Grainger books increased profits from investment and rental growth

Build-to-Rent:

One of Britain’s biggest residential landlords Grainger boosted its profit for the 12 months ended 30 September 2019, with a 30% increase over the previous 12 month period. It’s rent roll income increased by 45% to £63.5m.

A large chunk of this growth can be attributed to the acquisition of a large of homes following Graingers’s taking full control of a property joint venture by acquiring the 75.1% stake it did not already own from APG for £396m (€454.6m). The GRIP portfolio contributed £17.7m, and delivered 1,152 new private rented sector (PRS) homes.

Grainger said it planned to invest more into the new home private rented sector (PRS) when it took over the entire share capital in the GRIP REIT from the Dutch asset manager. GRIP’s portfolio comprises 1,700 PRS units with a gross asset value of £696m and a PRS pipeline of £382m.

Grainger was established by the Dickinson family in 1912 as the Grainger Trust acquiring tenanted residential properties in Newcastle upon Tyne. In the 1970s and 1980s it acquired large residential estates from British Coal, British Rail and Reckitt & Coleman. It was first listed on the London Stock Exchange in 1983. In 1989 it acquired Channel Hotels & Properties and in 2003 it acquired Bradford Property Trust.

Grainger went through a major change of strategy when Helen Gordon was appointed Chief Executive in January 2016 from RBS where she had been Global Head of Real Estate Asset Management since October 2011. A large portfolio of controlled tenancy homes and German residential assets were disposed of, switching focus to the UK, in the PRS letting market and build-to-rent.

More than 1,000 PRS homes are expected to come on stream next year with a pipeline of over 9,000 homes in partnership with Transport for London. Grainger says its recurring rental income has the potential to more than double as it continues its development with its 75% residential portfolio.

Chief financial officer Vanessa Simms has said:

“The continued structural growth story with continuing undersupply of rental homes compared to demand, provides a strong positive outlook for sustainable rental growth for years to come.

“Our portfolio of attractive rental homes in high demand locations, our strong operational capability and fully integrated business model places us in an excellent position to continue building on our leadership in the UK residential rental market.”

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