7 February 2024
Grainger
plc
("Grainger", the "Group", or the "Company")
TRADING
UPDATE
Strong rental growth and
portfolio expansion continues
· Like-for-like PRS rental growth 8.4% YTD
· Occupancy 97.2% (PRS)
· Sales
of regulated tenancy homes at prices 2.6% above
valuations
· Over
600 new homes delivering in H1
Grainger plc, the UK's largest
listed provider of private rental homes with a c.£3.3bn operational
portfolio of c.10,200 homes and a £1.6bn pipeline of a further
5,634 build-to-rent homes[1], today provides
an update on trading for the four months to the end of January
2024, alongside its AGM which is being held today at its head
office in Newcastle upon Tyne. The Company will announce its half
year results for the six-month period ending 31 March 2024 on 16
May 2024.
Helen Gordon, Chief Executive of Grainger,
said:
"Positive momentum continues within
the business, underpinned by our market leading operating platform.
We are maintaining strong levels of rental growth with
like-for-like rents in our PRS/Build-to-rent portfolio growing
8.4%, while maintaining healthy customer affordability levels.
Occupancy remains high at 97.2%. Our forward-looking key
performance indicators show continued high levels of rental demand
over the coming months, supporting occupancy.
"Sales from our legacy regulated
tenancy portfolio continue to perform well with strong liquidity
and pricing. The sales market is proving robust with a high
proportion of our sales going to 'best and final' bids. On average,
we are achieving sales prices 2.6% above valuations.
"Since our year end results in
November, we have completed 307 homes at The Copper Works in
Cardiff and continue with the phased delivery of homes at Weavers
Yard in Newbury, with leasing in line with
our underwriting assumptions. In the next
month we will see two new build-to-rent schemes launching in
Birmingham and Bristol totalling 606 homes.
"In line with our stated strategy,
we are continuing to build on our geographic clusters of PRS
(build-to-rent) developments which delivers operational and
financial efficiencies, and we are on track with the delivery of
our committed pipeline which will deliver significant growth in
EPRA Earnings over the coming years."
Strong rental performance continues
Our market-leading operational
platform continues to deliver value.
|
· Like-for-like rental growth continues strongly:
|
Jan24
|
Jan23
|
o Total like-for-like rental growth YTD:
|
8.3%
|
6.1%
|
o PRS
like-for-like rental growth YTD:
|
8.4%
|
6.1%
|
§ New Lets
YTD:
|
8.5%
|
7.8%
|
§ Renewals
YTD:
|
8.4%
|
5.0%
|
o Regulated tenancy like-for-like rental growth YTD:
|
7.6%
|
6.2%
|
· Occupancy in our PRS portfolio remains high (spot, as at 31
Jan):
|
97.2%
|
98.7%
|
Robust sales performance
·
Whilst an increasingly smaller part of the
business (c.23% by value), sales generated from our regulated
tenancy portfolio as it unwinds (vacant possession) continue to
provide a reliable source of capital for our continued
growth.
·
We are seeing good levels of liquidity in the
residential sales market.
·
We continue to see strong pricing, achieving
average sales prices 2.6% ahead of valuations.
·
As our regulated tenancy portfolio reduces in
size, we would naturally expect to see volumes of sales reduce.
Last year, our portfolio reduced by c.14% (now £760m as at
September 2023 valuations), whilst our PRS portfolio grows
(£2.5bn).
·
As previously stated, we continue our elevated
asset recycling activity, selling tenanted properties, portfolios
and land to reinvest the capital into our build-to-rent pipeline
and new higher-yielding opportunities. We expect to deliver similar
proceeds from sales for the full year, including asset recycling,
compared to last year.
Strong earnings growth momentum continues
·
Two new build-to-rent schemes in Birmingham and
Bristol launching in March, totaling 606 homes.
·
The operational leverage inherent in our business
model ensures that we remain on track to
deliver significant growth in EPRA Earnings over the coming
years.
Outlook
The strong, compelling fundamentals
of the UK residential rental market continue to underpin our
investment case. Demand for renting, and our product specifically,
remains exceptionally high. We continue to achieve record levels of
rental growth, and should wage growth ameliorate later this year,
we expect rental growth to continue be higher than historic
averages, driven by our market-leading
operational platform. With local and national elections later this
year, we are comfortable that political and regulatory risk for our
business is low and that our responsible approach to delivering
high quality rental homes for the mid-market is very much aligned
to the main political parties' priorities.
-ENDS-
For
further information:
Grainger plc
Helen Gordon / Rob Hudson / Kurt
Mueller
London Office Tel: +44 (0) 20 7940
9500
Camarco (Financial PR
adviser)
Ginny Pulbrook / Geoffrey
Pelham-Lane
Tel: +44 (0) 20 3757
4992/4985