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RNS Number : 5391O
Grainger PLC
10 February 2021
10 February 2021
Grainger plc
("Grainger", the "Group", or the "Company")
TRADING UPDATE
Resilient performance continues
-- Like-for-like rental growth of +2.4%
-- 98% rent collection
-- PRS occupancy at 90%
-- Strong sales performance
Grainger plc, the UK's largest listed provider of private rental
homes, today provides an update on trading for the first four
months of its financial year to the end of January 2021, alongside
its AGM which is being held today. The Company will announce its
half year financial results on 13 May 2021.
Helen Gordon, Chief Executive, said:
"I am pleased to report that Grainger continues to perform well
despite the ongoing challenges posed by lockdown restrictions. Our
mid-market price point, coupled with our market-leading operational
platform, are proving invaluable during these testing times, with
rent collection at 98%. Our regional investment strategy has held
us in good stead. While we have seen a delay in the anticipated
recovery of occupancy in our PRS portfolio, particularly in London,
due to the new restrictions imposed since the Christmas period, we
are seeing strong levels of new enquiries among prospective PRS
customers, albeit with the majority of interest focused on move-in
dates in the Spring, pointing to a strong lettings market when
restrictions are lifted. Our PRS pipeline activity remains broadly
on track, and leasing of our scheme in Milton Keynes has gone well,
in line with underwriting. The for-sale housing market continues to
be buoyant. Our sales performance of ex-regulated tenancy
properties has been notably strong, with high volumes ahead of
valuations."
Resilient rental performance
Our market-leading operational platform continues to deliver
value:
-- Strong rental growth, with total like-for-like rental growth of +2.4%
o PRS like-for-like rental growth of +1.8%
o Regulated tenancy like-for-like rental growth of +4.2%
-- Rent collection on time remains high at 98%
-- Residential customers with rental payment plans in place
remains low at 42, representing less than 0.5% of our customer
base
-- Residential rent arrears remain low at 1.9%
-- Occupancy on our PRS portfolio remains at 90% in line with
levels at the end of FY20, with the anticipated recovery delayed
due to new lockdown restrictions
-- Our PRS portfolio represents c.75% of total net rental
income, and the regulated tenancy portfolio the remainder
Strong sales performance
-- Sales performance remains positive across all regions
-- We continue to have a strong forward-looking sales pipeline
which is on track to deliver a strong sales performance for the
year, with pricing ahead of valuations by between 1-2%
-- Regulated portfolio vacancy rate year to date remains stable at 7.3%
-- Asset recycling - sales of investment (tenanted) properties
have also continued to perform well
Progress on pipeline delivery
-- We have secured planning consent for our second scheme within
Connected Living London, our joint-venture with TfL:
o Montford Place - planning permission secured to deliver 139
homes and 2,700 sqm of light industrial workspace
-- We have completed on another forward-funding transaction,
which is now included within our secured pipeline and was announced
on 11 January 2021 - Millwright Places in Bristol was acquired for
GBP63m and will deliver 231 new homes and a targeted gross yield on
cost of c.6%
-- Enabling works have begun at the Guildford Station scheme,
where we recently agreed to forward-fund 98 PRS homes with Solum
Regeneration for GBP37m
-- Despite on-going social distancing measures on our
construction sites, our schemes scheduled to complete this
financial year are experiencing only marginal delays and we
continue to expect them to complete later this year, broadly in
line with previous guidance
-- We have launched our first homes at our newest scheme The
Filaments in Manchester (376 homes in total), with good levels of
interest and eight apartments pre-let
-- Solstice Apartments in Milton Keynes (139 homes) leased-up
well, in line with underwriting, and is now considered fully let
and stabilised
-- The investment market for build-to-rent and high quality PRS
is strong and we continue to pursue a number of exciting new
opportunities that will be accretive to returns, with over GBP500m
of opportunities either in the planning and legal stages or under
consideration
Credit ratings
-- Fitch Ratings have initiated coverage with an investment
grade rating for both our corporate and bond ratings (BBB- and BBB
respectively), supporting future funding activity, and S&P
recently affirmed their credit rating of BB+ for Grainger and BBB-
for Grainger's senior secured bond
Awards
-- Grainger secured three RESI Awards by Property Week during the period:
o Private Landlord of the Year
o Asset Manager of the Year
o PRS Deal of the Year for Connected Living London, JV between
TfL and Grainger
-ENDS-
For further information:
Grainger plc
Helen Gordon / Vanessa Simms / Kurt Mueller
London Office Tel: +44 (0) 20 7940 9500
Camarco (Financial PR adviser)
Ginny Pulbrook / Geoffrey Pelham-Lane
Tel: +44 (0) 20 3757 4992/4985
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