Private landlord Grainger Plc boosted its rental income by 45% last year after ramping up its presence in the private rented sector.
The Newcastle based firm – the UK’s largest listed landlord – has published full year results for the year ended September 30 2019, detailing how it has delivered 1,000 new homes in the UK, in places such as Manchester, Sheffield and Aldershot.
But the company said it still has no immediate plans for developments in the North East. While it is on track to deliver another 1,000 homes next year, none of them will be based in the region.
Grainger, which recently announced a deal to build 231 homes in Bristol, has been working to ramp up its presence in the private rented sector (PRS) and managed to increase its net rental income from £43.8m to £63.5m during the year.
Last year Grainger’s CEO Helen Gordon told the Journal it was “a real embarrassment” that the company had not secured anything in Newcastle.
However, while the company has no immediate plans for a development in the region, Ms Gordon said the region is still part of the firm’s plans.
She said: “We haven’t announced anything but it is still very much part of our agenda.
“We continue to look in the North East. It is a really strong market.”
Commenting on the firm’s results, Ms Gordon said: “In terms of our profit before tax it was up 30% and our net rental income was up 45%.
“The net rental income is an important one as it feeds directly through to our dividends. Our dividend is up 9% all in all, so it’s been quite a big year for us.”
Increasing its PRS portfolio has become a major focus for Grainger and over the last year it has increased its PRS portfolio from a value of £591m to £1.525bn. It also has a pipeline of £2bn PRS properties.
Much of the firm’s rental growth was achieved through Grainger’s acquisition of the GRIP portfolio, which added £17.7m to its rental income. Since the acquisition it has secured an additional £103m of PRS investment in London and the South East.
Despite the strong growth figures, Grainger’s revenue fell from £270.7m to £222.8m during the year. This caused operating profit to fall from £123m to £104.9m.
This was largely due to the firm’s 2018 figures being inflated due to it selling off a number of assets.
“We had some legacy projects we were selling though so we have the joint venture with the Royal Borough of Kensington and Chelsea,” said Ms Gordon. “We ended up selling those units and those sales boosted our operating profits and it was boosted by the WIP portfolio.”
Meanwhile profit before tax increased from £100.7m to £131.3m.
