Grand City gives insight into private rented opportunities

Grand City Properties, a residential landlord in the German market, has just published its results for 2013, giving a fascinating insight into the potential for institutional investors, if they get involved in buying and renting homes. Could we see an equivalent of Grand City in the UK market, in just a few years?
Grand City finished 2013 with 26,000 homes in its portfolio, and recorded rental income of just under EUR100 million, with profits on the rise. The company is listed on the stock market, and investors appreciate its approach, sending the shares on a positive trajectory through the last two years. The company is backed by a selection of German and other European banks, and has already in 2014 bought a further 2,000 units to add to its portfolio.
Rather than just being a passive landlord, Grand City actively manages its portfolio, buying into run-down assets and improving them. Its “stabilised” properties have less than 5% vacancy rates, while it buys into “turnaround” properties with typically more than 15% of empty units. It aims to hold 90% of the properties it acquires, for the long term.
Part of the group’s strategy is “to provide a high quality service to tenants with the objective to minimise tenant churn”. It spends on surrounding gardens, children’s playgrounds and sporting facilities, to enhance the attractiveness of properties.

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