16 May 2024
A platform
delivering
compounding
growth
Half Year Financial Results
to the end of March 2024
Change
photo
Originate Invest Operate
Agenda
2
Grainger plc | www.graingerplc.co.uk
1.
Highlights
Helen Gordon
Chief Executive
2.
Financial results
Rob Hudson
Chief Financial Officer
3.
Market and business update
Helen Gordon
Chief Executive
4.
Summary and Q&A
Helen Gordon
Chief Executive
5.
Appendix
Originate Invest Operate
3
A platform delivering compounding
growth
Grainger plc | www.graingerplc.co.uk
Strong
operational
performance
Compounding
growth
Strong L4L PRS rental growth
8.1%
High occupancy
97.7%
High retention
62.9%
Strong disposals
£71m
NRI growth (HY24)
+11%
Near term earnings growth
EPRA Earnings FY26
£55m
NRI growth from
committed
pipeline
and remaining lease
up
£41m
EBITDA margin
improvement over next 5yrs
53% to
60%
Resilience
Operating cashflows pa
c.
£200m
Stable underlying values*
(0.3)%
Fixed debt costs over 5yrs
Mid 3%
Highly liquid market
Transactions in 2023/24
c.£260bn
* Pre-MDR impact
Originate Invest Operate
Operational excellence delivering
double digit rental growth
Stable underlying values
Strong occupational market
continues
Customer affordability remains
healthy at 28%
Lease up of new assets continues to
outperform underwriting in rents and
velocity
Accelerated disposal programme
delivering strong sales proceeds of £71m
Strong balance sheet, debt costs fixed
for 5 years, no material refinancing
required until 2028
On track for REIT conversion by Oct ’25
(FY26)
Excellent performance
4
Grainger plc | www.graingerplc.co.uk
Adjusted earnings
£44.4m
(6)%
EPRA NTA a
294pps
(4)%
(8)p due to tax
change*
Highlights:
Net rental income
+11%
£53.2m
Rental growth
+8.1%
(L4L, PRS)
Dividend a
+11%
2.54pps
PRS 80%
of portfolio
* Change in tax treatment (removal of multiple dwellings relief (MDR)) impacts EPRA NTA by (8)p per share
Originate Invest Operate
A substantial pipeline of growth
5
Grainger plc | www.graingerplc.co.uk
OPERATIONAL PORTFOLIO
*
11,153 homes, £3.4bn
PRS (BTR) PIPELINE
5,068 homes, £1.5bn
c.1,000 homes delivering in FY24
▪ The Copper Works, Cardiff (307 homes)
▪ Millwrights Place, Bristol (231 homes)
▪ The Silver Yard, Birmingham (375 homes)
▪ Windlass Apartments Ph.2, London (65 homes)
*Assets under management as at HY24
** PRS portfolio comprises build-to-rent (BTR) assets and other market rented assets
^ Includes Grainger’s unlevered 51% share of the 4 TFL sites with full planning consent
^^ Includes Grainger’s unlevered 51% share of 1 further TFL site
£730m
Regulated
Tenancies
1,678 homes
PRS portfolio now 80% by value
FY23 launches leasing well
▪ Lease up ahead of plan and ahead of ERV
▪ 3 assets stabilised in the period
o The Mint, Guildford (98 homes)
o The Condor, Derby (259 homes)
o Nautilus Apts, Fortunes Dock, London (146 homes)
£423m
Planning/
Legals^^
1,513 homes
£541m
Secured^
2,009 homes
EPRA earnings growth accelerating as pipeline converts
£523m
Committed
1,546 homes
£2,674m
PRS Portfolio**
9,475 homes
Originate Invest Operate
Acquired substantial pipeline in target
locations
Established partnerships with significant
growth potential (e.g. TFL & Network Rail)
Maturing market presenting exciting
acquisition opportunities
Long tail of sub scale BTR investors
6
Strong track record of transacting
successfully, delivering growth
Grainger plc | www.graingerplc.co.uk
£1.7bn
of disposals
since 2016
£2.5bn
of new
investment
since 2016
Successful disposals to reposition portfolio
UK residential market is highly liquid, with
typically over 1m housing transactions pa**
Strong and diverse investor base, providing
strong liquidity and valuation support
Minimal concentration risk with small asset
sizes
Proven liquidity, low volatility and pricing
resilience
* FY15 **Per annum; Source: HMRC 2005/6 to 2022./23
PRS 80%
of portfolio
PRS 23%
of portfolio*
Originate Invest Operate
8yr CAGR +18%
Delivering for shareholders Compounding growth
7
Grainger’s growth strategy
continues to deliver
Grainger plc | www.graingerplc.co.uk
▪ Substantial pipeline
▪ An efficient platform able to
accommodate significant growth
▪ Maturing market presents exciting
growth opportunities
▪ Strong track record of transacting
successfully, supporting growth
▪ Positive rental growth outlook
▪ Strong, continuing rental growth
▪ Progressive dividend underpinned by
income growth
▪ EPRA Earnings set to grow materially to
£55m by FY26
▪ REIT conversion Oct ’25, enhancing
returns further
▪ Increased resilience and efficiency with
scale
▪ Sustainable 8% Total
Accounting Return
Net rental income
8yr CAGR +13%
Dividend
Originate Invest Operate
8
A compelling investment case
Grainger plc | www.graingerplc.co.uk
Market leadership, largest portfolio and
pipeline and clear path to greater scale
Compounding EPRA Earnings growth
Balance sheet strength and locked in, low cost
of debt
Best-in-class Operating Platform, powered by
our CONNECT technology
Visibility on strong sustainable rental growth
Fragmented but maturing BTR market
provides exciting opportunities to fuel growth
The Barnum, Nottingham
Rob Hudson
Chief Financial Officer
2. HY24 Financial
Results
Copper Works, Cardiff
Originate Invest Operate
Financial highlights
10
Like-for-like rental growth accelerates to 8.0%
Grainger plc | www.graingerplc.co.uk
Income
HY23
HY24
Change
Rental growth
(like-for-like)
6.8%
8.0%
+122 bps
Net rental income
£48.0m
£53.2m
+11%
Adjusted
earnings
£47.1m
£44.4m
(6)%
EPRA earnings
£21.9m
£24.5m
+12%
IFRS profit/(loss)
before tax
£5.7m
£(31.2)m
(647)%
Dividend per share
2.28p
2.54p
+11%
Capital
HY23
HY24
Change
Total Property Return
0.1%
(0.4)%
(48) bps
Total Accounting Return
(1.6)%
(2.9)%
(130) bps
FY23
HY24
Change
EPRA NTA per share
305p
294p
(4)%
Net debt
£1,416m
£1,497m
+6%
Group LTV
36.8%
39.1%
+223 bps
Cost of debt
(average)
3.3%
3.1%
(14) bps
Income performance
Excellent operational performance driven by
our platform and demand for our product
Net rent up +11% due to lease up of new
launches, LfL Rental Growth of 8.0%,
andstrong occupancy at 97.7%
EPRA earnings up +12%
Adjusted earnings down 6% reflecting lower
sales profits from a smaller regs portfolio
Dividend per share up +11%
reflecting strong
performance and outlook
Capital Performance
