reviewing the target dividend for 2025, and expect to provide an update to the market soon. 

The estimated rental value (ERV) of the 5,396 homes was £65.1m (2023: 5,080 homes with ERV of £55.0m). ERV was estimated to be £5.4m higher than passing rent, indicating strong rental demand.

Investment yields softened to 4.59% from 4.47% – the impact was more than offset by the increase in ERV, however.

Occupancy stood at 96% at 30 June 2024 (2023: 97%). Including all homes where a letting had been agreed (with applicants passing referencing and having paid a rental deposit), but occupation had not yet taken place, occupancy was 98% (2023: 98%).

EPRA loan to value (LTV) was 36% (2023: 37%), with 82% of the £427m of debt fixed at an average interest rate of 3.8% over an average term of 16 years.

Outgoing chairman Steve Smith commented: “These are truly excellent numbers reflecting the efficacy of the strategy and the hard work and commitment of the Board, our investment adviser, Sigma, our investors, banking and housebuilding partners, and local and central government supporters. To be in position to deliver a set of results of this quality after so many obstructions along the way, notably COVID and debt cost inflation, is a great achievement. The Company is perfectly poised for its next phase of growth; investors are in a very strong position, with multiple options and, on a personal note, I sincerely hope that investors grasp the opportunity to enable the business to achieve its full potential.

“The Board remains confident about prospects, with affordability – average rent as a proportion of gross household income – and asset performance both very strong. In line with our announcement issued on 13 September, the newly-constituted Board intends to review the Company’s strategy and will provide an update when appropriate. The Company is fully focused on maximising value for all shareholders.”