Grainger Plc · LSE:GRI
Grainger — Investor Day (September 2019)
49 slides from Grainger's investor day presentation, Sep 27, 2019
Slide 1: Creating connections that deliver sustainable growth
Creating connections that deliver sustainable growth Capital Markets Day Hawkins & George at Finzels Reach, Bristol 27 September 2019
Slide 2: Today’s agenda
Today’s agenda Originate Invest Operate 11am Presentation Approx. 12.30 Tour of Hawkins & George Approx 1.30pm Lunch at Left Handed Giant Creating connections that deliver sustainable growth 2
Slide 3: Creating connections that deliver sustainable growth
Originate Invest Operate Creating connections that deliver sustainable growth We deliver resilient growth through the connections that we make both in our business and in the community. Creating connections that deliver sustainable growth 3
Slide 4: Presentation agenda
Presentation agenda Originate Invest Operate 1. Introduction & creating connections Helen Gordon 2. Achieving a pipeline of leading investments Andrew Saunderson a) Securing the best schemes Julia Bevan b) Working with Grainger - A partner’s perspective Gavin Bridge, Cubex 3. Connecting with the pub
Slide 5: The Grainger Team
The Grainger Team Originate Invest Operate Helen Gordon Vanessa Simms Chief Executive CFO Andrew Saunderson Julia Bevan Director of Investments Acquisitions Manager Michael Keaveney Anish Thobhani Director of Land & Development Director of Customer Operations Guest Gavin Bridge Cubex Land Creating c
Slide 6: Portfolio and pipeline overview
Portfolio and pipeline overview Originate Invest Operate Operational portfolio and pipeline OPERATIONAL PORTFOLIO PIPELINE 8,878 units*, £2.6bn* 8,608 units, £1.9bn Progress in the period +£88m +£62m +£230m HY19 £1,157m £1,431m* £734m £603m c.£600m** Regulated tenancies PRS Secured pipeline Planning
Slide 7: Passing rent progression
Passing rent progression Originate Invest Operate Dividend growth underpinned by NRI growth Secured pipeline: £734m Planning / legals: £603m TfL: £600m +£24m £161m +2.4x +£13m +£14m +£15m £110m +1.6x +£9m +£10m +£8m £67m +£1m £32m *TfL Partnership – indicative estimate of Grainger’s unlevered 51% sh
Slide 8: Our business model
Our business model Originate Invest Operate Designed to deliver sustainable returns Public sector partnerships City targeting Repeat business Asset clusters Building design Asset selection improvements Repeat business Faster, more efficient delivery Robust underwriting Grow rents Simplify and focus
Slide 9: Strong track record of delivery
Strong track record of delivery Originate Invest Operate We said… (in January 2016) We delivered… Nearly double our investment target with £1.6bn to Target of £850m PRS investment by 2020 date (cumulative) Grow net rental income More than doubled NRI (HY19) Gross to net reduced from 31% (FY15) to 26
Slide 10: Making connections that deliver sustainable returns
Making connections that deliver Originate Invest Operate sustainable returns Asset clusters Buildings Technology Partners Communities Creating connections that deliver sustainable growth 10
Slide 11: Achieving a pipeline of leading investments
Achieving a pipeline of leading investments Andrew Saunderson
Slide 12: Research backed investing
Research backed investing Originate Invest Operate Regular reports and and analysis to inform investment decisions City Demographic Macro economic Micro economic targeting analysis analysis analysis Supply Customer Competition Lifestyle trend analysis targeting tracking analysis Topical research to
Slide 13: Investing in strong rental growth markets
Investing in strong rental Originate Invest Operate growth markets Targeting the largest PRS locations with the best proven rental growth prospects Annual review of cities’ investability Rigorous investment analysis City Champions Strong sourcing ability Robust underwriting Analysed 62 cities Using
Slide 14: A national opportunity
A national opportunity Originate Invest Operate Yorkshire Post, Leeds Fabrik, Leeds Clippers Quay, Eccy Village, Sheffield Greater Manchester Silbury Blvd, Milton Keynes Gore Street, Greater Manchester YMCA, Milton Keynes Gilders Yard, Birmingham Canning Town, London Exchange Square, Hale Wharf, Lon
Slide 15: Our East London Cluster
Our East London Cluster Originate Invest Operate Asset clusters Abbeville Apartments, Barking 100 units Operational Argo Apartments, Canning Town g 134 units Operational Millet Place, Pontoon Dock 236 units* Completing early 2020 Hallsville Quarter, Phase 3, Canning Town 146 units Completing 2022 Pr