Resilient underlying valuationperformance
of (0.3)%, strong ERV growth of 3.7% largely
offsetting c.15-25 bps outward yield shift
IFRS loss at £31m, and EPRA NTA at 294p
down 4%, reflecting MDR impact of £59m
LTV 39.1%, and cost of debt at 3.1%
Originate Invest Operate
Income statement
11
Excellent operational performance drives NRI growth
Grainger plc | www.graingerplc.co.uk
HY23
HY24
Change
Net rental income
£48.0m
£53.2m
+11%
Profit from sales
£25.2m
£19.9m
(21)%
Mortgage
income (CHARM)
£2.4m
£2.3m
(4)%
Management fees
£2.8m
£3.5m
+25%
Overheads
£(15.4)m
£(16.2)m
+5%
Pre
-contract costs
£(0.7)m
£(0.7)m
-
Net finance costs
£(15.2)m
£(17.7)m
+16%
Joint ventures
-
£0.1m
-
Adjusted earnings
£47.1m
£44.4m
(6)%
Adjusted EPS (diluted, after tax)
1
4.9p
4.5p
(8)%
Underlying valuation
movements
£(41.4)m
£(16.8)m
(59)%
MDR valuation movement
-
£(58.8)m
-
IFRS profit/(loss) before tax
£5.7m
£(31.2)m
(647)%
Earnings per share
(diluted, after tax)
0.6p
(3.0)p
(600)%
EPRA Earnings
£21.9m
£24.5m
+12%
Key highlights:
Strong occupancy and rental growth
momentum
Strong occupancy continues at 97.7%
Like-for-like rental growth: 8.0% (FY23: 7.7%)
PRS: 8.1% (FY23: 8.0%)
New lets: 7.7% (FY23: 9.2%)
Renewals: 8.3% (FY23: 7.2%)
Regs: 7.1% (FY23: 5.9%)
Stabilised gross to net improved to 25.3% (FY23: 25.5%)
Sales performance
Accelerated disposal programme delivering strong
sales proceeds of £71m
Pricing remains robust with sales in period within
0.2% of valuations reflecting continuing demand
Residential sales profits lower reflecting the
continued divestment of our regulated tenancy
portfolio
6.8% annualised reversion rate
2
in our regulated
tenancy portfolio
1
Adjusted earnings per share includes tax of £11.2m (2023: £10.4m) in line with Corporation Tax of 25% (FY23: 22%)
2
Reversion rate, previously described as the vacancy rate, is the rate at which regulated tenancies are vacated and revert to Grainger for sale
Originate Invest Operate
£48.0m
Net rental income
12
Grainger plc | www.graingerplc.co.uk
£(1.4)m
+£3.2m
Rental growth
and occupancy
PRS
investment
DisposalsHY23 Net
Rental Income
£53.2m
Total L4L
+8.0%
PRS L4L
+8.1%
- New lets +7.7%
- Renewals +8.3%
Regs L4L
+7.1%
Strong operational performance driven by lease up of new
openings and 8.0% LfL rental growth
HY24 Net
Rental Income
PRS investment delivering £3m of net rent in HY24 as new schemes lease up
Strong lettings performance continues, with LfL growth accelerating in HY24 to 8.0%
Regional variations minimal
H2 net rents to be slightly higher than H1
+£3.4m
+11%
+£5.2m
Originate Invest Operate
Valuation Summary
13
Grainger plc | www.graingerplc.co.uk
Portfolio Homes
Capital
Value
Total Valuation
movement
(pre-MDR)
Total Valuation
movement
(post-MDR)
£m £m % £m %
PRS Portfolio
London & SE
3,780
1,285
(26)
(2.0)%
(40)
(3.1)%
Regions
5,541
1,316
10
0.8%
(23)
(1.7)%
PRS Total
9,321
2,601
(16)
(0.6)%
(63)
(2.4)%
Regs Portfolio
London & SE
885
565
4
0.8%
4
0.8%
Regions
447
101
1
0.8%
1
0.8%
Regs Total
1,332
666
5
0.8%
5
0.8%
Operational Portfolio
10,653
3,267
(11)
(0.3)%
(58)
(1.7)%
Development
Development
407
(0)
(0.1)%
(12)
(3.0)%
Total Portfolio*
10,653
3,674
(11)
(0.3)%
(70)
(1.9)%
PRS grown to 80% of the total
operational portfolio, from 23%
in FY15
Resilient PRS valuations driven
by:
ERV growth of 3.7% with
London 3.3% and the
Regions 4.0%
Offset by yield expansion
c.25bps in London
c.15bps in the
Regions
One off MDR Impact of
£59m
Regs portfolio also proved
resilient with London and the
regions both up 0.8%
Development portfolio mirrors
PRS with ERV growth of 4.8%
broadly offsetting yield
movement
* Excluding CHARM and Vesta
Resilient underlying valuation performance down 0.3%
despite wider macro uncertainty
MDR impact
c.£59m
Originate Invest Operate
EPRA Net Asset Values
14
EPRA NTA resilient
Grainger plc | www.graingerplc.co.uk
£m pence per share
Property assets (market value)
3,829
515
Net liabilities
(1,559)
(209)
EPRA Net Reinstatement Value (NRV)
2,270
306
Tax
– deferred & contingent – trading assets
(86)
(12)
Exclude: Intangible assets
(1)
-
EPRA Net Tangible Assets (NTA)
2,183
294
Add back: Intangible assets
1
-
Tax
– deferred & contingent – investment assets
(87)
(12)
Mark to market fixed rate debt and derivatives
108
15
EPRA Net Disposal Value (NDV)
2,205
297
(5)pps impact
on NTA
277p
EPRA Net Tangible
Assets (NTA)
294pps
-4%
(8)p impact due to tax
change*
Reversionary surplus,
not included in NTA
24pps
£177m
Additional value not
included in EPRA
NTA
- Technology
investment
- Platform value
- Secured pipeline
* Change in tax treatment (removal of multiple dwellings relief (MDR)) impacts EPRA NTA by (8)p per share
Mark to market of
fixed rate debt worth
£108m, not included
in NTA
15pps
HY24
Originate Invest Operate
EPRA Net Tangible Assets (NTA)
15
Grainger plc | www.graingerplc.co.uk
Increasing net rent and resilient valuation
results in NTA of 294p
+X%
(2)p
Total -0.3%
PRS -0.6%
Regs +0.8%
Dev -0.1%
+8p
305p
(8)p
(1)p
(4)p
294p
-4%
Post-MDR
(2)p
(2)p
302p
-1%
Pre-MDR
FY23
EPRA NTA
Net rents,
fees & income
Overheads
Finance costs
Valuation Tax & other Dividends HY24
EPRA NTA*
MDR HY24
EPRA NTA
* Pre-MDR
Originate Invest Operate
Net debt
16
Grainger plc | www.graingerplc.co.uk
Operating cashflow
£84m
Significant investment in pipeline delivery, with accelerated
disposals in line with plan
£1,416m
£(82)m
+£42m
+£25m
+£11m
£1,497m
£(69)m
^
+£122m
* Includes £6m of other income (management fees and CHARM)
^ £71m disposal proceeds net of sales fees of £2m
+£32m
Net debt increased to £1.5bn during HY24, reflecting investment in strong delivery of the PRS pipeline in line with plan
Operating cashflow increased to +£84m, highlighting strong cash generation
Continuing strong disposals
HY24 investment of £122m reflecting strong delivery of PRS pipeline
Net debt expected to be broadly flat in the second half
Investment to be funded from operational cashflows going forward
FY23
Net debt
Gross rents &
other income*
GtN and
overheads
Finance
costs
Disposals Investment Tax & other Dividend HY24
Net debt
Originate Invest Operate
Strong, secured and de-risked
balance sheet
17
^ Facility maturity including extension options
Grainger plc | www.graingerplc.co.uk
HY24
Net debt
£1,497m
Loan to value
39.1%
