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. |
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 |
I had the same impression but I’ve no spare funds to top up having done my last one in the 260s.
Not had chance to watch the 8.30 presentation Q&A yet.
Given the fall in commercial valuations flagged by Land and Bland this week GRI NAV proved to be a safe haven, quite stable (UP). |
Solid earnings results for Grainger; in particular increase in rents from PRS, with rent increases escalating in the second-half. At first the numbers looked low to me (+4.8%), but it is increasing and probably slightly lags inflation. So hopefully will continue to rise.
Good pipeline of projects and execution to get on stream and let out.
Debt is relatively low for a property business, and seems well-managed.
Disciplined cost control (unlike some businesses reporting recently).
Overall, a good full-year.
I am bullish on the private rented sector in the UK given limitless government incompetence around housing policy, and private landlords pulling out of the market. Grainger could even be a takeover target for large institutions looking to get into the market quickly. |
If take 300p and 220p share price shift, add in the 31% gearing, the market has priced in a 18% property price fall. |
I just bought back at 2.10 a tranche sold almost exactly three years ago. I've held since 2010, trading in a small way. Bargain at this price. I wonder if they still hold the portfolio of freeholds to upmarket houses in Kensington and central London they bought some years ago. Must be worth a few bob by now. |
Quote from recent newspaper article.
Rents are already at record levels in the capital with tenants reporting a chronic lack of supply as young people flood back into London to return to the office after the work from home.
GRI a buy at 2.60, as new builds EPC A & B cheap to heat, so may pay a bit more in Rent but save in heating also one of few landlords with good sites in London & Southeast. So tenants also save in travel costs, young workers no longer want draughty victorian flats, willing to pay for comfort. Just added 2.59, have a good weekend. |
Yes think rental yields will rise. I have seen them go from 8% to 3% and expect some reversion. If not BTL post borrowing becomes a loss on income and capital, creating sales and less supply |
If property values fall in general, will rents nevertheless stay put at their current levels? As if on a stalk? I suppose they will for so long as various term contracts last, the inverse of fixed-price mortgages as it were. But, longer term surely rents will fall in line with capital values. |
"I think valuations are largely driven by rentals, rental growth, and obviously the discount rate. The first 2 variables are going up but the third one is going up too if you know what I mean."
Exactly my thinking. At some point in 2 years the energy market will fall back, gas futs are half now in 2 years. Probably wont see 1k/1.5k cap again as was too low post covid. But £2k seems likely to me, then inflation, interest rates and so the discount rate will come back down but wage rises locked in and asset prices will then reset |
I agree that rentals should stay strong, which is what attracts me to this type of REIT, I am more concerned about long-term interest rates and their effect on property valuations. In an ideal scenario, I would start accumulating on any significant dips or equity raises |
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