UK listed residential property developer Grainger has reported a string start to the year in its interim management statement for the four months to 31 January 2014.
Grainger has seen encouraging improvement in market conditions supporting valuations, sales and rental income.
Group sales increased to GBP149.3m (31 January 2013: GBP64.6m) due to the one off disposal of the home reversion portfolio as mentioned above (announced on 10 January 2014).
Normal UK sales (vacant sales) showing improved margins with 219 units generating gross sales of GBP39.0m at an average margin of 49.4 per cent (31 January 2013: 201 units generating GBP32.4m at a margin of 41.1 per cent) and, on average, prices achieved have been 7.1 per cent above the September 2013 vacant possession value.
Gross rents of approximately GBP19.3m (31 January 2013: GBP27.3m), reducing as expected principally due to the significant disposal of properties in 2013, some of which were into co-investment vehicles.
Underlying rents remain strong with an average rent increase of 5 per cent on our regulated tenancy portfolio in the UK year-on-year, and rent increases on renewals of c.3.4 per cent and increases on new lets of c.6.7 per cent in the three months to the end of December 2013 on our managed UK market rented portfolio.
Fees and other income were GBP3.8m (31 January 2013: GBP4.6m). This reflects the timing of project completions during the period.
Andrew Cunningham, chief executive of Grainger, says: “We have had a strong first four months of this financial year, with continued increases in sales prices and margins, securing planning permission for three major development projects and a significant disposal which further underlined the robust valuations and liquidity of our home reversion assets. We currently see good market dynamics which provide our business with a positive backdrop going forward as we focus for this year on investment and generating new business opportunities. We are well positioned to take advantage of the current rising market and have begun to explore future value enhancing investment opportunities in both London and major regional cities. We look forward to an exciting remainder of the year.”