Grainger was discussed briefly here on today's Vox 'Stock Picking' videocast (starts 42:30).
www.linkedin.com/posts/paul-hill-a5994116_stocks-to-follow-with-justin-waite-and-paul-activity-6826865195483242496-ww3t |
PIWORLD interview with Paul Jourdan, Amati Global Investors mentions Grainger (GRI) at 20m33s see here:
Video:
Podcast: |
Still here though I had forgotten about the Board. I’m doing the waiting bit which is fine as this is a SIPP holding for me and one day they will be twice as big. GLA holders. |
Thanks grahamburn. Had read and listerned to the half year before putting toe in today at 289.8p. Im thinking these trade around 10% below NAV (when include reversion, price rises this year and development gains from inflation) but happy to be corrected. |
Not quiet..... more soporific.
Had even forgotten there was a board covering the company.
Agree quieter boards (say 10/15 reasoned posts per day) are preferred and informative. but not a single post for 7 months is hardly a recommendation.
Especially for a sound and growing company.
In case you missed it, hindsight, this would be an excellent use of your time: |
A quiet BB, something I tend to like |
Most of the tenants are retired : interesting. That helps. |
dropped far far further at first lock down which made no sense as residential property values hadn't suddenly dropped by 25 - 30%. was a great time to buy in and share price topped £3 a few months later. Still a big regulated tenancy portfolio which will be good solid ever popular relatively unmodernised houses and flats. The age profile of the majority of those tenants will mean they are retired and not needing employment to pay rent. I'd be investing more if I had spare cash. Most recently sold a bundle at £3.10 and bought back in at £2.90 - wish i'd waited a bit but it will get back |
Yes, the fact that furlough payments are now being extended to March suddenly ( as of 13.30 not having heard the news sooner) makes a lot of difference : you'll be right, with inability to pay and/or having rent arrears fading from the threats here. |
FD just gone too, though Land Secs probably a new challenge. |
Thank you. It’s a Risk and despite the obvious homeless problem I’m inclined to the view that roofs will be kept over peoples heads via furlough, Universal Benefits, etc
Perhaps still an overhang from Feb 20 Placing, regular tapping of equity holders for development funds, modest dividend. It’s one of the few problem children of mine and I’m hoping a discussion would help me make up my mind. Instinctively I like buying things that haven’t gone up yet, but it doesn’t always work. |
Worries about whether everyone will be able to go on paying their rent , maybe. |
Seriously underperforming share price which is neither here nor there for a long term holder. But before I go topping up here does anyone have any guesses why so weak |
Be warned - entropick is a spam account do not click the link. |
Grainger raises £187m to fund PRS projects |
Tipped in the Times. |
Well that seemed to go well, placing 9.9%@305p. Sadly none if us invited. I struggle to find a hole in this. Hopefully Mr Market will let us buy under 300p sine wet Wednesday in the future. |
Looks good at the moment. Share price has certainly languished behind net asset value for many years. But the PRS sector is already drawing more players in, meaning more competition and falling rents to maintain occupancy. Rents are going to be high first time around, next time it’s second hand and after that it’s dated. Time will tell. But they will never again have the pot of gold that was the regulated tenancy portfolio once its gone. More than happy with increased dividends though |
A 'Tip of the Year' rather. |
 IC have them as one of their Tips of the Week.
IC Tip: Buy at 302p
Tip style
GROWTH
Risk rating
MEDIUM
Timescale
LONG TERM
Bull points
Rental income growing
Rising demand for rented homes
Takeover potential
Shares trade below forecast NAV
Bear points
Exposure to UK housing market
Slim dividend yield
By Emma Powell
Grainger (GRI) reached a pivotal moment in its evolution into private rental developer and landlord at the end of last year. The value of its private rental assets surpassed that of its portfolio of regulated tenancy homes following 2018’s £396m acquisition of the remaining 75 per cent stake in GRIP real estate investment trust that it did not already own. That means the group is forecast to earn more money from rental income than lumpier trading profits, which are generated from development work and selling vacated regulated-tenancy homes. This is particularly pertinent against the backdrop of weakening sales transaction volumes.
