Investment Case

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Investment Case

 

Strategic objectives

 

Our objective is to be a leader in the residential market, delivering sustainable long term returns to our investors and our partners from a combination of sales, rents and fee income.

 

Leadership: We will maintain our leading position in the residential property market

 

We will seek recognition as a market leader by setting out our vision of the future in key areas that matter to us such as the PRS, House Price Inflation (HPI) and the position of the London housing market in the UK. We will build on our core values to demonstrate through our behaviours, our people and our brand what it means to aspire to leadership.

 

Action and impacts: Market leadership will maximise the opportunities open to us, such as entry to tender positions, attracting the best staff and partners, and providing the credibility to have a meaningful input into government policy.

 

Returns: We will locate and manage our assets to deliver the best risk adjusted returns

 

This is at the heart of Grainger as a property business. We will constantly revisit capital allocations in terms of geographic diversity, asset type, investment criteria and length of hold.

 

We will be agile, buying assets in the right places for the right prices.

 

Action and impacts: As leaders in the regulated tenancy and home reversion markets, we will continue to acquire these assets as appropriate.

Growth in our market rented business will shift to a greater emphasis on build to rent projects. Our first significant step towards this, London Road, Barking, will launch in 2015.

 

Balance: We will balance the sources of out income through exploiting changing market opportunities

 

The emerging more mature, customer focused private rental sector (PRS) will become a more significant part of our business. We will also increase our focus and our capabilities through the creation of joint ventures and fund management structures to generate recurring fee income.

 

Action and impacts: It is our intention that market rented assets will make up an increasing proportion of our portfolio and income. As this progresses we will define the rate and scale of transformation.

 

Optimisation: We will optimise our financial and operational gearing to match market conditions

 

We will continue to flex our sources of debt to support our evolving business model. Having reduced our absolute levels of debt over the last two years, LTV will be our preferred measure going forward, reflecting the more dynamic business environment. Our current target level of gearing of 45% - 50% is appropriate

 

Action and impacts: We will continue to manage the average cost of debt balanced with terms and tenor.

Grainger Centenary Film