Edinburgh-based property investor Sigma Capital has hailed the resilience of its Private Rented Sector (PRS) Real Estate Investment Trust (REIS) in the face of the coronavirus.
The PRS REIT’s interim results revealed the trust’s fixed-price contracts model meant the temporary closure of all its housebuilding sites would have few adverse implications for its cashflow.
The trust had paid interim dividends of 1p per share during each of the first and second quarters of its financial year, but said it would now defer a decision on any possible third-quarter dividend until its final quarter, when it hopes “the outlook is likely to be clearer”.
A further 444 homes were added to the trust’s portfolio in the six months to 31 December, with a further 330 houses taken over since Hogmanay. The company now has 1,947 homes spread across England.
Once the trust has spent all its money, it expects to have around 5,300 houses in its portfolio, with 3,000 currently being built and £75 million left in its kitty. Sigma Capital noted that “full deployment of net funds is now expected in calendar Q3, in line with the revised strategy, which takes account of new opportunities in the changed environment to acquire completed assets”.
Steve Smith, the trust’s chairman, said: “While the coronavirus pandemic has created significant uncertainty in every walk of life, we believe that our business is resilient. Our delivery model and processes substantially mitigate the company’s exposure to construction and other operational risks, and we have a robust balance sheet and low gearing, which are unaffected by a pause in construction activity.
“Our customer base is diversified and the underlying demand for good-quality rental housing is strong. Despite the current macro uncertainty, we continue to view long-term prospects with confidence as we meet the critical need for quality family houses in the UK.”
