Grainger bets on London rental revival as tenants drift back
Brittan’s biggest residential landlord says it’s still confident about demand for London homes.
Demonstrating confidence by maintaining its most recent dividend, the £1.9bn stock market quoted residential landlord company is reporting an increase in enquiry levels, and says its conviction in London’s rental market remains strong.
Grainger has said that lettings enquiries are up by nearly 90% since the start of this year, and according to the company’s CEO, Helen Gordon, much of the demand is in London.
As people drift back to office working following the lifting of the Covid restrictions, landlords worry about the long-term implications for the letting market, particularly in the capital – will demand for rentals be affected, will there be less need to live near London offices if so called “hybrid working” becomes the norm?
Companies are beginning to look to a post-Covid future and for many the vision is a model that combines remote work and office time.
Back in the bottle
As employers grapple with the issue of deciding the best way forward for their workers, it’s becoming clear that for many employees they don’t want to the genie to be pushed entirely back into the bottle.
Surveys show that, where possible, many workers prefer a mixture of home and office working, with a 60/40 office/remote working split being suggested by the experts. This shift could have huge implications for cities, particularly in terms of transport and housing.
However, homeworking is not for everyone; there are also serious drawbacks for companies with having people working off-site – there could easily be a longer-term drift back to offices as memories of the pandemic begin to recede. It is perhaps far too early to say what the real long-term affect will be on renting in cities.
Grainger says: “Despite the short-term market challenges in London of the past year, our portfolio performed well and our conviction in London’s rental market remains.
“As a leading city, London will continue to be an attractive location to live in and it will experience population and economic growth in both the near term as restrictions are lifted, and in the longer term, which will underpin rental growth and support valuations.”
CEO Helen Gordon (pictured) adds: “We have seen good demand for our rental homes as lockdown lifts, with people attracted to everything else London has to offer, such as the bars, restaurants and culture.”
Grainger is one of the biggest residential landlords with over 9,000 rental homes, one third of which are located in London. The company has more in development across sites in the capital including Tottenham Hale.
Grainger saw its rental growth increase by 1.7% over the six months to March 31 and has maintained its shareholder dividend at 1.83p per share.
Top cities
Meanwhile, concerning renting more generally, Colliers International report that the top 10 UK cities for residential investment are: Cambridge, Edinburgh, Bristol, London, Manchester, York and Belfast.
All have strong economies with highly skilled and educated workforces, house price growth, strong rental yields and low levels of income inequality, the report by the global real estate firm finds.
The Colliers’ study compared the top cities from the UK against 20 indicators in four categories: economics, property, education and liveability.
Jo Edwards, head of Colliers’ South West and Wales office of Colliers, has said of 3rd place Bristol: “We are seeing a range of residential opportunities and developments coming forward for a variety of accommodation, and complementary commercial space.”
Andrew White, head of residential at Colliers, has said that residential investors were often attracted to the big-name cities, but the firm’s analysis offered a “wider perspective”.
In the Bristol case, Mr White says: “With its significant regeneration programme and strong house price growth it’s only natural that Bristol has come high up on the list”.
Main pic credit: Grainger’s Millett Place near the Thames Barrier where one-beds start from £1,575 a month.
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