Cost of debt
(average)
3.1%
Headroom
£433m
Weighted average facility maturity
^
5.0 years
Interest rate hedging
100%
Strong liquidity
Fully funded committed
capex programme
£433m of headroom
Future capex commitments
of £225m largely phased over
next 3 years
No material
refinancing
requirement until
2028
£300m of facilities successfully
extended
Cost of debt fixed in
mid 3% for c.5 years
100% hedged with a hedge
maturity of c.5 years
Strong operational
cashflow
Track record of strong
operational inflows, c.£200m
per annum
No material refinancing requirement until 2028
0
500
1000
1500
2024 2025 2026 2027 2028 2029 2030 2031 2032
Term Loan RCF Institutional Term Debt Public Bond
Originate Invest Operate
Committed pipeline
£523m
Planning / Legals
£423m
Secured **
£541m
Committed pipeline fully funded and driving
further NRI growth
Optionality over the remaining projects
c.1.5x growth in NRI from delivery of
committed pipeline
Strong operating leverage from committed
pipeline significantly grows the income return
and CONNECT platform efficiencies drive
further margin improvement
Passing net rent and earnings progression
18
*Passing net rent is the annualised rent roll of units let at the reported date
**Includes our unlevered 51% share of the four secured TFL partnership projects
Excludes rental growth from operational portfolio and disposals & asset recycling
^
H2 FY24 net rent includes £6m from FY23 and FY24 completions that are now operational
assets; FY25 net rent includes £8m from FY23 and FY24 completions that are now
operational assets
^^ Includes our unlevered 51% share of one TFL partnership project
Grainger plc | www.graingerplc.co.uk
Transformative growth in NRI and earnings
£188m
+£9m
£147m
+£18m^^
+£9m
+£8m
^
+2.0x
£170m
+£15m
^
£106m
FY23
reported
£182m
FY23
reported
£167m
FY23
reported
£144m
+1.5x
£96m
+£23m
FY23
Reported NRI
HY24 Passing
NRI*
H2 FY24 FY25 FY26 FY27+
Committed
NRI
Secured
but not
committed
Secured NRI
Planning/
Legals
Secured NRI
Originate Invest Operate
Growth & scale to enhance earnings
19
Grainger plc | www.graingerplc.co.uk
Grow rents
Simplify & Focus
Build on our
experience
1
2
3
4
£55m
Upgraded near term
FY26 EPRA Earnings
53% to over 60%
EBITDA margin
as pipeline delivers
over next 5 years
£41m
Additional net rent from
committed pipeline
An efficient platform able to accommodate significant growth
8%
Sustainable Total
Accounting Return
Pro-forma, targeted, post delivery of secured pipeline
Excludes yield movement and further pipeline additions
Delivering exceptional homes into a strong rental market
Originate Invest Operate
REIT conversion
20
Remain on target for October 2025 conversion (FY26)
Grainger plc | www.graingerplc.co.uk
Rationale for REIT conversion
▪ Corporation tax saving
▪ Enhances returns by c.50bps p.a.
▪ No conversion charge & minimal
cost associated with conversion
Implications of REIT
▪ No corporation tax on
PRS/BTR business
▪ Requirement to distribute 90% of
property income profit each year
▪ Quantum of dividend in line with
current policy
Summary
▪ Enhances returns
▪ No change to strategy
▪ Continued ability to sell regulated
tenancies
▪ Ability to continue developing BTR
assets
▪ No change to progressive dividend
Conversion criteria
▪ Balance of business tests,
75% of profits and assets from the
property rental business (PRS/BTR)
▪ Increase in capital allowances
reducing current tax prior to
conversion
Originate Invest Operate
ESG reporting and targeting
21
Grainger plc | www.graingerplc.co.uk
Enhanced measurement and targeting
Net Zero Pathway expanded to include Scope 3
emissions
Following completion of Scope 3 baseline,
working towards setting a Science Based Target
(SBTi) aligned emissions reduction target
Portfolio transition continues
Refurbishment programme continues to deliver
emissions efficiency improvements
Award winning 'Living a Greener Life'
programme influencing customer behaviour
Embodied carbon assessment completed on all
direct development pipeline schemes
Data-driven approach to ESG
Awards and benchmarks
FTSE4Good Since 2010
EPRA – Sustainability
Best Practice Reporting
Gold Award
EPRA Societal Awards
Outstanding
Contribution
to Society
CDP ‘B’ Rating
MSCI ESG ‘AA’ Rating
ISS-oekom ‘Prime’ Rating
GRESB Public Disclosure ‘A’ rating
Sustainalytics Low risk
S&P Corporate
Sustainability Assessment
92%
Workforce Disclosure
Initiative
86%
93%
PRS portfolio
with EPC
ratings A-C
Originate Invest Operate
22
Financial summary
Grainger plc | www.graingerplc.co.uk
Continued compounding growth
Net rental growth of +11% driven by lease up of new
schemes and continued strong rental growth
Dividend per share up +11% reflecting the strong
performance of the business
Strong balance sheet, fully funded pipeline and fixed,
low cost of debt gives strength to capital structure, with
flexibility over disposals
EPRA Earnings up +12% demonstrating
the operational leverage in our business model
Transformative growth trajectory in net rental income
and EPRA earnings with upgraded guidance of £55m for
FY26 EPRA earnings
Sustainable total return target of 8% which remains
unchanged
The Mint, Guildford
3. Market and
business
update
Helen Gordon
Chief Executive
Originate Invest Operate
An ongoing structural undersupply of
housing
24
UK has a fundamental lack of housing space
Falling permissions point to declines in future supply
Exciting opportunity to grow market share
Grainger plc | www.graingerplc.co.uk
Sources: Knight Frank, ONS
No. of housing units granted planning permission, England, annual
Source: Department for Levelling Up, Housing and Communities
Build-to-rent units as a proportion of the 5.7m UK PRS households
Sources: Resolution Foundation, James Gleeson – Greater London Authority
*England - 2018, Japan - 2018, France – 2020, Germany - 2017, US - 2015
Residential floorspace, sqm per person, various dates*
1.9%
BTR institutional
landlords
38
40
43
46
66
0
10
20
30
40
50
60
70
England Japan France Germany US
200
220
240
260
280
300
320
340
2016 2017 2018 2019 2020 2021 2022 2023
Thousands
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Council tax net increase Building control completions
New dwelling EPCs England housing target
Government’s housing target has never been met
