Grainger Plc · LSE:GRI
Grainger — Investor Day (June 2023)
47 slides from Grainger's investor day presentation, Jun 27, 2023
Slide 1: Capital Markets Day
Capital Markets Day Change photo Milton Keynes 27 June 2023
Slide 2: Agenda
Agenda Originate Invest Operate 1. Introduction Helen Gordon Chief Executive 2. Investing in Milton Keynes Sophie Lloyd & Sukhi Gill Milton Keynes City Council Tom Grounds Head of Market Research Paul Glibbery 3. Customer insight Chief Information Officer Andy Mason Head of Data and Analytics Mike K
Slide 3: 1. Introduction
1. Introduction Helen Gordon Chief Executive
Slide 4: Grainger is strongly positioned
Grainger is strongly positioned Originate Invest Operate 1 Secured growth EPRA earnings to double with committed pipeline in 4 years 2 Strong balance sheet Low cost of debt fixed for 6 years Resilient valuations 3 Strong rental growth offsetting yield expansion Robust transactional evidence and stro
Slide 5: 2. Investing in Milton Keynes
2. Investing in Milton Keynes Sophie Lloyd & Sukhi Gill Milton Keynes City Council Tom Grounds Head of Research
Slide 6: Milton Keynes Better by Design
Milton Keynes Better by Design Sophie Lloyd – Head of Economic Development Sukhi Gill – Town Deal Investment Lead
Slide 7: City of Milton Keynes
City of Milton Keynes Home to over 287,000 people (and over 120 robots!) A Gross Value Added (GVA) of £14bn - bigger than the cities of Oxford and Cambridge combined 180,400 employee jobs Ambitious plans for future growth population of 410k by 2050 (as big as Cardiff city)
Slide 8: Milton Keynes is UK's fastest growing city
Milton Keynes is UK’s fastest growing city #3 for Population Growth #9 for Business Start-ups Source: Centre for Cities, Cities Outlook 2023
Slide 9: One of the most productive and innovative business cities in the UK
One of the most productive and innovative business cities in the UK #3 for Innovation #5 for Business Stock (per 10k pop) #7 for GVA per hour #1 city for job opportunities Sources: Centre for Cities, Cities Outlook 2023 Best UK Cities for Job Opportunities 2023, Ciphr
Slide 10: Major employers
Major employers kPMG bsi. NBC \ NetworkRail Mercedes-Benz i / | Allianz (al) «> Santander Red Bull a: RA CIN G Marshall
Slide 11: Skills and Higher Education
Skills and Higher Education High-quality education providers in MK and surrounding areas, offering a potential strong supply of talent • Open University – Undergraduate and postgraduate courses and qualifications • MK:U – New university focused curriculum on the digital economy • South Central Insti
Slide 12: Connected city
Connected city Strategically located – midway between London and Birmingham, Oxford and Cambridge By Rail 35 minutes to London 50 minutes to Birmingham By Air London Heathrow, London Luton, London Stansted, Birmingham and East Midlands, can be reached in 90 minutes or less
Slide 13: City of Innovation
City of Innovation Milton Keynes is a leading Smart City both nationally and internationally Largest privately owned 5G network designed for R&D – current trials include EV remote controlled taxis European Robotics League competition host city 2023 (18th - 23 Sept) Home to the world’s largest fleet
Slide 14: City of Culture
City of Culture Milton Keynes hosts a wealth of cultural organisations and venues The IF: Milton Keynes International Festival is taking place in July 2023 The city hosted three matches and a semi-final of 2022 Womens UEFA Euros, and is home to MK Dons Rich history of music at MK Bowl and StadiumMK
Slide 15: Milton Keynes: Strategy for 2050
Milton Keynes: Strategy for 2050 Provides a vision, framework and spatial strategy for the future growth of the city to 2050 Population growth to c.410,000 by 2050, and up to 90,000 new jobs Ambition to be carbon neutral by 2030 and carbon negative by 2050 City status reinforces importance of achiev
Slide 16: Bletchley and East West Rail
Bletchley and East West Rail Bletchley ‘Home of the Codebreakers’ is undergoing a transformation, with £22.7m Town Deal investment East West Rail will link Milton Keynes/ Bletchley directly to Oxford, and Cambridge Will provide significant improvements in journey times and frequency
Slide 17: Stay Connected
Stay Connected LinkedIn - investmk Twitter - @InvestMK InvestMK www.investmiltonkeynes.com
