Residential landlord Grainger plc has seen revenue growth and added more than 1,000 homes to its portfolio during the last year, new results show.
The Newcastle-based company has released a trading update for the year to the end of September in which it saw like-for-like PRS rental growth of 6.3%. That was a slower rate of growth than the previous 12 months, while its occupancy levels also fell slightly.
Grainger said that sales of non-core assets had generated £274m, which would be redeployed into growth plans and preserving its balance sheet.
Helen Gordon, chief executive of Grainger, said: “Grainger has delivered double digit rental income growth this year in line with expectations, with strong like-for-like rental growth at 6.3% and whilst we expect rental growth to ameliorate somewhat, we still expect levels to be above the long term historic average for FY25. This growth is supported by our rapidly growing portfolio, with over 1,100 homes added to our portfolio this year and a pipeline which will double our rental income when compared with FY23.
“Rental growth in FY25 will be underpinned by continuing high levels of wage growth throughout the Ƶ and particularly in our target customer demographics and geographical locations. Affordability remains healthy and customer satisfaction scores remain high, demonstrating the sustainability of our rental income growth going forward.
“The Ƶ rental market continues to experience rapidly accelerating growth in demand, whilst supply remains constrained. Our portfolio is ‘fully let’ with occupancy at 97.4% at the end of September. Our ongoing asset recycling programme supports our growth plans whilst preserving balance sheet strength. Over the year we’ve generated £274m of gross proceeds from disposals.”
Grainger said it had completed housing schemes in Cardiff, Bristol, Birmingham and London, as well as acquiring a development in Manchester. It highlighted a “favourable political environment” and welcomed the new Government’s proposals to reform the planning system and to raise standards in the rental market.
It said it was in a “strong position to deliver further growth, benefiting from our market-leading, scalable operating platform” and said internal systems would mean enhanced returns from any growth it saw.
Grainger has previously announced plans to become a Real Estate Investment Trust (REIT). It would gain that status when it is generating 75% of its profits from rental revenue rather than home sales, gaining a number of tax advantages. The switch is expected to take place next October.