Indicators of new supply, England
Source: Department for Levelling Up, Housing & Communities
Originate Invest Operate
28
30
32
34
36
38
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
%
1%
25%
35%
19%
13%
4%
3%
15-19 20-24 25-29 30-34 35-44 45-54 55+
Focused on customer affordability
25
Grainger focused on young professional demographic
Our homes are more energy efficient than the market Our customers have affordable energy bills
Our customer affordability remains healthy
Grainger plc | www.graingerplc.co.uk
Proportion of residents by age in Grainger’s PRS portfolio
Source: Grainger plc
Proportion of household income spent on rent (%), England
Source: English Housing Survey 2022/23, Grainger plc
89%
Source: Energy & Climate Intelligence Unit, Grainger plc
Annual energy bill from April 2024 by EPC band
28%
Grainger*
Source: English Housing Survey, 2022/23
*Grainger plc. BTR and PRS only, analysis based on earning households only, guarantor income excluded
93% of
Grainger
PRS homes
Private-rented dwellings by Energy Efficiency Rating Band, 2022,
England
0
10
20
30
40
50
A/B C D E F G
%
93%
of Grainger
PRS homes
<50%
of market
Originate Invest Operate
£0
£500
£1,000
£1,500
£2,000
Apr-15
Aug-15
Dec-15
Apr-16
Aug-16
Dec-16
Apr-17
Aug-17
Dec-17
Apr-18
Aug-18
Dec-18
Apr-19
Aug-19
Dec-19
Apr-20
Aug-20
Dec-20
Apr-21
Aug-21
Dec-21
Apr-22
Aug-22
Dec-22
Apr-23
Aug-23
Dec-23
Apr-24
Mortgage Cost Homeowner maintenance Homelet UK Rent
Our growth opportunity is underpinned
by strong underlying fundamentals
26
Substantial undersupply
Renting for longer as buying a home remains challenging
Long tail of investors/developers with very few units
Grainger plc | www.graingerplc.co.uk
Zoopla rental demand and supply* vs the five-year average
Cumulative increase in number of PRS households
Average mortgage payment* & maintenance** vs average rent (UK)
Source: Bank of England, Homelet, Nationwide; Grainger
*Based on 25-year repayment mortgage, 2-year initial fixed rate, 90% LTV, on average house price
**Estimated at 1% of capital value per annum
89%
Source: BPF/Savills
No. of BTR/SFR units by investor – completed/construction/planning
Source: Zoopla
*4 weeks to 14 April 2024 compared to the same period between 2019 and 2023
0
2
4
6
8
10
12
14
Units (000s)
525 homes
Avg portfolio size
Source: Savills Research using English Housing Survey
-100
400
900
1,400
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Thousands
all 16-24 all 25-34 all 35-44 all 45-54 all 55-64 all 65 or over
20% growth in rental demand predicted
Cost of home-ownership excludes
depreciation, building insurance and
opportunity cost of equity of 10% deposit
+1m
15%
-16%
-3%
Rental demand Stock of homes for
rent
Flow of new supply
Private Rent: £1,294 pcm
Cost to own: £1,663 pcm
Originate Invest Operate
27
Supportive political landscape
Both main parties want to stimulate housing supply of all tenures
Grainger plc | www.graingerplc.co.uk
“I don’t think under Keir’s
leadership, rent control has
ever been our policy.”
Labour Opposition
Shadow Chancellor, Rachel Reeves, July 2023
“A rent freeze…, has the
effect…of reducing the supply of
rented homes.…”
Conservative Government
Secretary of State, Michael Gove, March 2023
“Rent controls are not Labour
party policy as we remain mindful of
the risk they could pose to the availability
of rental properties and the harmful
impacts any reduction in supply would
have on renters.”
Labour spokesperson, The Guardian, May 2024
“Whether it be private rented
sector, the social rented sector
or homes to buy, we need to
increase the supply of homes.”
Secretary of State, Michael Gove
May 2024, BBC Radio 4
Originate Invest Operate
28
UK’s leading residential platform
Grainger plc | www.graingerplc.co.uk
Continually improving our platform for growth
Greater Scale Drives Further Value
A Key Barrier to Entry and Source of Competitive Advantage
Greater efficiencies
reducing operating
costs
Continually
improving leasing
performance and
customer experience
Leasing
Clustering
benefits
Economies of scale
Reduced operational
costs
Enhanced customer
experience
Brand benefits
Greater buying
power
National furniture
contract
New Repairs &
Maintenance
Supplier
Enhanced customer
offer
Asset hierarchy
evaluation
Asset recycling
Asset repositioning
Asset enhancement
and upgrades
Asset
Management
Originate Invest Operate
Harnessing Data & AI
29
Market leading platform drives data and AI opportunities
Grainger plc | www.graingerplc.co.uk
Supply chain
Procurement
Leasing
Net Zero Carbon
Case study
Using our Data and AI,
we can now predict
with a high degree of
accuracy if a customer
is likely to renew a lease
with us
Case study
Low Carbon
Technologies pilot
being developed
✓ Analysing performance
✓ New technologies
✓ Modelling potential
solutions
✓ Ensuring delivery to a
high standard
✓ Improving customer
experience
✓ Driving best performance
Case study
Rolling out digital live-
booking of repairs and
maintenance
appointments for our
customers
Case study
Service improvement
and cost efficiency
through new Repairs &
Maintenance contract
✓ Delivering best value
through spend analysis
✓ Greater performance
insight
✓ Predictive modelling
✓ Targeting
✓ Directing resources
✓ Process improvements
Natural Language Processing | Generative AI | Predictive Modelling
Originate Invest Operate
Disciplined, research-led investment
decisions
30
Targeting top ranking cities
Analysed 58 cities
Underpinned by 22 economic
and demographic datasets
Detailed demographic and
rental market analysis
Grainger plc | www.graingerplc.co.uk
Analysed 329 local authorities
Ranked on six success factors
Schemes secured Target locations Under review Not under consideration*
Investment
decisions
In-house
knowledge and
expertise
Macro-economic
analysis
Proprietary
operational data
and insight
Bottom-up micro-
economic GIS analysis
Cities Strategy
▪ Rigorous analysis of key investment fundamentals
▪ Annual review of investability
▪ City Champions driving local knowledge and insight
▪ Strong track record of sourcing across the country
▪ Robust underwriting and appraisal
*Scottish cities excluded from the analysis owing to data availability and our
strategic decision to not invest in Scotland at present due to rent controls.