Slide 18: Research-driven investment
Research-driven investment Originate Invest Operate Why do we remain focused on urban areas? Employment density vs labour productivity 100,000 10,000 Employee density,/sq km 1,000 100 10 Milton Keynes 1 20 30 40 50 60 70 80 Gross value added per hour worked, £ Sources: ONS Business Register and Empl
Slide 19: Economic indicators
Economic indicators Originate Invest Operate Milton Keynes has a strong knowledge economy 9/63 Business start-ups per 10k pop, 2021 Gross weekly full-time wage, 2022 5/63 Business stock per 10k pop, 2021 £697.30 £689.90 £685.30 3/63 New economy firms per 10k, 2022 £664.30 Numbers above show Milton K
Slide 20: Location structure
Location structure Originate Invest Operate Central Milton Keynes - candidate for densification MK knowledge employment is concentrated in the central area, but our core demographic is spread out; reflecting the historic lack of accommodation in the centre. Population growth Payrolled employees, ind
Slide 21: Location demographics
Location demographics Originate Invest Operate Central Milton Keynes is a high-earning renter location Central MK - household profile Central MK – tenant breakdown (12 months) 47% 27% 29% 22% 17% 12% 13% 14% 6% 7% 4% 2% One person Couples Families Other 18-21 22-24 25-29 30-34 35-39 40-49 50-59 60+
Slide 22: Strategically well-located
Strategically well-located Originate Invest Operate Milton Keynes is an oasis of affordability Can MK act as a “release valve” for Cambridge and Oxford? Cambridge Milton Keynes Oxford Source: Bricks & Logic Grainger plc | www.graingerplc.co.uk 22
Slide 23: 3. Customer insight
3. Customer insight Paul Glibbery Chief Information Officer Andy Mason Head of Data and Analytics
Slide 24: Grainger Insight Platform
Grainger Insight Platform Originate Invest Operate Our investment in the CONNECT platform delivering insight and performance Grainger Insight Platform Operational Reporting Data Lake Data Warehouse Systems & Analytics Customer Salesforce Data CONNECT Platform Customer Referencing Validation Data Fin
Slide 25: Our decision analytics program
Our decision analytics program Originate Invest Operate Using data and insights to drive our decision making Finalist Customers Product & Service Design Ambition: to maximise customer lifetime value Ambition: to deliver customer centric design and service in our best-in-class rental homes Current in
Slide 26: Understanding our customers
Understanding our customers Originate Invest Operate Where are our customers coming from? UK - customers moving to Enigma from London & SE - Majority of customers across the UK moving locally or from London 74% of 40% of customers customers moved moved from the from within South of Buckinghamshire E
Slide 27: Customer demographics
Customer demographics Originate Invest Operate Enigma Square demographic correlates closely to wider central MK Milton Keynes rental demographic – Central MK Median age of customers at Enigma Square South East, last 12 months compared with Solstice and the wider portfolio Central MK, last 12 months
Slide 28: Monitoring customer affordability
Monitoring customer affordability Originate Invest Operate Enigma Square attracts a more affluent customer base Individual Income at Enigma Square (£ per month) 4,000 3,417 3,333 3,000 2,750 Engima Sq BTR - London Solstice Apts Milton Keynes BTR - Regions Household Income at Enigma Square £61,000 £5
Slide 29: Building our data use cases
Building our data use cases Originate Invest Operate Developing our insight platform at speed Finalist Customers Product & Service Design Ambition: to maximise customer lifetime value Ambition: to deliver customer centric design and service in our best-in-class rental homes Products launched: Produc
Slide 30: 4. De-risking development
4. De-risking development Mike Keaveney Director of Land & Development
Slide 31: Growing our pipeline
Growing our pipeline Originate Invest Operate Disciplined yet flexible approach to sourcing, benefit of each route Direct Forward Stabilised FY21 Development Funding Acquisitions Full project control Access to opportunities Low risk Ability to control initial Accelerated pace of Immediate income des
Slide 32: Pipeline delivering at pace