Slide 16: Working with the right partners
Working with the right partners Originate Invest Operate Partners Why? Repeat Sourcing business opportunities Lower Faster transaction costs transactions Improved Smoother design delivery Contractor Contractor Developer /Developer Two schemes Two schemes Four schemes Bouygues Manchester Sir Robert B
Slide 17: Sourcing acquisition opportunities
Sourcing acquisition opportunities Originate Invest Operate Grainger known as a trusted party Trusted Easy to do business with Expert in PRS Internally funded Strong balance Financially sound sheet Strong financial discipline Grainger key point person on each target city City Champions Responsible f
Slide 18: Securing the best schemes
Securing the best schemes Julia Bevan Acquisitions Manager
Slide 19: Why we are targeting Bristol
Why we are targeting Bristol Originate Invest Operate Major employers: Hawkins & George Deloitte PWC Channel 4* University of Bristol HMRC* Cabot Circus 30% High grad retention g 11 years Bristol Temple Meads Avg time to save for a home Competitor sites, under construction * New relocations
Slide 20: Hawkins & George
Hawkins & George Originate Invest Operate At Finzels Reach, Bristol Forward Funding project ‒ 194 apartments Developer: Cubex Contractor: Willmott Dixon c.£46m acquisition secured in Nov 2016 Completed in Summer 2019 Fully let in 3.5 months Creating connections that deliver sustainable growth 20
Slide 21: Delivering sustainable growth
Delivering sustainable growth Originate Invest Operate Connections Local market Delivery Agent Customer knowledge partner relationship insight Why? We know We see more more about We understand opportunities the market our customers Delivers sustainable returns Lower Better Faster Better acquisition
Slide 22: Working with Grainger – A partner’s perspective
Working with Grainger – A partner’s perspective Gavin Bridge, Cubex
Slide 23: Our success in partnering
Our success in partnering Mike Keaveney Director of Land & Development
Slide 24: Our Partners
Our Partners Originate Invest Operate London Besson Street, London > 3,000 homes London 7 sites, 162 homes c.300 homes *Completed* Wellesley, Hale Wharf, Pontoon Dock, Hampshire London London c.3,850 homes 108 homes 236 homes Market Street, Newbury 232 homes Creating connections that deliver sustain
Slide 25: Partnership schemes – Progress on site
Partnership schemes – Originate Invest Operate Progress on site Pontoon Dock, London London Pension Fund Authority Hale Wharf, Tottenham, London Canal & River Trust Newbury, West Berkshire West Berks Council, Network Rail, GWR Creating connections that deliver sustainable growth 25
Slide 26: Partnerships delivering sustainable returns
Partnerships delivering Originate Invest Operate sustainable returns Why focus on partnerships Supports growth in our pipeline Unlocks land opportunities Indicates trust, integrity and long term thinking Virtuous circle How do we deliver through partnerships? Analyse values Analyse needs Identify sy
Slide 27: Case Study: TfL Partnership
Case Study: TfL Partnership Originate Invest Operate Creating connections that deliver sustainable growth 27
Slide 28: Our initial concept
Our initial concept Originate Invest Operate Creating connections that deliver sustainable growth 28
Slide 29: Three key areas of connectivity within the TfL PRS Partnership
Three key areas of connectivity Originate Invest Operate within the TfL PRS Partnership Transport Technology Community Creating connections that deliver sustainable growth 29
Slide 30: Overview of the TfL Partnership
Overview of the TfL Partnership Originate Invest Operate Our Shared Vision To create quality rental homes for London in sustainable communities where people from all backgrounds are living, connecting and thriving. Our objectives Develop at least, 3,000 quality, well designed and An income-sharing m
Slide 31: Seven initial seed sites within the TfL PRS Partnership
Seven initial seed sites within the Originate Invest Operate TfL PRS Partnership Cockfosters Station c.400 rental homes Arnos Grove Station c.140 rental homes Limmo Peninsula Canning Town c.900 rental homes Woolwich c.500 rental homes Southall Sidings c.450 rental homes Nine Elms Station c.450 renta
Slide 32: Delivering a leading customer experience
Delivering a leading customer experience Anish Thobhani Director of Customer Operations
Slide 33: “Welcome to your new home…”
