Transformational year it was, sort of, but not wholly in a good way....
Firstly that was last year. I'd be much more interested in info about this year... or next
Secondly, you always have to look behind the numbers with GRI. One of the big issues for me is that they were forced to renegotiate new rents (obviously higher) when many leases expired, not obtain vacant possession and sell, as per the original plan - that's where the real money is - buy it with a long-term sitting tenant and then sell it when it's empty. They dress up the increased rents as a good thing but it just delays the real juice by often up to 20 years - that assuming they can even get sitting tenants out then. In the meantime the rents are still substantially below the 'full' (standard 6 month let) rate even if higher than last year.
The share price says it all - pretty much unmoved over the year despite this 'great transformation', still very much stuck in/near it's 200-250 trading range of 3 to 4 years now.
Update from N1 Singer: https://www.research-tree.com/companies/uk/real-estate-investment/grainger-plc/research/n-1-singer-grainger-final-results-in-line-further-progress-on-prs-investment-pipeline/CC65_6_1
"Grainger has issued a trading update covering the 10 month period YTD to the end of July. Rents have continued to grow on both new lets and renewals, whilst sales completed year to date, and in the pipeline, are as expected. Sales transactions are performing well with prices realised 7.7% above the last valuation, and no material impact post-Referendum. We note continued progress towards strategic goals: PRS investment and capturing cost savings. We leave our forecasts unchanged. We continue to believe that Grainger should trade at a small premium to NNNAV given the opportunity in the PRS pipeline our 320p target price equates to 1.1x P/NNNAV."
Residential landlord Grainger (GRI) has improved efficiency and focus and is making good progress against its targets.
Numis analyst Chris Millington retained his buy recommendation and target price of 287p on the shares, which rose 2% to 232.5p yesterday.
Graingers first-half results show good progress against all the targets set out at the recent strategy day, with most noticeable progress in the private rented sector pipeline, he said.
In our view the 24% discount to net asset value Grainger trades on, fails to recognise the benefits that will come from switching to a more income-focused private rented sector model and that the business is better placed to capture this value.
He added that Grainger was emerging at the forefront of a growing private rented sector market, which offers greater stability of income/cashflows and reduces volatility in relation to house price fluctuations. "
"Buy! Buy! TalkTalkLast year's very public cyber-attack inflicted heavy damage on LSE:TALK:TalkTalk's share price, although a recovery, which began just last week, looks promising.In a third-quarter update, chief executive Dido Harding told us the ..."
"As the UK's largest listed residential property owner and manager, LSE:GRI:Grainger has prospered during the latest housing boom. In the past three years its share price has tripled, and with uncertainty surrounding the outcome of the UK general ..."
Crystal Amber declared a 3.08pc shareholding in Grainger, sending shares in the residential property company higher.
Residential property company Grainger jumped after activist investor Crystal Amber declared a 3.08pc shareholding in the company.
Rumours surfaced at the weekend the activist fund was interested in realising £500m of Graingers future profits, known as the reversionary surplus, which includes, but is not exclusive of, regulated tenancies.
ity analysts invariably use net asset value per share to work out how much property firms are worth. This involves taking the value of a portfolio and dividing that by the number of shares in issue.
Graingers underlying NAV per share was 242p last year and brokers expect it to rise to at least 258p in 2015, with further gains for 2016. Many stocks trade at a discount to NAV, but Graingers is not only higher than most it is much higher now than in the recent past.
Midas verdict: Grainger shares were 250p last spring but have fallen to 194p on fears about the housing market and political uncertainty ahead of the General Election. The reaction seems overdone. Virtually all its homes are at the reasonably priced end of the market and even its London-based properties are worth less than £500,000 on average. The trading statement could reassure nervous followers. Grainger is well with the times. Buy."
Grainger plc (LON:GRI) was upgraded by analysts at JPMorgan Cazenove from an "underweight" rating to a "neutral" rating. They now have a GBX 205 ($3.18) price target on the stock, up previously from GBX 170 ($2.64).
He was not motivating it as a yield play .
I missed the start of the interview , but It seemed to me he was linking the healthy London property valuations to Graingers portfolio concluding Graingers property assets are worth a lot more than is in the price .
I have been watching Grainger for some time now , but I didn't get the share price weakness I wanted for an entry point . So today I did take an initial stake at around 146p and was glad to see the underlying strength continue through the day finishing higher .
I too normally want a higher yield , but the high yield theme is becoming stretched and so I have started to look at other areas , one of which is property .
You can also combine both property and yield ..... check Schroeder Global Income Maximiser yielding about 7% or so , which also gives you global exposure and not just UK which is a bit limited .
Andy Brough is impressed about the underlying strength of London property prices , and pointed to the strong demand and high prices being paid for modest properties at London auctions
Rusty out of interest, what exactly was he tipping about Grainger?
I like the company (a lot) but am not invested at the current sp level. The yield is just a tad over 1.3% which is very poor when there are circa 4-5% yields around in decent companies.
I know that there is huge latent value in this company from its protected tenancy freeholds but 1.3%? I need a bit more than that if I'm sitting around waiting for a div hike or possible t/o to happen!
Andy Brough who runs the Schroeder Mid Cap fund tipped Grainger just before 8am this morning whilst being interviewed on Bloomberg. He is impressed about the underlying strength of London property prices , and pointed to the strong demand and high prices being paid for modest properties at London auctions .
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