Grainger plc has a £3.2bn operational portfolio of 9,669 rental homes and a £1.8bn Build to Rent pipeline of 6,838 homes. The company has reported record performance for its financial year to the end of September 2022.
Grainger reports four years of growth locked-in, funded and de-risked. With a total of 4,427 homes in its secured Build to Rent pipeline, the total investment value is £1,194m. Grainger has a secured and committed pipeline of 3,658 homes at an investment value of £953m, which represents £47m of additional net rental income over the next four years. The company also has the option to proceed with further projects which are secured but not yet committed to, which includes a further 769 homes, a £241m investment and £10m potential NRI.
Through the course of the year, rental growth continued to build month on month, achieving an average of 4.7% across the whole portfolio, 4.8% in its Private Rented Sector (‘PRS’) portfolio, and 4.6% in its regulated tenancy portfolio (FY21: 1.0% overall, PRS 0.3%, Regulated 3.6%). Overall, Grainger grew net rental income by 22% to £86.3m (FY21: £70.6m), and its proposed final dividend will be 3.89p per share, reflecting a total dividend of 5.97p per share (FY21: 5.15pps) – a 16% increase.
“I am pleased to report a very successful year for Grainger, in which we delivered record net rental income growth of 22%, driven by record occupancy, rental growth and lease up of our new schemes. Adjusted earnings for the year up 12%, EPRA NTA up 7% and dividend up 16%.
“Our £953m committed pipeline of 3,658 new build-to-rent homes is locked-in, fully-funded and de-risked with fixed construction costs, providing visibility on earnings growth for the next four years. On top of this we have the option to proceed with a further £241m of 769 homes in our secured pipeline and we have £599m in our planning and legal pipeline, comprising 2,411 homes. In total, our build-to-rent pipeline stands at £1.8bn and 6,838 new homes.
“We have a strong financial footing with a robust balance sheet. 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.
“Whilst we are mindful of the wider macro-economic environment, we are well positioned for the challenges ahead and 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.”
Helen Gordon, Chief Executive, Grainger
Grainger also invested in its enhanced Customer Experience Programme, which leverages its research, insight and data to inform how the company can continually improve its offering, delivering better customer experience and better value. All members of the team have undertaken a bespoke customer experience training programme.
Other initiatives include the roll out of MyGrainger, its customer experience app across the whole PRS portfolio, continual investment in its customer engagement programme to better understand what it means to deliver great customer service ‘The Grainger Way’, and a campaign to help customers ‘Live a Greener Life’ – which helps them to reduce their energy bills.
