Rental income drops at Grainger
Build-to-rent investor Grainger has reported a net rental income dip of 6% as a result of asset disposals, alongside development delays and lower occupancy at stabilised schemes.
Whilst Grainger reported a 1.7% uplift in like-for-like rents, overall income dropped due to a surge in sales amid heightened investor interest in the asset class.
It collected £34.7m in the six months to the end of March, against £37m a year earlier.
Build-to-rent investor Grainger has reported a net rental income dip of 6% as a result of asset disposals, alongside development delays and lower occupancy at stabilised schemes.
Whilst Grainger reported a 1.7% uplift in like-for-like rents, overall income dropped due to a surge in sales amid heightened investor interest in the asset class.
It collected £34.7m in the six months to the end of March, against £37m a year earlier.
The investor said that Covid-19 had pushed occupancy down to 89%, but it had retained high levels of rent collection, with 98% paid.
Grainger has 9,109 operational rental homes and a pipeline of 8,851 in development, valued at £2.1bn. It reported NAV steady at 286p per share.
During the period, like-for-like rents rose 1% in the BTR portfolio, with a 4% across its regulated tenancies. Grainger said this reflected the focus on customer retention, with rental growth in all regions and a marginally stronger performance outside London.
It secured 1,086 new lettings and 1,244 renewals during the period, representing £12m and £15m in gross rent, respectively. There were 4,974 prospective customer enquiries. Since the start of the year, the listed landlord has also seen an 86% rise in lettings enquiries.
Grainger expects a further 1,021 homes to be completed this year, with 508 in H1 and 513 in H2, adding £12m of rental income, once stabilised.
Grainger has a £1bn secured pipeline of 4,293 homes, representing £52m in net rental income.
This includes the £37.4m purchase of a 259-flat scheme (pictured) on the site of a former Debenhams in Derby.
EG reported that Grainger was in advanced talks to forward fund the scheme from developer St James Securities in January.
It is Grainger’s first scheme in Derby as it seeks to create a Midlands hub, with a second site in Queen’s Road, Nottingham. Construction is due to commence in the coming weeks, with a targeted completion of H2 2023. The investor has forecast a gross yield of 7%, once stabilised.
Chief executive Helen Gordon said: “It has been a period of intense operational activity, supporting our customers in their homes.
“There is positive market evidence… which suggests a strong lettings market to come as we enter the peak summer period and all remaining lockdown restrictions are lifted. This provides us with increasing confidence for an improved performance for the second half of the year subject to the UK economy reopening.”
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Image from St James Securities
