Grainger plc Regulatory News (GRI)

14 October 2021

Grainger plc

("Grainger", the "Group", or the "Company")

POST-CLOSE FY21 TRADING UPDATE

Strong lettings recovery and investment momentum

· Exceptional lettings performance in late H2 2021

· Lease up of new schemes ahead of underwriting

· Occupancy recovery well progressed, now 94%

· 95% occupancy expected imminently

· Major £141m acquisition secured

· Investment market strength will support asset recycling and valuations

· Successfully raised £206m of new equity to bring forward growth plans

Grainger plc, the UK's largest listed provider of private rental homes with a c.£3bn operational portfolio and a £2bn pipeline, today provides an update on trading in respect of its financial year ended 30 September 2021. The Company today also announces a major acquisition of Merrick Place, a build-to-rent development scheme, on a forward funding basis for £141m. (Please see the separate corresponding announcement for further details of today's acquisition.) The Company will announce detailed annual financial results on 18 November 2021.

Helen Gordon, Chief Executive of Grainger, said:

"With the reopening of the UK and a return to normal post the pandemic, we have delivered an exceptional lettings performance. In the run up to and including September we delivered week-on-week record lettings across the portfolio on both our stabilised assets and our five newly launched schemes across the country. We are on track to deliver 95% occupancy across our portfolio shortly and ahead of target, while our newly launched schemes are all leasing up significantly ahead of underwriting.

"The UK private rented sector has proven its resilience over the past 18 months, and we are very excited by current opportunities for investment. The sector's continued attractiveness as an asset class has led us to bring forward our growth plans and in early September we successfully raised £209m of gross proceeds with strong support from our shareholders in a heavily over-subscribed placing. In addition to the acquisition of the stabilised asset, The Forge (£57m), and the forward funding scheme Becketwell, Derby (£38m), we have made good progress on deploying the remainder of the proceeds from the equity placing with the recent acquisition of Merrick Place in West London for £141m."

Record lettings performance

Our market-leading operational platform continues to deliver value:

· We are driving a swift recovery in occupancy on our c.7,000-home PRS portfolio and at the end of September have returned to 94% occupancy.

· We expect to return to a stabilised occupancy of c.95% shortly

o Lets agreed each week continue to remain at elevated levels

o Coupled with strong new lets performance, our focus on customer retention is supporting swift occupancy recovery

o Customer enquiry levels remain very high, well above pre-pandemic normal levels

o We are successfully recovering occupancy on those schemes most impacted by Covid lockdowns and restrictions over the past 18 months, for example:

§ Argo Apartments in Canning Town, East London (132 homes) experienced exceptional volumes in late August and through September with 49 lets agreed since July, and is back to full occupancy with a waiting list

§ Millet Place in Pontoon Dock, East London (154 PRS homes), which launched in May 2020 with initial lease up significantly slowed by Covid, has seen 85 lets agreed in the past two months, resulting in over 95% occupancy at rents in-line with our original underwriting

· We are delivering exceptional lettings performance on our newly launched schemes, comprising a total of c.1,000 rental homes, significantly ahead of underwriting

o As previously reported, Gatehouse Apartments (132 homes) was fully let in 3.5 months, compared to our typical c.12-month lease-up expectations in our underwriting

o The Headline in Leeds (242 homes) is 95% let since launching in late July

o The Filaments in Manchester (376 homes) is 87% let in six months

o Apex Gardens in London (163 PRS homes) is 58% let since launching in July this summer

o Windlass Apartments in London (108 homes) is 60% let since launching in July this summer

· Total like-for-like rental growth continues, building on positive growth in H1.

o Total like-for-like rental growth of 1.0%, across both our regulated tenancy and PRS portfolios for the 12-month period to end of September

o PRS like-for-like rental growth of 0.3% for the same period, which takes account of rental incentives used over the period to support occupancy recovery, which have now largely concluded.

o Before incentives, PRS like-for-like rental growth would have been 1.6% for the period. As rental incentives are no longer needed and rental growth is strengthening, we expect to see a return to normal levels of rental growth

o Regulated tenancy like-for-like rental growth of 3.6% for the period

Major £141m acquisition and positive pipeline progress

· Supported by our recent successful equity raise on 2 September 2021, in addition to the acquisition of The Forge, a stablised asset in Newcastle, and Becketwell, a build-to-rent development in Derby where construction has now commenced, we have recently secured a 401-home build-to-rent scheme, Merrick Place, in West London for £141m on a forward funding basis (announced on 14 October 2021)

· In addition, we are progressing well on further opportunities within our Planning & Legal Pipeline

Strong investment market and sales performance

· The strong investment market in both capital values and rental yields is supporting our asset recycling programme and is expected to feed into valuations for the year in line with expectations

· We have continued to deliver a strong sales performance across both vacant, ex-regulated tenancy properties and tenanted, investment sales from our asset recycling activity

ESG achievements and Responsible Business Committee to be established

· Appointment of Carol Hui as a Non-Executive Director to the Board during the period and plan to establish a Responsible Business Committee, chaired by Carol, which will oversee our leading ESG efforts

· Achieved a Gold Award for Sustainability Best Practice Reporting by EPRA

· Acknowledged as a Top Performer for ESG Disclosure in UK Residential category by GRESB

· Prime status achieved for Corporate ESG rating by ISS

· Grainger is a sponsor of the COP26 Built Environment Virtual Pavilion

Next reporting date

· Grainger will announce its full year financial results for the twelve months to the end of September 2021 on Thursday, 18 November 2021. The management team of Grainger will present the results at 08h30 GMT on this date and joining details will follow.

-ENDS-

For further information:

Grainger plc

Helen Gordon / Rob Hudson / Kurt Mueller

London Office Tel: +44 (0) 20 7940 9500

Camarco (Financial PR adviser)

Ginny Pulbrook / Geoffrey Pelham-Lane

Tel: +44 (0) 20 3757 4992/4985