Slide 1: Record performance with 4-year growth locked-in and de-risked
Record performance with 4-year growth locked-in and de- risked Full Year Financial Results for the year ended 30 September 2022 17 November 2022
Slide 2: Agenda
Agenda Originate Invest Operate 1. Overview Helen Gordon Chief Executive 2. Financial results Rob Hudson Chief Financial Officer 3. Market and business update Helen Gordon Chief Executive 4. Summary and Q&A Helen Gordon Chief Executive 5. Appendix Grainger plc | www.graingerplc.co.uk 2
Slide 3: Record performance with 4-year growth locked-in and de-risked
Record performance with 4-year Originate Invest Operate growth locked-in and de-risked +22% NRI growth delivered +4.7% L4L rental growth 98% Gilders Yard, Birmingham Pin Yard, Leeds PRS occupancy 25.5% 63.5% Stabilised GtN Retention £3.2bn £1.2bn Operational portfolio Secured pipeline 9,669 4,427 Op
Slide 4: Record performance driven by operational momentum
Record performance driven by Originate Invest Operate operational momentum High occupancy, strong demand and rental growth Net rental income Rental growth Adjusted earnings EPRA NTA a Dividend a +22% +4.7% +12% +7% +16% (L4L, FY) £86.3m £93.5m 317pps 5.97pps +5.5% in H2 Financial highlights: Strateg
Slide 5: Current trading (post year end)
Current trading (post year end) Originate Invest Operate Strong operational performance continues into Q1 Leasing (PRS) Sales Pipeline +5.5% L4L rental growth Vacant sales of £6m to 14 projects on site and in PRS date in FY23 progressing well Successful leasing of Typically c.40% of Cons
Slide 6: A resilient business in a resilient sector
A resilient business in a resilient sector Originate Invest Operate Structural Drivers Grainger Occupational Drivers Investment Drivers Strong balance sheet High quality assets Accelerating rental & funding in proven locations Increasing demand growth Leading operating Deep customer Increasing Histo
Slide 7: Growth de-risked and locked-in
Growth de-risked and locked-in Originate Invest Operate 4 years of growth de-risked, funded and locked-in via committed pipeline Further optionality over timing of the secured but not yet committed direct development pipeline OPERATIONAL PORTFOLIO* PRS (Build to Rent) PIPELINE 9,669 homes, £3.2bn 6,
Slide 8: A market-leading business with growth locked-in, in a sector with high demand
A market-leading business with growth Originate Invest Operate locked-in, in a sector with high demand Income up by +22% Strong balance sheet LfL rental growth of +4.7% and LTV at 33% and 97% hedged growing Debt refinanced for 6 years Strong lease up of new launches £663m of headroom Robust customer
Slide 9: 2. FY22 Financial Results
2. FY22 Financial Results Rob Hudson Chief Financial Officer
Slide 10: Financial highlights
Financial highlights Originate Invest Operate Net rental income up +22% as the pipeline delivers and rental growth accelerates Income performance Income FY21 FY22 Change Another strong operational performance Rental growth (like-for-like) 1.0% 4.7% +372 bps driven by rapid lettings and pipeline deli
Slide 11: Income statement
Income statement Originate Invest Operate Pipeline delivery accelerating income and earnings growth Key highlights: FY21 FY22 Change Strong occupancy and rental growth Net rental income £70.6m £86.3m +22% momentum Profit from residential sales £67.5m £63.3m (6)% Record occupancy continues at 98% Pro
Slide 12: Net rental income
Net rental income Originate Invest Operate Strong operational performance driven by new openings and 4.7% LfL rental growth, with lettings outlook positive for FY23 +22% +£3.9m £86.3m +£2.8m +£12.0m £70.6m £(3.0)m Total L4L +4.7% PRS L4L +4.8% - New lets +5.6% - Renewals +4.1% Regs L4L +4.6% FY21 Ne
Slide 13: Valuation Summary
Valuation Summary Originate Invest Operate Capital Total Valuation Portfolio Homes PRS grown to 73% of the total Value movement* operational portfolio, from 23% in 2016 £m £m % and 69% in 2021 PRS Portfolio PRS portfolio valued on a rent / yield London & SE 3,469 1,262 37 3.1% basis and Reg portfoli
