Grainger buys in London but eyes up the regions

Leading residential landlord and investor Grainger has indicated it will now look to the UK regions for future private rented sector investments – just as the company announced it has bought a £160 million residential portfolio in central London.

The latest deal has bought Grainger 61 properties in Kensington and Chelsea, the heartland of smart central London. The houses in the purchase are valued at less tahn their vacant possession value, as 45 are subject to regulated tenancies, while 13 are let on assured shorthold tenancies and 3 are empty.

“This is a rare and exciting opportunity,” said Grainger chairman Andrew Cunningham. “It is a very attractive portfolio in one of the most prestigious locations in London and it includes a high concentration of regulated tenancies, a sector in which Grainger has had a long and successful history of investing. Leveraging this experience and the skills within our unique operating platform to manage and enhance residential property, I am confident that we will generate significant value from the portfolio on behalf of our shareholders over time.”

The company has hinted that it may well sell individual properties as they become vacant, or look to redevelop where suitable, taking advantage of house price rises in London’s raging residential market. Grainger used existing finance facilities to purchase the portfolio, and still has more than £200 million of firepower to use in the market, should it wish.

And that firepower may well be deployed outside the London area, if a report by publication Inside Housing carries weight. They report that Grainger now sees better opportunities in the regions, “in particular in build-to-rent and private rented sector developments” as economic recovery takes hold. An unnamed Grainger source says competition is high in the capital, with a large volume of money chasing a small volume of deals in London.

Agents have recently reported that price rises in London mean investors can now get a better return on private rented property by purchasing in the regions, as previously reported by Resimarketnews here.

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