Grainger trading well in slowing housing market
Aug 11 2010 By Karen Dent, The Journal
PROPERTY giant Grainger says it is trading well even though the bounce back in the housing market is starting to slow again.
Britain’s biggest residential landlord, based in Newcastle, completed £49.4m of residential sales in the four months to the end of July, taking total sales for the last 10 months to £128.4m. It has a further £26.4m of business either in solicitors' hands or with contracts exchanged.
And after beginning to buy residential property again after the recession, Grainger has acquisitions worth £67.6m in the pipeline.
Chief executive Andrew Cunningham said: “We continue to make strong progress in growing and strengthening the company and its market leading position.
“Our portfolio is continuing to prove to be resilient and we are trading well, despite price growth in the general housing market slowing in the last few months reflecting the economic uncertainty.
“Furthermore we have also taken advantage of market conditions to make well-priced acquisitions which we anticipate will produce good levels of return for our investors in the future.”
The business said it had forecast that house price growth would slow during the early summer and it was buying properties that it expected to give decent returns.
On the sales front, the group sold 593 vacant units for £90.1m at a sales margin of 42.6%, compared to 625 units for £86m at a margin of 35.5% last year.
Grainger said: “The improvement in margins reflects the over all increase in prices we have achieved.
“This strong sales performance reflects the ongoing resilience of our trading portfolios, even in uncertain economic conditions.
“Although the level of general house price growth we saw in late 2009 and early 2010 has begun to slow, our portfolio continues to perform well.
“This is due to its low average value per property, its geographic diversity and the unrefurbished condition of many of the units we sell which provide attractive development opportunities for a potential purchaser.”
Grainger has also completed its £34.6m takeover of equity release company Sovereign Reversions.
