Residential developer Grainger delivered strong rental growth in the first four months of its financial year with a 4.1% rise in overall like-for-like rental growth and 3% growth in its PRS portfolio.
It said that selling prices of its properties were proving resilient, and that its residential sales performance was in line with last year, with £29m of completed sales in the four months to 31 January, although the firm noted a small increase in the length of time to complete sales.
In mid-January 2018 it completed its Argo Apartments scheme, which comprises 134 flats in Canning Town, east London.
The company said that lettings performance at the scheme had been ahead of expectations and market sentiment. In three weeks since launch, it has let nearly 40% of the flats, at an average of 3% above forecast rental levels, with the majority of customers taking three-year tenancies.
The company predicts the scheme will generate a gross yield of 7.5% once fully stabilised.
Completed residential sales for period was in line with the prior year at £29m.
Overall completed sales totalled £39m for period, £10m lower than the prior year, which the company said was owing to the timing of development land sales. Overall sales profit totalled £15m, which was also in line with last year.
Its current residential pipeline is also in line with last year at £55m.
Since the beginning of the financial year, Grainger has secured four deals totalling £166m in its PRS pipeline, bringing its secured pipeline to £690m. These acquisitions are expected to deliver gross yields of around 7%. It has also been selected as preferred bidder on a PRS scheme in London.
Helen Gordon, chief executive, said: “The start to our financial year has been a positive one. We have seen good demand for our rental homes and strong rental growth, ahead of last year.
“Since announcing our FY17 results in November, we have secured an exciting new PRS build-to-rent development in Sheffield, one of our target cities, that will deliver 237 new homes. Our total secured investment pipeline has increased to £690m for 4,300 high-quality rental homes, relative to our £850m target.”
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