The board of PRS Reit (PRSR ) has confirmed it is in ‘active discussions’ with a number of potential buyers over the sale of its portfolio of new-build homes.

In a stock exchange notice, the £732m real estate investment trust’s board said it had made a data room available for prospective parties and was continuing to explore all options to maximise shareholder value. It plans to update the market on its strategic and sale process in the first quarter of 2025. 

The recently replaced ‘poison pill’ contract, which now allows the trust and manager Sigma to terminate on 12 months’ notice, appears to be paying off already.

The board of the trust, which now includes Chris Mills and Rob Naylor, the latter of whom came onto the board in place of ousted chair Stephen Smith, launched the strategic review and sales process in October.

Mills and Naylor were appointed non-executive directors after a group of disgruntled shareholders campaigned against Smith over the extension of the Sigma management agreement to 2029. They claim investors had not been consulted thoroughly and it would put off prospective buyers.

The 4%-yielding fund, which won the best specialist trust at the Citywire Investment Trust Awards in 2023 and was shortlisted this year, has delivered a strong performance over one, three and five years.

Its net asset value (NAV) has grown 14.5% over the past 12 months, while returns of 49.1% over three years and 72.5% over five years make it the top performer in its peer group, Deutsche Numis data shows.

Although the shares have recovered since the start of the strategic review, they are still lagging the NAV over three and five years, leaving the trust at a discount of 22%. Investors have been put off by a general downturn in sentiment towards property as interest rates rose, but more specifically by the high level of debt PRS is shouldering.

PRS has total fixed long-term debt facilities of £352m costing an average of 3.8% in interest, which is, however, less than the 4.6% yield it earns from its properties.

It does have some costly debt, having drawn £34m from a two-year debt facility with RBS charging 6.95%, and a full-drawn £33m facility with Barclays at 8.55%.

Shares in the fund rose 1% to 104.22p on Tuesday morning following the announcement, narrowing the discount to 22% and extending share price gains to 34% over the last six months.