Grainger plans £360m raise for BTR expansion

FTSE 250 developer Grainger is planning a £216m placement to pursue new acquisitions. Grainger will issue 67.38m shares, representing 9.99% of the company’s issued share capital. With a further £144m in debt, Grainger intends to generate £360m for expansion. Proceeds will support £95m in acquisitions agreed, with a 259-home scheme in Derby and 283 homes at the Forge in Newcastle. Grainger said it also has two schemes valued at £202m in planning and legals, which are under offer and nearing exchange. These two sites in London and the South East will provide 580 homes, with pricing reflecting a blended average gross yield on cost of 5.5%. Some £226m in deals across four schemes in the regions would provide a further 925 homes, and a targeted gross yield on cost range of 6-7%. Grainger said the acquisitions would provide an additional £18m in net rental income, once assets were delivered and stabilised. With an existing portfolio of 9,109 BTR homes, Grainger claims to be the largest BTR provider in the UK. At the end of March its PRS assets were valued at £1.7bn, with a further 8,851 homes valued at £2.1bn in the pipeline. Of this, some £428m were in planning and legals, with £600m attributed to its joint venture with Transport for London. Chief executive Helen Gordon said: “The placing further cements Grainger’s first-mover advantage as the largest private rented sector homes provider. It will be earnings enhancing as the developments progress, will support our growth strategy and assist in our mission to build more quality rental homes throughout the UK.” To send feedback, e-mail emma.rosser@eg.co.uk or tweet @EmmaARosser or @EGPropertyNews Image © Grainger