Build-to-rent operator reveals £1.4bn development pipeline

Its adjusted earnings dropped slightly, however, falling to 6% to £91.6m. This was due to lower sale profits as it continues to shrink its regulated tenancy portfolio. Sale profits dipped from £57.8m to £43.6m accordingly.

Other adjustments included £5m in fire safety provision.

The landlord opened its first scheme in Cardiff during 2023-24 and acquired an existing BTR asset, the Astley in Manchester.

Helen Gordon, chief executive of Grainger, said: “Building on last year’s record, we have delivered another strong year of growth, adding 1,236 new homes to our expanding nationwide portfolio.

“These new homes together with like-for-like rental growth of 6.3% have meant we have once again delivered double digit net rental income growth.”

This will be Grainger’s last year before its conversion to a real estate investment trust (REIT) next October.

By that stage, it will be predominantly made up of BTR homes rather than being reliant on trading profit, meaning it will be able to qualify as a REIT and distribute at least 90% of its profits to investors.  

“Since setting out our strategy in 2016, we have invested £2.5bn into delivering new BTR homes, and at the same time delivered value by divesting £2bn from non-core businesses and assets,” said Ms Gordon.

“Over this period, we have more than tripled the net rental income for the business. In the last year alone, we have disposed of £274m of non-core assets, recycling £270m of this capital into higher yielding, new, high-quality, energy-efficient BTR homes.”

Grainger said it had stepped up asset recycling during the year to maintain its balance sheet and “create further capacity for investment”.

Ms Gordon welcomed the government’s “public rejection of rent controls”, adding that plans to raise rental standards “plays to Grainger’s strengths as a leading landlord”.

Grainger is developing 351 homes next to Cockfosters Tube Station via Connected Living London, a tie-up with Transport for London.

The operator also struck a deal with Network Rail and developer Bloc Group in November last year with an aim to deliver 2,000 BTR homes across six cities.