Grainger private rented sector pipeline up to £756m

Helen Gordon

Newcastle-based Grainger plc, the UK’s largest listed residential landlord, said its profit before tax increased 23% to £50.6 million in the six months to March 31 and that it currently has a secured private rented sector (PRS) investment pipeline of £756 million.

Grainger said its interim dividend per share is up 9% to 1.74p.

It reported net debt of £912 million “reflecting our continuing investment into PRS assets.”

In its outlook, Grainger said: “We expect to deliver a good performance in the second half of the year and a positive overall result.

“We remain selective and disciplined in our investment approach and the strength and quality of the PRS investment opportunities we are seeing provides us with increased confidence as we follow this growth trajectory.

“The potential for the private rented sector is compelling and alongside securing new investments, we are focused on further developing Grainger’s platform to support growth, scalability and the delivery of excellent and efficient services for our customers.”

Grainger CEO Helen Gordon said: “I am pleased to report another period of strong performance.

“We delivered 9% growth in net rental income and 20% growth in adjusted earnings.

“We continue to lead the private rented sector (PRS), a sector undergoing structural growth, and we are well positioned for the future.

“Our secured PRS investment pipeline now stands at £756m and we have a further £258m at the planning or legals stage.

“We are a business on a strong growth trajectory and the opportunity in the UK PRS market is vast.  

“We are uniquely placed given our market leading position and our in-house capability to originate, invest and operate homes for rent.

“Our recent development, Argo Apartments in Canning Town, London, has delivered an exceptionally high-quality rental product at affordable levels and we have seen excellent demand for these homes with 97% let in four months, above estimated rental levels, representing a 7.5% gross yield on cost.

“The customer service and experience we are delivering is at the forefront of the PRS market and we will continue to invest and innovate to further build on our position.

“Our sales have continued to perform well with profit up 11%.

“We continue to be disciplined in our asset recycling to support improved portfolio performance and enable future growth.

“In the few weeks since the period end, we sold our investment in our Walworth joint venture, further simplifying and focusing Grainger and providing additional capital for recycling into new PRS schemes.

“We also refinanced our corporate bond, with a new £350m, 10-year issuance, extending our debt maturity and reducing costs.

“We have recently acquired two attractive new PRS schemes, one in Southampton and another in Milton Keynes, which together will deliver 393 new high-quality homes for rent.

“We are improving customer operations and our customers are responding by staying with us longer.

“Our like-for-like rental growth was 4.1% over the six-month period.

“We are positioning Grainger for the next stage of growth, with investment in people, processes and technology to optimise our efficiency and scalability.

“We look to the future with confidence as we develop further good quality homes for rent, for the benefit of our customers, shareholders and employees.”