Grainger Plc · LSE:GRI
Grainger — Corporate Update (July 2015)
25 slides from Grainger's corporate update, July 2015
Slide 1: Investor Property Tour Summer 2015
Investor Property Tour Summer 2015
Slide 2: Agenda for today
Agenda for today • Presentation Your hosts: • Grainger overview & strategy • Private Rented Sector (PRS) • Nick Jopling Executive Director of Property • Abbeville overview • Kurt Mueller Director of Corporate Affairs • Q&A • Anish Thobhani Director of Property and Asset Management (South) • Tour of
Slide 3: Grainger overview
Grainger overview • A market leading residential owner and manager with consistent outperformance • Returns driven by asset value growth and income from sales, rents and fees • Highly cash generative business model • A high quality, national portfolio Berewood Phase 2 • Latent value in reversionary
Slide 4: Grainger's business model
Grainger’s business model Rents Sales - Regulated - Regulated tenancies tenancies - PRS assets - Development (market rented) - Home reversions - Fund and asset management Fees 4
Slide 5: Foundation for growth
Strategy PRS Business …FOR GROWTH (market rented portfolio) Market value Total (UK & Germany, wholly-owned and JV’s/assoc’s) £1.1bn Wholly-owned (UK & Germany) £463m JV’s/assoc’s (UK & Germany) £670m FOUNDATION… Reversionary Business Will release circa £120m gross cash per annum to 2030 A SOLID Mark
Slide 6: Reversionary surplus
Reversionary surplus Grainger’s total portfolio (wholly-owned and JV’s and associates) £2.8bn £2.3bn Reversionary £1.7bn surplus: c.£500m (120p) Book value Market value Vacant possession (equal to market value at acquisition) value Acquisition – Buy at a Hold Period – tenanted Sale – sales made at d
Slide 7: Private Rented Sector
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Slide 8: The PRS market
The PRS market Rapid growth in PRS over the last decade… • PRS has nearly doubled in size since 2002, now with 4 million PRS properties, housing 9.1 million people in England in 2012-13, 18% of the population. And it is set to continue… • Savills forecast that the number of households in the private
Slide 9: Tenure Forecasts to 2019
Tenure Forecasts to 2019 +566K more PRS households fewer owner fewer owner occupied households occupied households 16% owner occupied growth in down from 28% private renting more owner occupied households of households remain in Owner occupation fewer PRS households +256K more owner occupied househo
Slide 10: Who are our customers?
Who are our customers? Source: English Housing Survey 10
Slide 11: Using research to inform our investment decisions
Using research to inform our investment decisions • Who will be our customer? • What do they want? • What do they value? • Proprietary research conducted by Mindfolio, using their YieldLab analytics and ChoiceLab tool • 1,287 respondents KEY DRIVERS Before moving-in After moving-in Price Repairs Loc
Slide 12: The PRS market and Grainger
The PRS market and Grainger The opportunity What we bring to the market • Strong, supportive UK demographics for • A strong, reputable management market rented homes platform • Government support to grow rental market • Knowledge of developing, managing and trading residential property • Opportunity
Slide 13: Growth in our PRS Investment Business
Growth in our PRS Investment Business • We have… • One of the largest UK PRS portfolios (c.3,000 units) • We’re growing… • One of the biggest PRS pipelines in the UK – c.2,000 units by 2017 (secured and advanced) • More than 6 live build to rent sites underway – consented, under works or completed (
Slide 14: Build to rent & PRS pipeline
Build to rent & PRS pipeline Pipeline of a further c.2,000 PRS market rented units SECURED PIPELINE: Est. completion 1. Regional portfolios – balance sheet c.570 units 2015 2. Abbeville Apartments – balance sheet c.100 units 2015 3. RBKC sites – w/ local authority c.60 units 2017 4. Berewood – balan
Slide 15: Routes to market: our delivery model in PRS
Routes to market Our delivery model in PRS Low Model Activities Pipeline Examples: Land assembly, planning, construction of infrastructure, construction costs of PRS Berewood and Wellesley Strategic land homes, rental values, opex and capital value Build to rent Examples: Speed to income Land assemb
Slide 16: Next steps
Next steps • Continue to add to robust pipeline • Increase scale of dedicated PRS team in line with activities • Further develop strategic sourcing partners • Grow activities in the regions 16
Slide 17: Abbeville Apartments
Abbeville Apartments ‘BETTER RENTING WITH GRAINGER’ 17
Slide 18: Abbeville Apartments, Barking
Abbeville Apartments, Barking • 100 apartments and amenity / communal space • 54 one beds, 36 two beds, 10 three beds • Forward purchase agreement with Bouygues, the contractor, made in 2012 • Initial down payment to secure acquisition • Remainder paid on completion • Construction completed ahead of
Slide 19: Financials for Abbeville
Financials for Abbeville • Acquisition cost: c.£14m • Annual gross rent: est. £1.34m Marketed pricing from Avg sq ft 1 Bed £975 pcm 548 sq ft 2 Bed £1200 pcm 717 sq ft 3 Bed £1325 pcm 970 sq ft 19
Slide 20: Research driven: understanding our customers
Research driven: Understanding our customers • Who will be our customer? Utilising: • What do they want? • Our local knowledge • What do they value? • Proprietary research (e.g. Mindfolio) • Industry research • Tapping into our wide network of lettings agents (Bairstow Eves) • Mystery shopping • Dat
Slide 21: What's different?
What’s different? • Targeted customer base • Late 20s; Early 30s • Young couples • Incomes of £30-40k • City & Wharf workers • IT employees • Key workers (e.g. teachers, nurses, police) • Tried & Tested by Grainger • On-site lettings and management • Amenity offering 21
Slide 22: Designed for the rental customer
Designed for the rental customer • On-site management staff • Wifi from Day One • Residents’ lounge • Only double bedrooms • Fitness Studio • Furniture packages available • Communal Garden • Balconies for every apartment • Interior Designs by HemingwayDesign • One, Two or Three year tenancies 22
Slide 23: Grainger's offering
Grainger’s offering • Rent directly from your landlord; no middle-men • A safe pair of hands - A professional FTSE250 residential landlord • Over 100 years’ experience • Providing you with your own dedicated property manager and a dedicated repairs team with a 24/7 repairs line • Meeting the London
Slide 24: Hugely successful launch
Hugely successful launch Launch day: Thursday, 18 June • Over 4,500 have viewed the Abbeville website • 228 viewings booked for the first 2 weeks • 52 viewings undertaken in the first 3 days • 31 reservations taken in first 3 days • As at 13 July, • c.60% under offer/let • 25% occupied • c.25% on 3
Slide 25: Thank you
grainger plc “wt Wt Thank you