Grainger hails switch to real estate investment trust status
Grainger PLC on Monday said it has successfully converted to real estate investment trust status, after shareholders approved an update to its articles of association.
The Newcastle-upon-Tyne, England-based residential landlord said the milestone represents the culmination of its nine-year strategic transformation into a pure-play build to rent business.
The company has a portfolio of around 11,000 rental homes, valued at £3.5 billion.
Grainger said it has a full-funded pipeline of 4,565 homes valued at £1.3 billion. It expects 50% earnings growth by the 2029 financial year.
The conversion has been supported by the accelerated asset recycling programme, Grainger added. It has sold £1.8 billion of non-core, low-yielding assets over the last ten years.
Grainger said converting to REIT status positions it as a more tax-efficient investment vehicle, by eliminating effective double taxation for the business and shareholders.
‘The move unlocks meaningful shareholder value through improved returns, strengthens the company’s ability to continue to grow its dividend, and allows the business to continue to enhance its operational platform - driving customer satisfaction, long term customer retention, and sustained growth in shareholder returns,’ the company said.
Grainger said demand for its properties ‘remains strong’, with occupancy over 96% and rental growth remaining above the long-term average.
It expects 25% earnings growth by 2026 from financial 2024, and 50% growth by financial 2029.
‘Our successful conversion to REIT status marks a significant milestone in Grainger’s strategic transformation. Over the past nine years, we have fundamentally reshaped our business to become the UK’s leading build to rent provider. This conversion enhances our ability to deliver sustainable returns to shareholders while continuing to provide high-quality rental homes for our customers,’ said Chief Executive Helen Gordon.
Shares in Grainger were up 0.3% at 191.60 pence in London on Monday morning.
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