Boom time for PRS developer as more projects promised
Built-to-let developer Grainger has pledged to build a dozen new private rental scheme (PRS) developments over the next two years as it capitalises on the opportunities presented by the property market in its present state.
The firm - the largest residential landlord in Britain to have a stock market listing - posted half-year results showing pre-tax profits of £41 million, up 13 per cent year-on-year. Presenting the results to shareholders, chief executive Helen Gordon said this strong financial position meant the company was in a good place to raise funds for large-scale investments in property, with the market now ripe for such investment.
She explained: "The demand for the rental market in the UK remains strong with 20 per cent of all homes in England privately rented, the highest levels since records began in 1980.
"In addition, for the first time we have seen an increase in the number of households renting across the broadest age range of 25-64."
Discussing the fundraising efforts, she added: "We have secured £439 million of private rented sector investment, over half of our £850 million target, and have good visibility on additional investment opportunities to meet our overall target.
"We are making good progress delivering our pipeline, and on average we are completing a new PRS building every two months over the next two years."
At present, property worth a total of £425 million was in the legal or planning process, with several other projects making progress in the construction phase.
These include the £99 million Clippers Quay scheme in Salford, which is now half-finished and will contain 614 units. Smaller projects include the 104 homes at Berewood in Hampshire that is on course for completion this summer, the 134-unit Argo Apartments programme at Canning Town in London, which will be finished this autumn, and the Finzels Reach development in Bristol, where work has just begun on the £46 million scheme. Containing 194 units, it should be completed in 2019.
All this means insulation fitting and shower waterproofing work will be taking place on a large scale before too long, with much more work of this kind arising from Grainger's future projects.
Among those set to begin in due course are schemes at Kew and Apex House in London, in Newbury, at King's Dock Mill in Liverpool and at the former Yorkshire Post building in Leeds. A planning application has been submitted for a scheme at Waterloo in London.
These acquisitions demonstrate how the growth of PRS has stretched way beyond the capital, with the expanding markets firstly taking in Manchester and now other big cities such as Liverpool and Leeds, with the Newbury project showing that commuter towns in range of London are also now on the list.
Whether for PRS purposes or for sale, the growing construction of apartments in areas away from London has led to a number of firms taking new steps.
A prime example of this is that of Inland Homes, which has been a specialist in London and the southeast, boasting a wide portfolio of projects in the capital and counties such as Kent, Hampshire, Buckinghamshire, Hertfordshire and Essex. However, it is now diversifying by building its first project outside this area, the 148-unit Sherbourne Wharf site in the heart of Birmingham.
Director Paul Brett said: "While the main focus of our business is on the commuter belt around London as well as other popular areas in the south of England such as Southampton, the strength of our understanding and specialist expertise in the planning system means that we are able to identify opportunities outside of our normal geographical remit, acquire sites and secure planning permission in order to deliver meaningful value for our shareholders."