High demand / supply
fundamentals and low
growth potential
Low demand / supply
fundamentals and
high growth potential
High demand / supply
fundamentals and
high growth potential
Low demand / supply
fundamentals and low
growth potential
London
Bristol
Oxford
Manchester
Leeds
Cardiff
Southampton
Exeter
Birmingham
Newcastle
Milton
Keynes
Nottingham
Sheffield
Derby
Demand/Supply Fundamentals
Growth Potential
Originate Invest Operate
Multiple routes for future growth
31
Grainger has the ability to secure investment opportunities from a
variety of sources and timeframes to delivery
Grainger plc | www.graingerplc.co.uk
Short term
Immediate from acquisition
Medium term
c.24+ months
Longer term
c.36+ months
The Forge
Newcastle
c.£3.0m NRI
283 homes
Income Day 1
Tenanted Acquisition
Corporate / Portfolio
Forward Funded
Land Acquisition & Direct Development
Public Sector Partnerships
JVs / Partnerships
Timing of income
Millwrights Place
Bristol Cluster
c. £3.3m NRI
231 homes
De-risked with
control over design
Network Rail
Forward Fund
Partnership
Multiple sites within
our regional clusters
c.2,000 homes target
TFL
JV Income-share
5 sites
London Cluster
c.3,000 homes target
c.1,240 homes to
date
Asset repositioning
Examples
Originate Invest Operate
SOUTH EAST
Incl. Milton Keynes
2,372
Operational
1,949
Pipeline
Weavers Yard, Newbury
94
West Way
Sq, Oxford
150
Guildford Stage 2
179
32
Cluster Strategy driving performance
NORTH WEST
Manchester & Liverpool
1,742
Operational
1,742
373
SOUTH WEST
& WALES
Bristol & Cardiff
2,154
Operational
1,051
Pipeline
Redcliff Quarter, Bristol
468
Exmouth Junction, Exeter
230
John Street, Cardiff
405
307
YORKSHIRE
Leeds & Sheffield
1,043
Operational
1,043
LONDON
4,805
Operational
2,392
Pipeline
Windlass Apartments Ph.2
65
Canning Town 3,
Seraphina
132
Merrick Place, Southall
401
Besson Street
324
TfL Partnership
1,240
Waterloo
215
Grainger plc | www.graingerplc.co.uk
NORTH EAST
Newcastle
381
Operational
381
MIDLANDS
Birmingham, Derby,
Nottingham
1,148
Operational
1,148
Operational efficiencies improving further with gross to net down to 25.3%
Originate Invest Operate
Forward Fund
231 homes
Launching imminently
NRI: c.£3.3m
Bristol cluster
The Silver Yard, Exchange Square, Birmingham
Forward Fund
375 homes
Launching imminently
NRI: c.£4.7m
Birmingham cluster
2024 Launches
33
The Copper Works, Cardiff
Windlass Apartments Ph.2, Tottenham Hale, London
Grainger plc | www.graingerplc.co.uk
Forward Fund
307 homes
Launched Feb’24
NRI: c.£3.5m
Cardiff cluster
Forward Commit
65 homes
Launching H2 ‘24
NRI c.£1.3m
London cluster
Millwrights Place, Bristol
Delivering c.1,000 new homes this year
Originate Invest Operate
34
Renting Homes, Enriching Lives
Grainger plc | www.graingerplc.co.uk
People at
the heart
Exceeding
expectations
Leading
the way
Every home
matters
Strong female representation
Materially reducing Gender Pay Gap
Good progress toward National
Equality Standard
Top performance in Workforce
Disclosure Initiative
50 Mentorship participants
Investing in local
communities
Providing homes to a
wide range of renters
Welcoming everyone
25+ Community & Charity Partners
320+ Community and resident events
6 Ukrainian Refugee Families housed
3 homes earmarked for Young People
at risk of homelessness
Supported St Basil's Live and Work
Village in Birmingham via LandAid
Median salary £35k vs £35k UK avg
70% of our properties are affordable to
those on a median salary*
18% employed in Education or
Healthcare
55% between 26-40 years old
Pet friendly renting
*Assumes two earners on a median salary, renting a property for £1,500 per month, which would give
an affordability ratio of 26%. 70% of Grainger properties are below £1,500 a month.
Originate Invest Operate
A compelling investment case
35
Grainger plc | www.graingerplc.co.uk
Compounding growth in earnings and dividend
Strong balance sheet and ability to asset recycle
Strong sustainable rental growth
Healthy customer affordability levels
Strong market fundamentals
Low risk regulatory landscape
Market leader with the largest portfolio and largest pipeline
Exciting market opportunity
1
2
3
4
5
6
7
8
Q&A
Thank you
Copper Works, Cardiff
Originate Invest Operate
37
Grainger plc | www.graingerplc.co.uk
Appendix
Contents
1.
Property information
Portfolio overview
Portfolio summary
P
ortfolio movements
Portfolio geographical breakdown
PRS Portfolio Top 20 Assets
PRS Portfolio Rent Levels Analysis
Pipeline
Case Study: Hawkins & George
Page 38
P
age 39
Page 40
P
ages 41-42
Page 43
Page 44
Pages 45
-48
Page 49
2.
Financial information
Balance sheet
Segmental
balance sheet
EPRA Earnings
Segmental
income statement
EPRA NTA
EPRA NAV Metrics
D
ebt facilities schedule
P
age 50
Page 51
Page 52
Page 53
Page 54
Page 55
Page 56
3.
Other
Multiple Dwellings Relief (MDR)
Renters Reform Bill
Future reporting dates
Page 57
Page 58
Page 59
Originate Invest Operate
Regulated tenancies
Customer has the right to live in the property for life
Sub-market rent set by Valuation Office Agency
Upon vacancy Grainger sells the property
Returns comprise
Resilient rental income: typically 2-4% gross
yield, increasing at c.RPI+5% over two years
Capital growth during investment period
Reversionary surplus realised upon vacancy:
typically 15%-17% uplift
Long term, predictable source of cash generation
Portfolio overview
38
Grainger plc | www.graingerplc.co.uk
PRS
Leases with typical duration of 1-3 years
Market rents
Returns based on
Securing new opportunities at gross yields on
cost of at least 5-7%
Capital growth, driven by L4L rental growth
Securing schemes in areas with high demand and
rental growth potential
Significant opportunity for growth underpinned by
long term and structural trends
Investment funded through cash generated from
regulated portfolio and asset recycling
Purchase
price
(Book value)
Reversionary
surplus
Reversionary
surplus
Capital
growth
Rental
income
Purchase
price
Rental
income
Capital
growth
Sales
Price
Originate Invest Operate
Portfolio summary
39
Grainger plc | www.graingerplc.co.uk
Units
Market value
£m
Net Rent
£m
Net yield
^
Residential
– PRS
9,321
2,601
95
4.3%
Residential
– regulated tenancies
1,332
666*
11
1.8%
Residential
– mortgages (CHARM)
346
64
n/a
n/a
Forward Funded
– PRS work in progress
-
288
-
-
Development work in progress
-
119
-
-
Wholly
-owned assets
10,999
3,738
106
Co
-investment (Grainger share)**
31
15
-
Total investments
11,030
3,753
106
Assets under management (third party share)**
123
58
-
Total assets under management
11,153
3,811
106
Reconciliation of assets under management
Residential
– PRS
9,475
2,674
95
Residential
– reversionary (regulated tenancies and CHARM)
1,678
730
11
Forward Funded
– PRS work in progress
-
288
-
Development work in progress
-
119
-
Total assets under management
11,153
3,811
106
^
Net yield calculated on market value which has not been grossed up for estimated purchasers’ costs
* Regulated tenancies at market value excluding reversionary surplus
** Co-investment includes the 20% of Vesta JV owned by Grainger, whilst assets under management reflects the residual 80% of Vesta JV owned externally to the Group.
