Grainger’s profit doubles as resi values soar

Grainger’s profit has doubled as values for the residential sector soar. Full-year pretax profit for the UK’s largest listed residential landlord was £298.6m, up 96% from last year’s £152m. Chief executive Helen Gordon said it had been “a very successful year”, adding that she had “confidence for our continued strong operational performance”. Rental income increased by 22%, to £86.3m, driven by record occupancy of 98%, rental growth and new schemes coming into the portfolio. Grainger has raised its full-year dividend by 16% to 5.97p, with earnings per share up 92% to 30.9p. Total returns for the full year of 8.8% represented a valuation gain of £79m, a rise in annual rent to £70.6m, as well as £65m profit from sales. Gordon said Grainger’s pipeline ensured that the upward trend would continue. Grainger has a committed pipeline of 3,658 build-to-rent homes to add to its £3.2bn operational portfolio of 9,669 homes. That is “locked-in, fully-funded and de-risked with fixed construction costs, providing visibility on earnings growth for the next four years”, Gordon said. In addition, Grainger has the option to proceed with a secured pipeline of 769 homes, worth £241m, as well as a further 2,411 homes in its planning and legal pipeline, worth £599m. “In total, our build-to-rent pipeline stands at £1.8bn and 6,838 new homes,” Gordon said. “While we are mindful of the wider macroeconomic environment, we are well positioned for the challenges ahead,” she added. “Our market benefits from positive long-term structural trends. Demand for renting continues to grow, supply remains constrained as many small landlords exit the rental market, and we benefit from a resilient customer base. The inflation-linked characteristics of our asset class, coupled with our high-quality, energy-efficient and well-located properties, scalable operating platform and unrivalled data, insight and analytics gives us confidence for our continued strong operational performance.” Debt increased over the year to £1.26bn, taking LTV from 30.4% to 33.4%. However, Gordon said: “Our debt is 97% hedged with average debt maturities of six-and-a-half years and we have no significant refinancing requirements until 2027. “All of this puts Grainger in a position of strength to take advantage of the increasing demand for renting homes in the UK.” To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Photo courtesy of Camarco