Last updated 23 February 2023
Grainger Plc
Founded in Newcastle-upon-Tyne in 1912, Grainger floated on the stock market in 1983 and is the UK’s largest publicly quoted residential landlord with a portfolio of 10,000 homes. The group employs more than 300 people and turns over more than £250 million a year
Financials
In the 12 months to September 2022, turnover at Grainger leapt to £279.2 million (2021: £248.9 million) and profits before tax surged 96% to £298.6 million (2021: £152.1 million).
This rise in pre-tax profits leap was due to net valuation gains on investment property of £129.0 million (2021: £76.8 million) and reclassifications of £81.2 million (2021: £0.0 million). At an operating level, the growth in profitability was far lower with profits increasing 7.4% to £122.2 million (2021: £113.8 million).
To view the financials for Grainger Plc, visit Companies House and use Company ID 9640283.
Operations
Grainger develops housing schemes across the United Kingdom. Major schemes being developed through the procurement pipeline by Grainger range from a £17.8 million plan for 324 homes at New Cross Gate Centre at Lewisham in south London (Project ID: 19014624) to the £38 million Well Meadow Drive development of 284 flats in Yorkshire (Project ID: 18030738)
The group was chosen in 2019 as Transport for London’s build-to-let partner for a programme to build 3,000 homes across eight sites (Project ID: 18321543). The Connected Living London, partnership is a joint venture structure of 49:51 (TfL:Grainger) and is part of a wider TfL scheme to implement a long-term development pipeline delivering an initial 10,000 homes across 320 acres. Projects to come out of Connected Living London partnership so far include the £60 million Nine Elms Over Station Development (Project ID: 15375092), 141 homes at Montford Place in Lambeth (Project ID: 19414898) and 460 homes in Southall (Project ID: 20070748).
Grainger also works with other private sector partners, such as the London Borough of Lewisham, West Berkshire Council and the Canal & River Trust, and with private sector developers, such as Blocwork, Cubex Land, Oakapple and St James Securities, providing forward funding or as development partners.
Grainger is also working with Bloor, Redrow and Taylor Wimpey to develop 2,500 homes in the Berewood scheme at Waterlooville in Hampshire (Project ID: 06334991). Other major residential schemes being developed with other partners include the £57 million Millwright Place & Coopers Court (Project ID: 18243075), where Grainger is working with Bruton and Cubex Land.
The group buys homes being built as part of major residential schemes such as the £200 million Merrick Road Development, where Grainger acquired 400 of the 575 units being built by housing association Network Homes in conjunction with commercial developer, Stanhope (Project ID: 16425482).
The group also operates Grainger Trust, which is its in-house registered provider of affordable homes that was established in 2012. The group’s portfolio is being unwound and as homes are vacated, these units are typically sold on and the cash reinvested elsewhere. At the end of the last financial year, Grainger had a portfolio of 2,553 regulated tenancy homes with an estimated value of £968 million.
In the 2022 financial year, Grainger delivered 669 new homes across four schemes (2021: 1,304 units)
Glenigan Data
In the 2022 calendar year, Grainger awarded main contracts for £203.8 million (2021: £119.0 million)
Conclusion: Rapid acceleration expected
As Grainger’s regulated tenancy portfolio unwinds, this capital is being invested into higher yielding private rental homes. With a pipeline of 6,838 homes, Grainger is looking to substantially increase the size of its portfolio and this spending of around £1.8 billion is providing a plethora of opportunities for the construction industry.
Within this pipeline, the group has a fully-funded programme valued at £953 million to deliver 3,658 homes. At September 2022, £479 million-worth of investment in this programme had still to complete.
Spending on construction is accelerating at Grainger with the value of main contracts awarded leaping by 71% in 2022, when the group broke into Glenigan’s ranking of the construction industry’s Top 50 clients and was ranked in 33rd position with an average contract award was £40.8 million (2021: £39.7 million).
Grainger is already the UK’s largest listed portfolio and is at the forefront of a boom in the private rented sector. Completions halved in the latest trading but a strong rebound is expected and in 2023 Grainger will deliver 1,640 new build-to-rent properties across seven cities in England and Wales
The impact of the Covid-19 pandemic hit net rental income. There was a 22% rebound in the most recent year to £86.3 million (2021: £70.6 million), but profit on the sale of residential assets fell 6% to £63.3 million (2021: £67.5 million). The group’s expenditure on people is also rising. In 2022, the workforce rose 11% to an average of 328 people (2021: 294 people (2020: 275 people). The wage bill leapt by 19% to £20.9 million (2021: £17.5 million) and net debt has increased by 21% to £1,262 million (2021: £1,042 million).
The pandemic and the changes in building regulations for cladding on high-rise buildings in the wake of the Grenfell disaster have both presented challenges, while rising materials prices and labour shortages are likely to increase the cost of development
The fundamental imbalance of the UK’s housing market – too many buyers, too few new homes – drive increasing numbers of people towards renting and helping Grainger sustain its business model.
Winning Work With Grainger
Main contractors that Grainger have used recently include major national contractors such as Countryside, Graham and Galliford Try. Grainger also has a contract for emergency repairs with Millgrove Construction.
Architects that Grainger has worked with recently include Leach Rhodes Walker, Lyon Sleeman & Hoare and Lifschutz Davidson Sandilands. Grainger also works regularly with Montagu Evans for planning advice and has employed project managers including Arcadis, Buro Four and JLL.
Details on Grainger’s supply chain can be found here.
Key Grainger procurement contacts include:
Director of Land & Development – Michael Keaveney, tel: 020-7940-9500