Originate Invest Operate
Portfolio movements
40
Grainger plc | www.graingerplc.co.uk
Sep 23
£m
Additions
£m
Disposals
£m
Transfers
£m
Valuation
£m
Mar 24
£m
PRS
London & SE
1,324
19
(27)
9
(40)
1,285
Regions
1,099
2
(8)
246
(23)
1,316
Total PRS
2,423
21
(35)
255
(63)
2,601
Regs
London & SE
590
2
(31)
-
4
565
Regions
103
-
(3)
-
1
101
Total Reg
693
2
(34)
-
5
666
Development
567
107
-
(255)
(12)
407
Total Portfolio
3,683
130
(69)
-
(70)
3,674
Balance Sheet Classification
Investment Properties
2,949
122
(34)
-
(74)
2,963
Trading Assets
734
8
(35)
-
4
711
Total Portfolio
3,683
130
(69)
-
(70)
3,674
The table above excludes 346 units and £64m of market value relating to mortgages (CHARM)
Originate Invest Operate
Portfolio geographical breakdown
41
Grainger plc | www.graingerplc.co.uk
PRS & Regulated tenancies (HY24)
PRS Regulated tenancies
Region
Units
Market
value
£m
Change
vs FY23
Net
yield
^
Units
Market
value
£m
Change
vs FY23
Net
yield
^
London & SE
3,780
1,285
(3.1)%
4.0%
885
565
0.8%
1.7%
South West
512
214
(0.7)%
4.2%
111
25
(0.2)%
2.8%
East and Midlands
1,555
370
(2.7)%
4.6%
201
50
0.8%
2.2%
North West
1,742
356
(2.6)%
5.0%
73
16
2.8%
2.4%
Other regions
1,732
376
(0.4)%
4.6%
62
10
0.9%
3.3%
Regions
5,541
1,316
(1.7)%
4.6%
447
101
0.8%
2.5%
Total
9,321
2,601
(2.4)%
4.3%
1,332
666
0.8%
1.8%
The table above includes wholly owned PRS and regulated tenancy assets only. It excludes 346 units and £64m of market value relating to mortgages (CHARM), as well
as forward funded PRS work in progress, development work in progress and co-investment
^
Net yield calculated on market value which has not been grossed up for estimated purchasers’ costs
Originate Invest Operate
25%
20%
11%
9%
12%
11%
12%
42
PRS portfolio by geography
Grainger plc | www.graingerplc.co.uk
Portfolio by units
Portfolio by value (£m)
13%
11%
16%
5%
17%
19%
19%
19%
17%
13%
8%
14%
14%
15%
Post secured pipeline by value (£m)
18%
19%
13%
9%
10%
18%
13%
Portfolio by rent (£m)
Central / Inner London
Outer London
South East
South West
East and Midlands
North West
Other Regions
Key
Originate Invest Operate
43
PRS portfolio
Grainger plc | www.graingerplc.co.uk
Top 20 assets
Unit mix
# Asset City Postcode Units
Studio /
1 bed 2 bed 3 bed
Area
Sq ft
^
1 Clippers Quay
Manchester M50 3AF 510 162 290 58 371,622
2 The Filaments
Manchester M3 5PF 376 98 235 43* 246,416
3 The Silver Yard
Birmingham B4 6GF 375 184 191 - 225,278
4 The Barnum
Nottingham NG2 3FJ 348 216 126 6 196,916
5 Enigma Square
Milton Keynes MK9 2FU 261 195 54 12 148,885
6 The Copper Works
Cardiff CF10 4BZ 307 229 78 - 183,446
7 Nautilus Apartments
London E16 1FE 146 44 102 - 117,826
8 The Forge
Newcastle NE1 3AA 283 78 179 26 177,451
9 Hawkins & George
Bristol BS1 6WQ 194 109 85 - 116,486
10 The Gardens
London SE22 9QE 208 141 60 7 112,830
11 The Headline
Leeds LS1 4ET 242 111 131 - 148,651
12 Apex Gardens
London N15 5EZ 163 72 59 32 129,783
13 The Tilt Works
Sheffield S3 7NY 284 151 133 - 164,526
14 Argo Apartments
London E16 1ED 134 66 68 - 94,313
15 Brook Place
Sheffield S11 8BR 237 137 100 - 133,238
16 Pin Yard
Leeds LS11 9FA 216 130 70 16 129,052
17 The Condor
Derby DE1 1FB 259 166 93 - 149,150
18 Ability Plaza
London E8 4DT 101 50 49 2 85,468
19
Windlass Apartments
London N17 9LX 108 50 51 7 75,800
20
Springfield House
London E8 2LY 85 38 28 19* 89,089
* includes some four bedroom units
^
Area based on EPC data
Originate Invest Operate
44
PRS portfolio – rent levels
Grainger plc | www.graingerplc.co.uk
2.4%
8.0%
18.9%
20.1%
2.8%
11.8%
26.3%
9.7%
Under £750
£750-£1,000
£1,000-£1,500
£1,500+
Rent per calendar month
(% of units)
London & South East Regions
70%
below
£1,500 pcm
Originate Invest Operate
Recycling capital to drive continued
growth
45
* including CHARM and
reversionary surplus
Grainger plc | www.graingerplc.co.uk
Highly cash generative
Consistent cashflow from vacant sales
Increased asset recycling programme
c.£200m of operational cashflow p.a.
£433m of existing headroom
Investment flexibility
£0.2bn remaining cost to complete our
£0.5bn committed pipeline
£0.5bn secured pipeline and £0.4bn
planning and legals pipeline
Optionality and flexibility on the timing of
secured and planning / legals pipelines
Flexibility to match investment with sales
Uses Sources
Committed Capex
(£0.2bn remaining)
Secured Pipeline
(£0.5bn)
Planning & Legals
(£0.4bn)
Regulated
Portfolio*
(£0.9bn)
Strat Land (£0.1bn)
Other (£0.1bn)
Existing
Headroom
(£0.4bn)
Pipeline
Originate Invest Operate
Pipeline projects
46
High quality build-to-rent schemes
Grainger plc | www.graingerplc.co.uk
Secured
Forward funding
Weavers Yard,
Newbury, West
Berks
Besson Street,
Lewisham
The Silver Yard,
Exchange Square,
Birmingham
Seraphina Apts,
Fortunes Dock
Canning Town 3,
London
The Copper Works
Capital Quarter,
Cardiff
Waterloo,
London
Direct Development
Millwrights Place,
Bristol
Merrick Place,
London
Redcliff Quarter,
Bristol
West Way Square,
Oxford
Exmouth Junction,
Exeter
Co-investment & JVs
Arnos Grove,
London
(CLL JV)
Nine Elms,
London
(CLL JV)
Southall,
London
(CLL JV)
Kennington,
London (CLL JV)
Launched in H1, 307 homes Onsite, 375 homes, Mid 24 Onsite, 231 homes, Mid 24
Onsite, 401 homes, Mid 26
Onsite, 468 homes, Late 25
Onsite, 150 homes, Early 25
Onsite, 132 homes, Early 25
Onsite, 99 homes, Mid 24
Onsite, 65 homes, Late 24
Windlass
Apartments
Ph.2,
London
The Barnum,
Nottingham
Launched in H1, 348 homes
Completed in H1 Committed
Originate Invest Operate
Committed Projects
No.
units
Targeted
launch Status
Est. Grainger
investment
Spend
to date
Gross
yield
target
Forward funding / acquisition
Millwrights Place, Bristol 231 Mid FY24 On site
£63m £63m c.6.0%
Windlass Apartments Ph.2, Tottenham Hale,
London
65 Late FY24 On site
£32m £3m c.6.0%
West Way Square, Oxford 150 Early FY25 On site
£68m £52m c.5.5%
Fortunes Dock, Seraphina Apartments
Canning Town 3, London
132 Early FY25 On site
£56m £47m c.5.5%
Glasshouse Square, Redcliff Quarter, Bristol* 468 Late FY25 On site
£126m £74m c.6.0%
Merrick Place, Southall, London 401 Mid FY26 On site
£156m £38m c.5.75%
Forward funding sub-total 1,447
£501m £277m
Direct development
Weavers Yard, Newbury, West Berks** 99
Part
operational
Phased
completions
£22m £21m c.6.25%
Direct development total 99
£22m £21m
Committed pipeline 1,546 £523m £298m
Committed pipeline schedule
47
Grainger plc | www.graingerplc.co.uk
*Total purchase price of £128m less £2m of completed commercial units acquired
** Remaining phases - 232 homes in total, 133 homes completed with 99 remaining under construction.
Originate Invest Operate
Secured pipeline schedule
48
Grainger plc | www.graingerplc.co.uk
Secured Projects
No.
units
Targeted
launch Status
Est.