Slide 14: EPRA Net Asset Values
EPRA Net Asset Values Originate Invest Operate EPRA NTA per share growth of 7% £m pence per share Property assets (market value) 3,773 508 Net liabilities (1,303) (175) EPRA Net Reinstatement Value (NRV) 2,470 333 Tax – deferred & contingent – trading assets (111) (16) EPRA Net Tangible Assets (NTA)
Slide 15: EPRA Net Tangible Assets (NTA)
EPRA Net Tangible Assets (NTA) Originate Invest Operate Strong valuation growth and increasing net rent drives NTA growth of 7% +21p +1p (3)p +X% +7% (5)p 3p +13p (5)p (5)p Total +4.4% PRS +4.6% Regs +4.1% 317p Dev +4.0% 297p * Transfer of properties from trading property to investment property gene
Slide 16: Net debt
Net debt Originate Invest Operate Significant investment in pipeline delivery, with £182m of disposals Operating cashflow Net investment £(94)m +£237m +£40m £1,262m +£347m +£37m +£43m £(72)m +£69m £(110)m £(134)m* £1,042m Disposals £(182)m^ Net debt increased to £1.26bn reflecting investment in deli
Slide 17: Balance sheet, funding and hedging: strong, secured and de-risked
Balance sheet, funding and hedging: Originate Invest Operate strong, secured and de-risked No significant Cost of debt refinancing until 2027 FY22 Successfully refinanced bank 97% hedged with a hedge RCF and term debt, maturity of 6 years Net debt £1,262m increasing to £575m from £500m and maintaini
Slide 18: Liquidity and capex
Liquidity and capex Originate Invest Operate £663m headroom fully funding our committed pipeline Strong liquidity Current liquidity position (£m) Strong headroom of £663m from cash and available facilities Committed capex fully funded Capital expenditure plans more than covered by 663 headroom 479 T
Slide 19: Passing net rent and earnings progression
Passing net rent and earnings progression Originate Invest Operate Significant growth in NRI and earnings secured Secured not Planning / Legals Committed pipeline £953m committed £241m ** £599m +2.0x +£27m £175m +£11m £138m +£10m £148m +1.7x +£10m +£13m +£13m £86m £91m Committed pipeline fully funde
Slide 20: Financial summary
Financial summary Originate Invest Operate Record performance, strong operational momentum, earnings outlook unchanged Net rental income growth of +22% driven by new launches, strength of letting demand and rental growth Dividend per share up +16% as pipeline delivers Earnings outlook unchanged: Com
Slide 21: 3. Market and business update
3. Market and business update Helen Gordon Chief Executive
Slide 22: Market outlook
Market outlook Originate Invest Operate A resilient business in a growth sector Positive Positive market GraingerFY21 is well structural trends outlook positioned Acute supply & Rising mortgage costs a High quality, modern demand imbalance positive for rental properties, with lower demand running co
Slide 23: Positive structural trends
Positive structural trends Originate Invest Operate Vast opportunity to grow market share Demand broadening across age groups BTR only 1.5% of homes in 5m UK private-rented sector PRS households (‘000s) 1,600 +6% 2010/11 2020/21 1,200 +21% +50% 800 -4% +111% Build-to- +39% rent 400 - 16-24 25-34 35-
Slide 24: Positive PRS market outlook
Positive PRS market outlook Originate Invest Operate Leasing market continues to strengthen Rising mortgage rates will drive rental demand Rightmove – time-to-let - days Average mortgage payment* vs average rent (UK) 40 £1,500 35 30 £1,000 25 20 £500 Mortgage payments exclude repairs/depreciation, 1
Slide 25: Grainger well positioned
Grainger well positioned Originate Invest Operate Grainger focused on young professional demographic Grainger’s customers are paying affordable rents Proportion of residents by age in Grainger’s PRS portfolio Proportion of household income spent on rent 33% 50% 32% 40% 30% 29% 29% 30% 28% 20% 10% 0%
Slide 26: An operating model designed for insight, agility and out performance
An operating model designed for Originate Invest Operate insight, agility and out performance Greater control Investing for the and visibility on long term, through the delivery of our cycles pipeline Focus on the best Experienced in-house locations (Cities development team Strategy) Large market Hi
