Grainger not affected by Brexit as private rental demand remains strong

Residential landlord Grainger has so far escaped any affects of the European Union referendum, reporting that private rental sector demand remains strong.

In a trading statement for the 10 months to 31 July, the FTSE 250-listed company reported £91m of revenue came from sales of vacant properties, an increase from £81m last year, at an average 7.7% above the September 2015 year end vacant possession value.

The company said £188m worth of sales were in the pipeline.

Year to date rental growth on new lets were 4.9% and 2.8% on renewals. On newly acquired assets, rental growth increased over the past three months, July rent increases on new lets averaged 5.8% and the time taken to let the properties fell steadily over the last three months.

The company disposed of its £325m equity release business in May and sold the majority of the remaining £42m German portfolio in June.

It also restructured its business to reflect its focus on improving total returns for shareholders, and is on target to achieve promised 24% cost savings by 2017.

Chief executive Helen Gordon, said: "We have not seen any material impact on our business following the EU referendum, although we are monitoring the situation closely.

“With a strong balance sheet and low financial gearing, we are well positioned to take advantage of new potential private rented sector investment opportunities following the EU referendum. We remain confident in and committed to delivering our strategy to grow net rental income while simplifying the business to improve returns."

The company’s private rented sector investments have progressed at construction started on the £100m 614 home Clippers Quay project in Salford. The first two of seven private rented sector developments in partnership with the royal borough of Kensington and Chelsea at 21 Young Street, which will contain 53 homes, and Hortensia Road, 31 homes, are due to complete by May 2018 and February 2017 respectively.

Grainger’s first 'family style', £17m private rental sector development of 104 homes at Berewood, Waterlooville has started construction, while the company also bought 120 units at Kings Dock Mill, Liverpool for £14.5m.

Shares in Grainger were down 0.32% to 219.10p at 0952 BST.