GRI yield will have to go up when it converts to a REIT. |
PRS had a good write up in IC, should also apply to GRI. GRI better in respect of more South East orientation, I think lowish yield puts off some investors, but making good strides in improving portfolio(selling old & building new energy efficient homes) & great locations. Joint venture with TFL right next to stations. I think yield will improve next few years as well. |
Rents increasing rapidly in UK:
This makes sense based on private landlords withdrawing due to tax, regulation and mortgage rates, as well as housing shortages due to underbuilding. Good story for BTR like Grainger; hopefully they can pump up their prices quickly and cash in. |
Yes but market will price in value at end of fix
I do hold and think value is fair here |
They have hedged interest rates with IRS. |
When the loans reset to say 5% (10 year gilt 4% plus credit spread), then from memory the 30m interest goes to 50m. Rental income 80m so need 25% rent rises to cover interest rate shift. Then have the debate what is a fair rental % return ie divi. Maybe can argue it can be lower than base rate if getting inflation growth on assets |
The IC comment on leverage made no sense to me, so I went to double-check. GRI has loans of 1.5B, all long term with near zero rate risk. Set that against 3.3B of hard assets. That is not a bad "leverage" position for a property business.
These analysts are morons. |
IC comment. The final bull point for Grainger is demand. Residential rents are increasing at their fastest pace on record thanks to a shortage of available homes. This is a big part of the reason why analyst Oxford Economics predicts that residential property will far outperform all commercial property segments in the coming years – on both valuation and rent increases.
So, while Grainger is heavily leveraged, it is building into a property sector with demonstrable demand and a strong potential for valuation increase. No small feat at a time when many property companies are struggling. Buy |
Also keep hoping they might get bought out by one of the new entrants trying to come into the market, e.g. Lloyds or some Americans. |
Good update almost full occupancy & swapping older assured tenancy houses for modern new build complexes, Easier to manage & energy efficient. Mostly London & SE based in which shortage of good quality flats. JV with TFL great building near underground. Low yield now but can see increasing to 5% next few years. Only negative high admin charges. |
Seems like pretty good half year-results today. Net rental income is up nicely, indicating both good cost control and above-average rent rises that are also above average wage inflation.
Important to look through the noise from the property portfolio disposals and revaluations.
Debt and balance sheet look very solid with lots of room to grow. I am a long-term fan of the build to rent sector in the UK given the way government mismanagement of housing policy is forcing small landlords out and also constricting new houses to buy.
I listened to a little of the earnings call: this company always comes across to me as being very professionally managed. |
 I have high hopes for Grainger, not just because of the exodus of lousy and small landlords from the UK market due to tighter regulation, or because Grainger aim to double in size, or because property prices will be dropping while rental demand rises over the next couple of years, or profitability, or good PE ratio, etc.
I bought shares (Feb 23) because they look like a very well functioning *System*. They say they have a holistic approach and all levels do appear competent and properly coordinated:
The board contains a lot of background and experience in their Primary Activity (I find it absolutely bloody BIZARRE that some Boards have nobody representing the core *purpose* of the business. I don’t care what anyone says, a board of accountants will not have the requisite passion or entrepreneurial ‘feel’ for shoe mending or drain unblocking or whatever their business actually *does*).
According to online reviews, employees and tenants of Grainger are happy and genuinely valued. To me, this also indicates that internal and external communications, etc, are working properly, which is critical. Come to think of it, why is customer and employee opinion seldom subject to as much analysis, consideration and speculation as P/E ratios and Dividend Yields? (Short Termism maybe???)
I greatly like the fact that Grainger are investing in fairly conventional IT to make established processes more efficient (with ref to the app etc). No mention of ‘cutting edge’ or any other buzzwords. Most reassuring 😊
Grainger also has ethics, e.g. Grainger Trust’s affordable housing, which I like.
Anyway, my armchair research indicates this is a business that’s in near full control of itself top to bottom and left to right. Probably won’t go 'instant stellar' any time soon, but should be good for solid, steady progress.
I might even invest a few more quid… |
!FOLLOWFEED
I have high hopes for Grainger, not just because of the exodus of lousy and small landlords from the UK market due to tighter regulation, or because Grainger aim to double in size, or because property prices will be dropping while rental demand rises over the next couple of years, or profitability, or good PE ratio, etc.
I bought shares (Feb 23) because they look like a very well functioning *System*. They say they have a holistic approach and all levels do appear competent and properly coordinated:
The board contains a lot of background and experience in their Primary Activity (I find it absolutely bloody BIZARRE that some Boards have nobody representing the core *purpose* of the business. I don’t care what anyone says, a board of accountants will not have the requisite passion or entrepreneurial ‘feel’ for shoe mending or drain unblocking or whatever their business actually *does*).
According to online reviews, employees and tenants of Grainger are happy and genuinely valued. To me, this also indicates that internal and external communications, etc, are working properly, which is critical. Come to think of it, why is customer and employee opinion seldom subject to as much analysis, consideration and speculation as P/E ratios and Dividend Yields? (Short Termism maybe???)
I greatly like the fact that Grainger are investing in fairly conventional IT to make established processes more efficient (with ref to the app etc). No mention of ‘cutting edge’ or any other buzzwords. Most reassuring 😊
Grainger also has ethics, e.g. Grainger Trust’s affordable housing, which I like.
Anyway, my armchair research indicates this is a business that’s in near full control of itself top to bottom and left to right. Probably won’t go 'instant stellar' any time soon, but should be good for solid, steady progress.
I might even invest a few more quid… |
steve3sandal1, speaking as a landlord and a shareholder here, either halifax price index catches up or grainger and co rise. Take your pick |
Off thread but I couldn't help myself averaging down on my Vonovia disaster today. If banking turmoil is to be avoided someone is going to have to print and reduce interest rates. |
Looks good value, new builds all energy efficient, in best London & South East locations, most debt fixed. Recycling Capital from legacy estate. Rents rising &, occupancy virtually 100%. Obviously share price sensitive to rising interest rates, but the way Banking Sector going this will hopefully be the last increase, maybe an emergency cut in the Summer?. I have a small holding looking to top up for my SIPP. |
I think it's caught up in the poor sentiment on UK interest rates and the housing market. Good time to get in for long-term investors. |
Another top up for me at 226p. I'm a little baffled at the share price Recent Update was fine. Not the greatest yield, but it should grow OK, not the cheapest PE, but resi NAV seems to provide an anchor at say 300p. Welcome opinions. |
Not much. Was an ironic comment. Clever clogs in the City have feet of clay just like we do from time to time. |
What was canny about them? |
Ordinary shareholders can now buy at a considerable discount to the placing price of 3.10 paid by canny City people in 2021. |
Anyone know why the big move down today? |
Grainger plc issued a solid trading update reporting strong rental growth and occupancy as demand for rental housing continues to build. Like-for-like rental growth was 6.1% ytd, with record occupancy of 98.7%. The outlook is also upbeat, 2023 is a year of record investment and delivery for Grainger with c.£300m of capital expenditure on committed developments in 2023 and the delivery of 1,640 new, purpose-built, energy-efficient rental homes for the year. Valuation is a little unhelpful, forward PE ratio and PS ratio are 3rd quartile. The share price also lacks momentum. One to monitor for the time being...
...from WealthOracle |
98.7% occupancy, 7.8% rental price rises on new lets and almost fully hedged against interest rate rises.
Sounds pretty good to me as long as they are not getting too hard hit on maintenance cost inflation. |
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