Company Announcements

7 October 2024

Grainger plc

("Grainger", the "Group", or the "Company")

POST-CLOSE TRADING UPDATE

Portfolio expansion delivers strong income growth

·      1,113 new homes added in FY24

·      Like-for-like PRS rental growth 6.3%

·      Occupancy 97.4%

·      Strong sales of non-core assets of £274m

Grainger plc, the UK's largest listed provider of private rental homes providing around 12,000 homes, today provides an update on trading for the twelve months to the end of September 2024. The Company will announce its full year financial results for the year ending 30 September 2024 on 21 November 2024.

Helen Gordon, Chief Executive of Grainger, said:

"Grainger has delivered double digit rental income growth this year in line with expectations, with strong like-for-like rental growth at 6.3% and whilst we expect rental growth to ameliorate somewhat, we still expect levels to be above the long term historic average for FY25. This growth is supported by our rapidly growing portfolio, with over 1,100 homes added to our portfolio this year and a pipeline which will double our rental income when compared with FY23.

"Rental growth in FY25 will be underpinned by continuing high levels of wage growth throughout the UK and particularly in our target customer demographics and geographical locations. Affordability remains healthy and customer satisfaction scores remain high, demonstrating the sustainability of our rental income growth going forward.

"The UK rental market continues to experience rapidly accelerating growth in demand, whilst supply remains constrained. Our portfolio is 'fully let' with occupancy at 97.4% at the end of September.

"Our ongoing asset recycling programme supports our growth plans whilst preserving balance sheet strength. Over the year we've generated £274m of gross proceeds from disposals.

"Explicit confirmation by the Labour Government that it opposes rent controls is welcome. The Government's proposals to reform the planning system to stimulate housing supply and raise standards in the rental market is equally welcome and aligns to Grainger's strategy and existing standards.

"This new financial year will be the last year before Grainger becomes a REIT, a major milestone for the business, reflecting our significant transformation as the UK's Build to Rent market leader that has been underway since 2016.

"As we enter a new financial year, we are in a strong position to deliver further growth, benefiting from our market-leading, scalable operating platform."

Strong rental performance continues

Continued focus on our asset recycling programme

·    Sales from our asset recycling programme of non-core assets (including Regulated Tenancies and older PRS assets) continue to perform strongly, generating significant revenue of £274m to redeploy into our ambitious growth plans and preserving balance sheet strength, ahead of last year which was £194m

Strong earnings growth momentum continues

·    Four new build-to-rent schemes were completed during the year, totalling 978 new homes, and a stabilised Build to Rent asset was acquired from M&G Real Estate (The Astley in Manchester), growing our portfolio by 1,113 homes

·    Leasing going exceptionally well in our newly completed schemes, ahead of underwriting which assumes 12-18 months for lease-up:

o  Copper Works, Cardiff (307 homes) - launched late Feb, 79% let (241 homes)

o  Millwrights Place, Bristol (231 homes) - launched June, 77% let (187 homes)

o  Silver Yard, Birmingham (375 homes) - launched late June, 49% let (185 homes)

o  Windlass Apartments Phase 2 (65 homes) - recently completed, launching in Q1 FY25

·    We have designed our operating platform so that returns are enhanced as we scale up the business, reflecting the historic investment we've made into our CONNECT technology platform, and we will continue to deliver significant growth in EPRA Earnings over the coming years

Favourable political environment

·    The newly elected Labour Government have publicly opposed introducing rent controls in favour of stimulating the housing supply-side and raising standards via the Renters' Rights Bill which Grainger already exceeds, and legislation which Grainger is proactively engaged on

·    Helen Gordon, Grainger CEO, appointed to the UK Government's New Towns Taskforce

Confident outlook

·    Grainger is in a strong position to deliver further earnings growth

·    REIT conversion remains on track for October 2025 (FY26)

-ENDS-

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