£1.4bn in Build to Rent investment this week

The upcoming Build to Rent scheme has received a staggering £1.45bn worth of investment in this week alone.

Build to Rent, where institutions both fund and manage specifically built rental accommodation, is seen by many observers as a government-backed scheme to improve the standards of British lettings.

However, many within the industry are concerned that this will reduce the importance of buy-to-let investors.

Worries

Grainger PLC, Britain’s largest listed residential landlord, is the latest investor in the scheme and says it is going to spend around £850m on Build to Rent by 2020.

Helen Gordon, the new chief executive of Grainger Plc, said, ‘it is clear that swift and decisive action is required to capitalise on the compelling market opportunity and to enable Grainger to realise its potential of being the UK’s leading private landlord.’[1]

The firm’s latest trading statement to the City seems to suggest a restructuring of Grainger, to make sure it can obtain a share of the ever expanding Build to Rent Market.

Additionally, the company says it will, ‘re-allocate development team resources to deliver new PRS stock,’ and, ‘refocus the acquisitions team to improve access and conversion of PRS opportunities.’[1]

£1.4bn in Build to Rent investment this week

Statement Of Intent

Grainger’s trading statement also says, ‘as we look out to 2020, our PRS- led strategic targets are:’

• invest over £850m into PRS assets to drive rental income growth
• net rents and income to more than cover overheads, expenses and financing costs;
• net rental income to exceed profit from sales
• dividend will increase, reflecting the greater proportion of rental income

Just last weekend, Gordon said that Grainger’s Build To Rent offer would include tenancies ranging from six months to three years In length.

[1]https://www.lettingagenttoday.co.uk/breaking-news/2016/1/build-to-rent-is-coming–1-4-billion-in-investment-this-week