“Welcome to your new home…” Originate Invest Operate Operational insight Amenity design 23,000 PRS customers Wayfinding Marketing Pre-leasing Viewings 1.6m emails pa Lease negotiations Referencing Moving-in 140k calls pa Creating connections that deliver sustainable growth 33
Slide 34: Making connections through the customer journey
Making connections through Originate Invest Operate the customer journey Digital Social Skype & Online Online Dynamic Online Event marketing media FaceTime reservations payments pricing community management campaigns viewings choices Personalised ATTRACT CONVERT customer comms Website Virtual Paperl
Slide 35: Why we build a community
Why we build a community Originate Invest Operate Lower churn Greater retention More referrals Lower voids Less marketing Lower costs Lower gross to net High satisfaction Maximise net rental income Creating connections that deliver sustainable growth 35
Slide 36: Customer insight and feedback informing business decisions
Customer insight and feedback Originate Invest Operate informing business decisions Designing better buildings. Delivering better service. Delivering sustainable returns. Design Marketing Leasing Concierge & Facilities Customer building management service managers Customer Asset Renewals Rent Repair
Slide 37: Case study: Hawkins & George
Case study: Hawkins & George Originate Invest Operate Asset overview Performance to date Apartments Leasing velocity 194 5 104 studios one beds 60 deals a month 85 two beds 60 3.5 months to full lease up Amenities 8-10 move-ins per week Roof terrace and rooftop lounge Gym & co-working space Customer
Slide 38: CONNECT Platform: Enhancing returns through technology
CONNECT Platform Enhancing returns through technology Vanessa Simms, CFO
Slide 39: CONNECT: the market leading PRS technology platform
CONNECT: the market leading Originate Invest Operate PRS technology platform CONNECT will enable us to realise our transformational growth plans. It will bring together leading technologies with best-practice ways of working to improve outcomes for customers, colleagues and investors. Customer Opera
Slide 40: CONNECT: The Online Leasing Journey
Originate Invest Operate CONNECT Making renting easy The Online Leasing Journey Creating connections that deliver sustainable growth 40
Slide 41: The leasing journey
The leasing journey Originate Invest Operate Digital Social Skype & Online Online Dynamic marketing media FaceTime reservations payments pricing campaigns viewings choices ATTRACT CONVERT Website Virtual Paperless (direct to Online flat booking Credit Online tenancy customer) viewing system checks r
Slide 42: CONNECT: The MyGrainger App
Originate Invest Operate CONNECT Making renting easy The MyGrainger App Creating connections that deliver sustainable growth 42
Slide 43: Living with Grainger
Living with Grainger Originate Invest Operate Online Event community management Personalised ATTRACT CONVERT customer comms Measuring customer satisfaction Account management Renew Maintenance tenancy requests & tracking Recommend Online amenity Grainger online booking Move within the Refer a Graing
Slide 44: Our platform components
Our platform components Originate Invest Operate CONNECT is equipping all aspects of the business with the best software and technology available in each area of renting – underpinning our future success as the industry leader. Implementing 8 technology solutions Customer Relationship Asset & Proper
Slide 45: Key benefits of CONNECT
Key benefits of CONNECT Originate Invest Operate High Customer Longer 1. Customer Delivering a differentiated experience through higher-quality, more consistent satisfaction data and retention experience service levels, and better customer insight. insight Lower Faster Optimised 2. Rent Growing our
Slide 46: Passing rent progression
Passing rent progression Originate Invest Operate Dividend growth underpinned by NRI growth Secured pipeline: £734m Planning / legals: £603m TfL: £600m +£24m £161m +2.4x +£13m +£14m +£15m £110m +1.6x +£9m +£10m +£8m £67m +£1m £32m *TfL Partnership – indicative estimate of Grainger’s unlevered 51% sh
Slide 47: Summary & Take Aways
Summary & Take Aways Helen Gordon
Slide 48: Summary & Take Aways
Summary & Take Aways Originate Invest Operate Creating connections that deliver sustainable growth Disciplined investment based on thorough research Significant future value to come through our investment pipeline City champions delivering exceptional opportunities Our partnership credentials give u
Slide 49: Thank you Q&A
Thank you Q&A @ Investing in homes since 1912 grainger plc