Grainger
investment
Spend to
date
Gross
yield
target
Direct Development
Waterloo, London 215 TBC Consent granted
£130m* £13m c.5.0%
Exmouth Junction, Exeter 230 TBC Acquired
£60m £10m c.6.25%
Direct development total 445
£190m £23m
Co-investment
Besson St, Lewisham, London (JV - 50%) 324 TBC Consent granted
£51m £5m c.6.25%
CLL- Arnos Grove, London (JV - 51%) 162 TBC Consent granted
£30m £3m c.5.75%^
CLL- Kennington, London (JV - 51%) 139 TBC Consent granted
£40m £8m c.5.5%^
CLL- Southall, London (JV - 51%) 460 TBC Consent granted
£90m £10m c.5.75%^
CLL- Nine Elms, London (JV - 51%) 479 TBC Consent granted
£140m £25m c.5.5%^
Co-Investment total 1,564
£351m £51m
Secured but not committed 2,009 £541m £74m
Total Secured Pipeline 3,555 £1,064m £370m
* Net investment in addition to existing asset value
^ CLL JV project included at our unlevered 51% share ofestimatedinvestment and gross yield target reflecting our share of rental income excluding management fees.
Originate Invest Operate
Case Study: Hawkins & George
49
We targeted:
12 months to stabilisation
We delivered:
Fully let up in 3.5 months
Grainger plc | www.graingerplc.co.uk
c.7.0% gross yield on cost 7.7% gross yield on cost (FY23)
c.£2.25m net rent on stabilisation £2.5m net rent on stabilisation
194 apartments in Bristol; launched in mid-FY19
Currently 97.4% occupancy
Originate Invest Operate
Market value balance sheet
50
Grainger plc | www.graingerplc.co.uk
FY23 HY24
Market value balance sheet (£m)
Residential
– PRS
2,423
2,601
Residential
– regulated tenancies
693
666
Residential
– mortgages (CHARM)
67
64
Forward Funded
– PRS work in progress
441
288
Development work in progress
126
119
Investment in JVs/associates
91
91
Total investments
3,841
3,829
Net debt
(1,416)
(1,497)
Other liabilities
(66)
(62)
EPRA NRV
2,359
2,270
Deferred and contingent tax
– trading assets
(91)
(86)
Exclude: Intangible assets
(1)
(1)
EPRA NTA
2,267
2,183
Add back: Intangible assets
1
1
Deferred and contingent tax
– investment assets
(106)
(87)
Fair value of fixed rate debt and derivatives
171
108
EPRA NDV
2,333
2,205
EPRA net asset values (pence per share)
EPRA NRV
318
306
EPRA NTA
305
294
EPRA NDV
314
297
Originate Invest Operate
Segmental EPRA NTA balance sheet
51
Grainger plc | www.graingerplc.co.uk
FY23 HY24
EPRA NTA market value
balance sheet (£m)
PRS
Reg*
Other
Group
PRS
Reg*
Other
Group
Investment property
2,928.9
20.0
-
2,948.9
2,943.6
19.1
-
2,962.7
Investment in joint ventures and
associates
72.8
-
18.2
91.0
73.0
-
18.0
91.0
Financial interest in property assets
-
67.0
-
67.0
-
63.9
-
63.9
Inventories
- trading property
9.6
673.3
51.4
734.3
9.0
647.1
55.1
711.2
Cash and cash equivalents
94.8
23.9
2.3
121.0
52.0
12.5
1.3
65.8
Other assets
13.4
8.4
45.7
67.5
28.0
4.9
52.5
85.4
Total Assets
3,119.5
792.6
117.6
4,029.7
3,105.6
747.5
126.9
3,980.0
Interest
-bearing loans and
borrowings
(1,201.3)
(303.1)
(29.1)
(1,533.5)
(1,234.7)
(297.9)
(31.2)
(1,563.8)
Deferred and contingent tax
liabilities
(4.2)
(81.9)
(4.7)
(90.8)
(3.8)
(78.0)
(4.9)
(86.7)
Other liabilities
(78.9)
(12.6)
(46.4)
(137.9)
(78.4)
(12.8)
(55.2)
(146.4)
Total Liabilities
(1,284.4)
(397.6)
(80.2)
(1,762.2)
(1,316.9)
(388.7)
(91.3)
(1,796.9)
Net assets
1,835.1
395.0
37.4
2,267.5
1,788.7
358.8
35.6
2,183.1
* Includes regulated tenancy portfolio and CHARM portfolio.
