# Grainger plc Response to Mayor of London and Debt Refinancing

- Link: https://www.directorstalkinterviews.com/grainger-plc-response-to-mayor-of-london-and-debt-refinancing/412788145
- Published: 2019-07-19T07:25:11+01:00
- Author: Giles Arbor

**Grainger plc** (LON: GRI), the UK’s largest listed residential landlord, noted
the announcement issued by the Mayor of London, proposing reviews of the London 
rental market. The proposals are subject to Panarliament’s support and new legislation,
which the Mayor himself acknowledges he does not have the power to implement.

In his statement, the Mayor recognises the difference between build-to-rent and 
professionally developed and managed properties compared to the wider buy to let
sector, and he calls for incentives and support for the build-to-rent and professional
rental market in order to protect investment in new housing supply and existing 
high-quality rental homes. This aligns to Grainger’s strategic aims and our position
in the market.

The Mayor’s plans focus on affordability and tenant security in the rental market
and both are at the heart of Grainger’s business model which focusses on mid-market
rental homes and keeping our customers for the long-term.

Of Grainger’s total portfolio of c.8,600 properties, 22% are open market rented 
in the wider London area. The proposals if implemented have limited effect on Grainger’s
business.

**Grainger refinances £275m of debt, finalising integration of GRIP PRS portfolio**

Grainger plc, also announced today that it has successfully agreed a refinancing
with Rothesay Life for its GRIP portfolio. The new facility has been agreed ahead
of the 2020 maturity date for the previous GRIP facility and at the earliest opportunity
without incurring repayment fees. The new facility consists of two tranche tenors,
a £75m tranche for seven years and a £200m tranche for ten years, with a blended
interest rate of 2.3%, compared to a previous rate of 3.2%.

Grainger acquired the full interest in GRIP, a c. £700m PRS portfolio of c.1,700
occupied private rental homes, in December 2018 from its JV partner, APG. At the
time the company said that it would seek to refinance the debt on the portfolio 
to secure terms on a longer-term basis and at a lower rate, which it has now achieved.

Today’s refinancing marks the final stage of integration of the GRIP portfolio, 
following the successful restructuring of the vehicle, delivering operational improvements
including an immediate improvement in operating costs (“gross to net”) from 32% 
to 26%, achieving overheads savings of £4m and continuing to add value to the portfolio
through our refurbishment programme and PRS development schemes.

Grainger’s operational PRS portfolio now consists of over 8,600 occupied private
rental homes, and its pipeline will deliver an additional c.8,000 new rental homes
once complete.

**Helen Gordon, Chief Executive at Grainger plc, said:**

> “We are pleased to secure this new financing from Rothesay Life at attractive 
> long-term rates, which is an endorsement of the quality of the GRIP portfolio.
> This deal supports Grainger’s ambition to grow as the UK’s leading residential
> landlord, with a strong balance sheet and financing that matches the long-term,
> low-risk nature of private rental assets.”

Share on: