Amid the avalanche of results during this busy reporting period, you may have missed a bullish set of numbers from PRS Reit (PRSR). The company offers insight into how Reits grow. Or fail to.
PRS Reit is a buy-to-let landlord. Except not in the regular sense, because it buys homes en masse from housebuilders and lets them out. And, crucially, it does this before construction has begun, thus funding the development of new rental homes rather than buying existing homes to turn into rental properties, a cornerstone of its investment case.
Housebuilders like selling to PRS Reit when high interest rates mean the market for private buyers is weak. On top of that, residential rents are increasing at their fastest pace on record thanks to a strange mix of low supply, high wage growth, landlords passing on the cost of interest rates, renters' inability to buy, and high immigration. In short, business is booming.