Slide 27: Our strongest year of leasing performance driven by our best-in-class in-house operating platform
Our strongest year of leasing performance driven Originate Invest Operate by our best-in-class in-house operating platform Exceptional leasing In-house operating platform FY21 Strong demand and lease up for new launches Acquisitions and Development Data & Insight Achieved rents well ahead of underwr
Slide 28: Continually enhancing our customer experience
Continually enhancing our customer Originate Invest Operate experience Our Customer Experience Programme delivers improved customer satisfaction: Resident App Service Style Living a greener life Highlights Rolled out across our entire training PRS portfolio Supporting residents in NPS up to 34 (+1
Slide 29: Driving responsible business
Driving responsible business Originate Invest Operate Environment People and Social impact 87% -26% “Living a Donated six 572 PRS portfolio with Reduction in greener homes for free for a community & EPC ratings A-C year to six Ukrainian resident events Scopes 1 & 2 emissions per £m life” Resident Re
Slide 30: Disciplined research-led investment decisions
Disciplined research-led investment Originate Invest Operate decisions High demand / supply High demand / supply Schemes secured fundamentals and fundamentals and low growth potential high growth potential Target locations Oxford Exeter Under review Southampton London Cardiff Not under consideration
Slide 31: The UK's leading rental portfolio
The UK’s leading rental portfolio Originate Invest Operate New schemes delivered since 2016, adding to our national private rental portfolio BTR schemes delivered since 2016 High quality, energy efficiency, mid market homes in strong investment locations National coverage 18 new BTR assets 9 cities
Slide 32: New projects secured in FY22
New projects secured in FY22 Originate Invest Operate £23m potential annual net rental income sourced Three new projects started onsite in the year Merrick Place, Redcliff Quarter, West Way Square, Southall Bristol Oxford 401 homes 468 homes1 150 homes Potential £6m NRI Potential £6m NRI Potential £
Slide 33: Excellent leasing performance
Excellent leasing performance Originate Invest Operate £23m passing net rental income secured with £17m to come from schemes launching in 2023 Fully let Fully let Fully let Fully let Fully let Launched Derby Southampton London Leeds Birmingham Milton Keynes Newbury (Ph2) Guildford Newcastle 2021 +£1
Slide 34: Summary & conclusion
Originate Invest Operate Summary & conclusion Record performance and 4 years of growth locked-in, funded and de-risked Record performance Record rental income Record lease up in new schemes Record occupancy Record rental growth Record retention Record customer satisfaction PRS a structur
Slide 35: Thank you
Thank you Q&A Gilders Yard, Birmingham
Slide 36: Appendix
Originate Invest Operate Appendix Contents Portfolio overview Page 37 1. Property information Our competitive advantage Page 38 Fully funded committed pipeline Page 39 Portfolio summary and movements Page 40-41 Portfolio geographical breakdown Page 42-43 PRS Portfolio Pages 45-46 Secured pipeline sc
Slide 37: Portfolio overview
Portfolio overview Originate Invest Operate Regulated tenancies PRS Customer has the right to live in the property for the Leases with typical duration of 1-3 years rest of their life Market rents Sub-market rent set by Valuation Office Agency Returns based on Upon vacancy Grainger sells the propert
Slide 38: Our competitive advantage
Our competitive advantage Originate Invest Operate Maximising the opportunity for growth More than £3bn Multiple routes to source opportunities sourced since providing greater flexibility than many 2015 competitors Forward Proven track record of sourcing Fund success Tenanted Direct Acquisition Deve
Slide 39: Fully funded committed pipeline