Pipeline delivering at pace Originate Invest Operate 7 schemes delivering in the remainder of 2023 2023 Launches Wider Pipeline Forward funding Direct Development 1. The Mint, 2. Nautilus Apts, 3. The Barnum, 4. Weavers Yard, Waterloo, London Guildford Station, Fortunes Dock, Queens Rd, Newbury, Wes
Slide 33: Continual learning
Continual learning Originate Invest Operate Our integrated operating model provides continuous feedback which influences the evolution of design brief and specification • Over 110 years of residential experience • 19 BTR projects since 2016 • Real time feedback from our operational portfolio • Conti
Slide 34: Our expertise
Our expertise Originate Invest Operate Inhouse expertise across sourcing, development and delivery Acquisitions Land Team Team Direct Forward Funding Development Delivery Team Team Onboarding Team Grainger plc | www.graingerplc.co.uk 35
Slide 35: Active risk management
Active risk management Originate Invest Operate A focus on managing and mitigating development risk 1. Careful partner selection • Trusted development partners • Long term relationships • Repeat business 2. Robust due diligence • Technical due diligence including ESG and Building Safety • Counterpar
Slide 36: Delivering the right quality
Delivering the right quality Originate Invest Operate Developing our brief Careful team selection Monitoring & accountability Enigma Square, Milton Keynes Enigma Square, Milton Keynes Enigma Square, Milton Keynes Grainger plc | www.graingerplc.co.uk 37
Slide 37: Case Study: Enigma Square
Case Study: Enigma Square Originate Invest Operate Development Overview Transaction - Forward fund, secured in 2018 Developer - Pevril Securities Contractor - Bowmer and Kirkland Investment - £63m Expected Gross Yield on Cost - 6.25% Re-provision Practical Completion Initial opportunity Conditions c
Slide 38: 5. Delivering results
5. Delivering results Eliza Pattinson Director of Operations and Asset Management Jon Pitt Director of Lettings and Residential Marketing
Slide 39: Enigma Amenity Design
Enigma Amenity Design Originate Invest Operate Using our experience, data and insights to optimise building and amenity design Initial Design Design enhancement Initial Initial Refined amenity designed to optimize space and offering Increased co-working and Optimised Design gym space Revised parcel
Slide 40: Our compelling customer offer
Our compelling customer offer Originate Invest Operate A great rental experience & “More than just a home” WHY RENT WITH GRAINGER A Quick & Easy Rental Process No middlemen 1. View Customer first No surprises 2. Reserve Stay as long as you want 3. Approval Community matters 4. Move-In We
Slide 41: Data driven leasing strategy
Data driven leasing strategy Originate Invest Operate Inhouse leasing expertise driving performance Direct Let % (YoY) Lead Volumes (YoY) 8000 100% 6000 75% 4000 50% 2000 25% 0% 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep FY22 FY23 FY22 FY23 New
Slide 42: Data driven leasing strategy
Data driven leasing strategy Originate Invest Operate Adapting our launch strategy for seasonality Lead Volumes 2022 Launched Launched Launched 8000 Peak Lettings Season 6000 4000 2000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Lets Agreed 2022 Peak Lettings Season 400 200 0 Jan Feb Mar Apr M
Slide 43: Data-driven marketing strategy
Data-driven marketing strategy Originate Invest Operate How we generate awareness and convert leads Awareness Consideration Conversion Road to Pre- Practical Launch Letting Launch Marketing Completion Grainger plc | www.graingerplc.co.uk 44
Slide 44: Customer
Customer Originate Invest Operate Our focus on delivering best-in-class customer satisfaction and experience A M M Grainger plc | www.graingerplc.co.uk 45
Slide 45: Enigma Square
Enigma Square Originate Invest Operate 261 PRS Homes 90% Let +4.4% Above ERV 5 Star Customer Reviews Google Review Score Grainger plc | www.graingerplc.co.uk 46
Slide 46: Delivering results across the business
Delivering results across the Originate Invest Operate business 98.5% +6.8% 62.3% 34 25.5% Occupancy Rental growth Retention Net promoter score Gross to net (L4L, HY) c.10,000 >1,000 95% 10 min Operational homes Leads per week Lettings via in-house response time to initial Landlord of the Year enqui
Slide 47: Thank you Q&A
Thank you Q&A Enigma Square, Milton Keynes