GRI:LSE
Grainger PLC
1mth
Today change
-0.50% Price (GBP)
312.42
The affordability challenges of buying a home have driven demand for private rented sector (PRS) homes, which accounted for 20.6 per cent of UK households in 2019, according to research by the Office for National Statistics, up from 13 per cent in 2007. That figure is forecast by estate agency Knight Frank to rise to 22 per cent by 2023. High demand for Grainger’s PRS assets is evident in an occupancy rate of 97.5 per cent as of the end of September. That – coupled with rent reviews on its regulated tenancies – helped boost rental income on a like-for-like basis by 3.6 per cent. The rate of underlying rental growth for the PRS portfolio accelerated to 3.4 per cent last year, up from 3 per cent in 2018.
Grainger’s PRS portfolio consists of 5,597 homes, representing 58 per cent of the total asset base. This is expected to grow to 76 per cent if all 9,104 homes in the pipeline are built. The group aims to secure rental income at gross yields on cost of between 6 and 7.5 per cent on that pipeline. Around 1,000 of these homes are expected to be delivered in 2020, which would add £6m in annual rental income. A joint venture with Transport for London, established last year, could result in the group providing an additional 3,000 homes – and gaining £24m in annual rental income – by 2025. In total, the pipeline has the potential to lift net rent by 141 per cent to £169m at an estimated development cost of £2bn.
Deriving a greater proportion of income from rent, rather than from selling homes, should also feed through to greater dividend payments, given management has pledged to pay out 50 per cent of net rental income to shareholders each year. Analysts at Panmure Gordon forecast an annual dividend of 8.2p a share by 2022, 58 per cent higher than last year and representing a 2.7 per cent yield. This is based on net rental income reaching around £100m that year, against trading profits of £67m.
That shift should also increase the security of dividend payments, although the company will still have exposure to the fortunes of the UK residential housing market. Profits from property disposals were down 17 per cent last year, although management said that was due to a lower vacancy rate, with the time it took for properties to sell stable at 111 days. The final ‘development for sale’ contract was completed last year, and Grainger will now focus on developing investment assets to retain for the long term. These assets are typically built by third-party developers and forward-funded by Grainger, which makes building less capital intensive.
In an environment where interest rates show no sign of being raised in the near term, institutional investors searching for yield have flocked to the UK’s private rented sector, seeing opportunity in the chronic lack of rental housing stock. By the end of June 143,000 homes were completed or in planning, according to research by Savills, up from just 15,000 in the pipeline at the start of 2013. Given Grainger’s existing PRS management platform and expertise, that could make the group a potential takeover target for a large global institutional investor.
The sector has already grabbed the attention of CBRE, the world’s largest real estate services group, after it entered the PRS market in July by agreeing the £267m takeover of Telford Homes, a housebuilder that had shifted its focus from building homes for private sale to constructing rental developments for large investors. |
I can confirm you are not alone. A significant part of my SIPP sits here waiting patiently for a higher dividend. Politically and demand wise they are in a great space, though locking in initial development yields of 7% means there is little scope for misjudgement. I first bought here at 114p perhaps 10 years ago and I was quite full before the Dec 18 rights issue. Taking that up caused me and the share price some indigestion, but yes nicely ahead since, though it's only about 25% on the ex rights price which was around 230p IIRC. Good luck all. |
Is there anyone else in these? I'm surprised it's so quiet on here given they are now a major rental company and have recorded a nearly 50% rise since the rights issue a year ago. Happy Xmas to any holders. |
From AJ Bell
As above plus,the latest time and date for acceptance and payment in full under the rights issue is expected to be 11.00 am on 17 December 2018.
Page 4/5
htps://corporate.graingerplc.co.uk/~/media/Files/G/Grainger-Plc/pdf/downloads/proposed-acquisition-and-equity-raise-prospectus-14-11-2018.PDF |
Hargreaves sent me this info - The Rights Issue is expected to open on 3 December 2018 and will be available to all Shareholders as at close of business on 30 November 2018. If you hold Shares at this time you will be entitled to purchase 7 new Shares for every 15 Shares held, at a price of 178p per Share. |
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