Fully funded committed pipeline Originate Invest Operate Disciplined capital management underpinning growth Opening Headroom** Existing Committed Capex* Cash from operations*** Outer Pipeline Capacity £1,113m £1,113m £963m £963m £450m £813m £813m £300m £634m £150m £484m £663m £663m £334m £184m £663m
Slide 40: Portfolio summary
Portfolio summary Originate Invest Operate Market value Net Rent Units £m £m Net yield Residential – PRS 7,384 2,189 77 3.7% Residential – regulated tenancies 1,741 812* 14 1.8% Residential – mortgages (CHARM) 390 69 n/a n/a Forward Funded – PRS work in progress - 466 - - Development work in progres
Slide 41: Portfolio movements
Portfolio movements Originate Invest Operate Sep21 Additions Disposals Transfers Valuation Sep22 £m £m £m £m £m £m PRS London & SE 1,228 26 (7) (22) 37 1,262 Regions 796 2 (10) 80 59 927 Total PRS 2,024 28 (17) 58 96 2,189 Regs London & SE 726 4 (72) - 22 680 Regions 170 1 (50) - 11 132 Total Reg 89
Slide 42: Portfolio geographical breakdown
Portfolio geographical breakdown Originate Invest Operate PRS & Regulated tenancies (FY22) PRS Regulated tenancies Region Units Market Change Net Units Market Change Net value vs FY21 yield value vs FY21 yield £m £m London & SE 3,469 1,262 +3.1% 3.2% 1,101 679 +3.5% 1.6% South West 514 213 +5.0% 4.0
Slide 43: PRS portfolio by geography
PRS portfolio by geography Originate Invest Operate Portfolio by units Portfolio by rent (£m) Key Central / Inner London 16% 17% 12% 22% Outer London South East 12% 21% 26% South West 18% 18% 4% East and Midlands 4% 7% 11% 12% North West Other Regions Portfolio by value (£m) Post secured pipeline by
Slide 44: Building our PRS portfolio across the UK
Building our PRS portfolio across the UK Originate Invest Operate Research led investment strategy and asset clustering to LEEDS & SHEFFIELD 1,095 deliver operational efficiencies NEWCASTLE 380 Operational 811 MANCHESTER 1,612 Operational 380 (inc Brook Place and The Headline) (inc The Forge) Pipeli
Slide 45: PRS portfolio
PRS portfolio Originate Invest Operate Top assets by annual ERV (>£1.5m) Unit mix Studio / Area Annual # Asset City Postcode Units 1 bed 2 bed 3 bed Sq ft ERV 1 Clippers Quay Manchester M50 3AF 510 162 290 58 371,622 £7.3m 2 The Filaments Manchester M3 5PF 376 98 235 43* 246,416 £6.1m 3 The Forge Ne
Slide 46: PRS portfolio – rent levels
PRS portfolio – rent levels Originate Invest Operate Rent per calendar month (% of units) £1500+ 16.9% 8.1% £1000-1500 11.3% 25.1% £750-£1000 7.3% 18.3% Under £750 4.3% 8.7% 75% below £1,500 pcm London & South East Regions Grainger plc | www.graingerplc.co.uk 46
Slide 47: Secured pipeline schedule
Secured pipeline schedule Originate Invest Operate (1 of 2 pages) Gross No. Targeted Est. Grainger Spend yield Name units launch Status investment to date target Forward funding / acquisition Enigma Square, Milton Keynes* 261 Early FY23 Completed £63m £63m c.6.25% The Copper Works, Capital Quarter,
Slide 48: Secured pipeline schedule
Secured pipeline schedule Originate Invest Operate (Continued from previous page) Est. Gross Targeted Grainger Spend to yield Name No. units launch Status investment date target Direct development** Weavers Yard, Newbury, West 198 Early phases Part complete £52m* £49m* c.6.25% Berks* launched Direct
Slide 49: Secured pipeline projects
Secured pipeline projects Originate Invest Operate 17 high quality PRS schemes Completed post YE Secured Secured in FY22 Forward funding / Acquisitions Enigma Square, The Copper Works Fortunes Dock, The The Barnum, Barnum, The Mint, Milton Keynes Capital Qtr, Canning Town 2, Queens Queens Rd, Rd, Gu
Slide 50: ESG: Securing our long-term future
ESG: Securing our long-term future Originate Invest Operate 4 long-term ESG Environment: 1 Net zero carbon for Scopes 1 & 2 emissions by 2030 commitments Enhance investment decisions further by Assets: 2 integrating ESG considerations People: 3 Measure and deliver positive social value 4 Diverse wor
Slide 51: Delivering our ESG & Responsible Business ambitions
