The º£½ÇÊÓƵ’s largest residential landlord has converted to become a Real Estate Investment Trust after a nine-year transformation project.
Newcastle-based Grainger plc said the switch to REIT status had been strongly backed by shareholders. It comes after a strategy to increase its build to rent business, which now has a portfolio of around 11,000 homes that is worth around £3.5bn.
To achieve REIT status - which comes with tax advantages - companies have to meet a number of conditions, with Grainger having to generate 75% of its profits from rental revenue rather than home sales. The company’s Accelerated Asset Recycling Programme has seen it dispose of around £1.8bn of low-yielding assets over the last 10 years and investing more than £2.9bn into around 10,000 build to rent homes.
Grainger said its approach had allowed it to continue growing and delivering its development pipeline in a way that supports long-term growth and enhances shareholder returns.
Chief executive Helen Gordon said: “Our successful conversion to REIT status marks a significant milestone in Grainger’s strategic transformation.
“Over the past nine years, we have fundamentally reshaped our business to become the º£½ÇÊÓƵ’s leading Build to Rent provider. This conversion enhances our ability to deliver sustainable returns to shareholders while continuing to provide high-quality rental homes for our customers.
“With our fully funded pipeline of 4,565 new homes valued at £1.3bn and our forecast of 50% EPRA earnings growth by FY29, Grainger is well-positioned for continued success as a REIT. We look forward to the opportunities this new status brings for our shareholders, customers, and the wider Build to Rent sector.â€
Grainger said demand for its properties remains strong, with occupancy levels above 96% and rental growth above the long-term average. It said it has a pipeline of more than 4,500 new homes and was forecasting 25% EPRA earnings growth by 2026 and 50% growth by 2029 when compared to 2024 levels.
The company will issue a trading update in early October following the close of its financial year end on September 30, and will reports its full-year financial results on November 20. It has recently announced new developments in Bristol, Oxford and London.