Originate Invest Operate
EPRA Earnings
52
HY23 HY24
£m
Adjusted
Earnings
Adjustments
EPRA
earnings
Adjusted
Earnings
Adjustments
EPRA
earnings
Net rental income
48.0
-
48.0
53.2
-
53.2
Profit from sales
– trading property
21.2
(21.2)
-
19.0
(19.0)
-
Profit from sales
– investment property
4.0
(4.0)
-
0.9
(0.9)
-
Mortgage
income (CHARM)
2.4
-
2.4
2.3
-
2.3
Management fees
2.8
-
2.8
3.5
-
3.5
Overheads
(15.4)
-
(15.4)
(16.2)
-
(16.2)
Pre
-contract costs
(0.7)
-
(0.7)
(0.7)
-
(0.7)
Net finance costs
(15.2)
-
(15.2)
(17.7)
-
(17.7)
Joint ventures
-
-
-
0.1
-
0.1
Adjusted earnings
47.1
(25.2)
21.9
44.4
(19.9)
24.5
Valuation movements
(41.4)
(75.6)
IFRS profit/(loss) before tax
5.7
(31.2)
Adjusted EPS / EPRA EPS, after tax
1
4.9
2.3
4.5
2.5
Grainger plc | www.graingerplc.co.uk
1
Adjusted earnings per share / EPRA earnings per share includes tax in line with Corporation Tax of 25% (FY23: 22 %)
Originate Invest Operate
Segmental income statement
53
Grainger plc | www.graingerplc.co.uk
HY23 HY24
£m
PRS
Reg*
Other
Group
PRS
Reg*
Other
Group
Net rental income
40.7
6.9
0.4
48.0
46.8
5.8
0.6
53.2
Profit from sales
– trading property
(0.4)
21.6
-
21.2
0.1
18.9
0.9
19.9
Profit from sales
– investment property
4.1
(0.1)
-
4.0
-
-
-
-
Mortgage
income (CHARM)
-
2.4
-
2.4
-
2.3
-
2.3
Management fees
2.7
-
0.1
2.8
3.5
-
-
3.5
Overheads
-
-
(15.4)
(15.4)
-
-
(16.2)
(16.2)
Pre
-contract costs
(0.7)
-
-
(0.7)
(0.7)
-
-
(0.7)
Net finance costs
(11.5)
(3.3)
(0.4)
(15.2)
(14.0)
(3.4)
(0.3)
(17.7)
Joint ventures
-
-
-
-
0.1
-
-
0.1
Adjusted earnings
34.9
27.5
(15.3)
47.1
35.8
23.6
(15.0)
44.4
Valuation movements
(41.3)
(0.1)
-
(41.4)
(75.0)
(0.6)
-
(75.6)
IFRS profit/(loss) before tax
(6.4)
27.4
(15.3)
5.7
(39.2)
23.0
(15.0)
(31.2)
* Includes regulated tenancy portfolio and CHARM portfolio
Originate Invest Operate
EPRA NTA
54
Grainger plc | www.graingerplc.co.uk
FY23 HY24
£m
IFRS
statutory
balance
sheet
Adj to
market
value, tax,
derivatives,
intangibles
EPRA
NTA
balance
sheet
IFRS
statutory
balance
sheet
Adj to
market
value, tax,
derivatives,
intangibles
EPRA
NTA
balance
sheet
Investment property
2,948.9
-
2,948.9
2,962.7
-
2,962.7
Investment in joint ventures and associates
91.0
-
91.0
91.0
-
91.0
Financial interest in property assets
67.0
-
67.0
63.9
-
63.9
Inventories
- trading property
392.2
342.1
734.3
386.0
325.2
711.2
Cash and cash equivalents
121.0
-
121.0
65.8
-
65.8
Other assets
102.2
(34.7)
67.5
102.6
(17.2)
85.4
Total Assets
3,722.3
307.4
4,029.7
3,672.0
308.0
3,980.0
Interest
-bearing loans and borrowings
(1,533.5)
-
(1,533.5)
(1,563.8)
-
(1,563.8)
Deferred and contingent tax liabilities
(122.3)
31.5
(90.8)
(99.4)
12.7
(86.7)
Other liabilities
(137.9)
-
(137.9)
(146.4)
-
(146.4)
Total Liabilities
(1,793.7)
31.5
(1,762.2)
(1,809.6)
12.7
(1,796.9)
Net assets
1,928.6
338.9
2,267.5
1,862.4
320.7
2,183.1
Pence per share
260
45
305
251
43
294
Originate Invest Operate
EPRA NRV, EPRA NTA and EPRA
NDV
55
Grainger plc | www.graingerplc.co.uk
FY23 HY24
£m
EPRA NRV
EPRA NTA
EPRA NDV
EPRA NRV
EPRA NTA
EPRA NDV
IFRS Equity attributable to shareholders
1,928.6
1,928.6
1,928.6
1,862.4
1,862.4
1,862.4
Diluted NAV
1,928.6
1,928.6
1,928.6
1,862.4
1,862.4
1,862.4
Include:
Revaluation of other non
-
current investments
11.6
11.6
11.6
12.4
12.4
12.4
Revaluation of trading properties
347.3
256.5
256.5
329.8
243.9
243.9
Diluted NAV at fair value
2,287.5
2,196.7
2,196.7
2,204.6
2,118.7
2,118.7
Exclude:
Deferred tax in relation to fair value gains of IP
105.8
105.8
-
87.0
87.0
-
Fair value of financial instruments
(34.0)
(34.0)
-
(21.1)
(21.1)
-
Goodwill as per the IFRS balance sheet
-
(0.4)
(0.4)
-
(0.4)
(0.4)
Intangibles as per the IFRS balance sheet
-
(0.6)
-
-
(1.1)
-
Include:
Fair value of fixed interest rate debt
-
-
136.6
-
-
86.3
NAV
2,359.3
2,267.5
2,332.9
2,270.5
2,183.1
2,204.6
Fully diluted number of shares
743.0
743.0
743.0
743.1
743.1
743.1
NAV pence per share
318
305
314
306
294
297
Originate Invest Operate
Debt facilities
56
* Further 1 year extension option available
Grainger plc | www.graingerplc.co.uk
Facility
Lender
Size
Drawn
Maturity
Core Facilities:
Corporate Bond
Listed
£350m
£350m
Apr 2028
Corporate Bond
Listed
£350m
£350m
Jul 2030
Revolving Credit Facility
HSBC, NatWest, Barclays
£392m
£205m
Sep 2028*
Term Debt
HSBC, NatWest, Barclays, AIB
£183m
£183m
Sep 2028*
Bi
-Lateral Term
HSBC
£50m
£50m
Apr 2029
Bi
-Lateral Term
NatWest
£50m
£50m
May 2029
Bi
-Lateral Term
Handelsbanken
£40m
£40m
Nov 2028
Revolving Credit Facility
Wells Fargo
£125m
-
Apr 2028*
Revolving Credit Facility
ABN Amro
£75m
-
Apr 2026*
Sub total
£1,615m
£1,228m
Rothesay Term Debt:
Institutional Term Debt
Rothesay Life
£75m
£75m
Jul 2026
Institutional Term Debt
Rothesay Life
£75m
£75m
Oct 2027
Institutional Term Debt
Rothesay Life
£200m
£200m
Jul 2029
Total Group Facilities
£1,965m
£1,578m
Balance sheet, funding and hedging: strong, secured and de-risked
Originate Invest Operate
Multiple Dwellings Relief on Stamp
Duty Land Tax
57
Grainger plc | www.graingerplc.co.uk
In the Spring Budget, the Chancellor announced the withdrawal of MDR and as a result the
SDLT charge has increased, impacting valuers' assumptions
SDLT on average increases from 2.8% to 5%
The one-off impact of the withdrawal of MDR on our portfolio valuation was £59m (1.6%)
MDR was specifically introduced to encourage investment into PRS and allowed investors to
pay the same SDLT when buying multiple properties as would be due when buying each
property individually
Originate Invest Operate
Renters (Reform) Bill
58
Grainger plc | www.graingerplc.co.uk
Headline changes
Grainger comment
• Abolition of Section 21 no-fault evictions, once courts
have been improved
Grainger supports the abolition of Section 21 evictions
alongside sufficient improvement in the courts
• Strengthen landlords’ ability to regain possession of
their property where tenants are at fault, for example in
cases of anti-social behaviour and repeat rent arrears
Grainger welcomes the strengthening for landlords to
regain possession of properties through Section 8
grounds
• Abolition of Fixed Term Tenancies Grainger welcomes longer-term renting
Grainger’s customers stay on average for almost 3 years
• Annual open market rent setting In line with Grainger practice of annual rent reviews
• Introduction of a PRS Ombudsman In support
• Introduction of a National Property Portal In support
• Ensuring landlords cannot unreasonably refuse pets In support
Grainger offers a wide range of pet-friendly properties
across the country
Originate Invest Operate
Future reporting dates
59
Grainger plc | www.graingerplc.co.uk
2024
Capital Markets Day (TBC)
Autumn
Trading update
September
Full year results
21 November