Delivering our ESG & Responsible Business Originate Invest Operate ambitions Net carbon Sustainable Making a positive A diverse and reduction investing social impact inclusive business Net zero carbon for our Integrate ESG into all Deliver a positive social Ensure our workforce is commitments operat
Slide 52: Market value balance sheet
Market value balance sheet Originate Invest Operate FY21 FY22 Market value balance sheet (£m) Residential – PRS 2,024 2,189 Residential – regulated tenancies 896 812 Residential – mortgages (CHARM) 72 69 Forward Funded – PRS work in progress 244 466 Development work in progress 146 182 Investment in
Slide 53: Segmental EPRA NTA balance sheet
Segmental EPRA NTA balance sheet Originate Invest Operate FY21 FY22 EPRA NTA market value PRS Reg* Other Group PRS Reg* Other Group balance sheet (£m) Investment property 2,156.2 23.0 - 2,179.2 2,753.5 22.4 - 2,775.9 Investment in joint ventures and 26.9 - 18.0 44.9 37.1 - 18.1 55.2 associates Finan
Slide 54: EPRA Earnings
EPRA Earnings Originate Invest Operate FY21 FY22 Adjusted Adjusted Adjusted Adjusted £m Adjustments EPRA Adjustments EPRA Earnings Earnings earnings earnings Net rental income 70.6 - 70.6 86.3 - 86.3 Profit from sales – trading property 67.8 (56.0) 11.8 63.6 (61.1) 2.5 Profit from sales – investment
Slide 55: Segmental income statement
Segmental income statement Originate Invest Operate FY21 FY22 £m PRS Reg* Other Group PRS Reg* Other Group Net rental income 51.9 18.4 0.3 70.6 70.8 15.2 0.3 86.3 Profit from sales – trading property (0.1) 66.1 1.8 67.8 (0.1) 61.7 2.0 63.6 Profit from sales – investment 1.3 0.2 - 1.5 1.6 0.1 - 1.7 p
Slide 56: EPRA NRV, EPRA NTA and EPRA NDV
EPRA NRV, EPRA NTA and EPRA Originate Invest Operate NDV FY21 FY22 EPRA NRV EPRA NTA EPRA NDV EPRA NRV EPRA NTA EPRA NDV £m IFRS Equity attributable to shareholders 1,739.0 1,739.0 1,739.0 1,966.8 1,966.8 1,966.8 Diluted NAV 1,739.0 1,739.0 1,739.0 1,966.8 1,966.8 1,966.8 Include: Revaluation of oth
Slide 57: Property Reclassification
Property Reclassification Originate Invest Operate Reclassification of long term hold properties from trading stock to investment properties for REIT conversion. FY22 Property FY22 (Pre-reclass) Reclass (Reported) Consolidated income statement impact £m £m £m Net valuation gains on investment proper
Slide 58: Debt facilities
Debt facilities Originate Invest Operate Balance sheet, funding and hedging: strong, secured and de-risked Facility Lender Size Drawn Maturity Core Facilities: Corporate Bond Listed £350m £350m Apr 2028 Corporate Bond Listed £350m £350m Jul 2030 Revolving Credit Facility HSBC, NatWest, Barclays £392
Slide 59: Pin Yard
Pin Yard Originate Invest Operate Holbeck Village, Leeds Asset Overview Socially responsible investment Forward fund, completed March 22 Walk 216 high quality apartments score 83 (130 x 1 beds, 70 x 2 beds, 16 x 3 beds) c. 2,500 sq ft of internal residents amenity Onsite resident services Residents
Slide 60: Weavers Yard
Weavers Yard Originate Invest Operate Newbury, Berkshire Asset Overview Socially responsible investment Direct Development, first phase completed April 22 Walk 232 high quality apartments and townhouses score 96 (1 x Studio, 78 x 1 beds; 129 x 2 beds, 24 x 3 beds) c,.8,500 sq ft of commercial space
Slide 61: Gilders Yard
Gilders Yard Originate Invest Operate Jewellery Quarter, Birmingham Asset Overview Socially responsible investment Direct Development, completed Aug22 Walk 158 high quality apartments score 95 (86 x 1 beds; 72 x 2 beds) c. 6,500 sq ft of commercial space c.2,700 sq ft of internal residents amenity O
Slide 62: Enigma Square
Enigma Square Originate Invest Operate Milton Keynes Asset Overview Socially responsible investment Forward fund, launched Nov 2022 Walk 261 high quality apartments score 78 (13 x Studios, 182 x 1 beds; 54 x 2 beds, 12 x 3 beds) c.8,000 sq ft of commercial space c.5,500 sq ft of internal residents a
Slide 63: Future reporting dates
Future reporting dates Originate Invest Operate 2023 AGM / Trading update 8 February Half year results 11 May Trading update September Full year results 22 November Grainger plc | www.graingerplc.co.uk 63