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pipllman

A Uk Institutional Ll Splashes The Cash

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So, here is an announcement from yesterday by Grainger plc

It has bought 112 'units' on a 6.7% headline gross yield

You can learn a bit more about how they measure their performance here

http://www.graingerplc.co.uk/investors/financial-performance/key-performance-indicators.aspx

and here is the text of the announcement

"Grainger plc ("Grainger", the "Company" or the "Group"), the UK's largest listed residential property owner and manager, today announces it has acquired a residential property portfolio of 112 private rented sector (PRS) units for c.£10.4m.

The portfolio comprises five sites located in Newcastle, Whitley Bay and Leeds, with an estimated rental value of c.£694k per annum.

Today's acquisition is further demonstration of the Company's continued acceleration of growth in its PRS business.

Including today's announcement, Grainger has acquired over 1,000 PRS units with a market value of c.£94m since 1 October 2014, bringing the value of the Company's total UK PRS portfolio to over £925m of assets under management."

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these few complaints highlight the potential downside of the corporate LL - it has to get customer service right

http://www.allagents.co.uk/grainger-trust-plc/

not that individual LLs are automatically better (or better at all), but that oft referred to being passed from pillar to post is more likely when dealing with a bigger organisation

:lol:

"Be careful what you wish for..."

Landlord idiom © 2015 :rolleyes:

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it is just a handful of complaints - it doesn't make the company a bad landlord

but a corporate LL doesn't automatically equal perfect housing and perfect compliance

if I had the choice, I would always choose a small, professional family LL rather than a large corporate - just as I would choose to buy meat from a good local family butcher rather than from Tesco

some wouldn't

and that's OK

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Choice? Chance would be a fine thing.

I'd like a unicorn for Christmas too. Unsurprisingly, as a landlord you present such a rose tinted view of your species. Even a poor corporate landlord would be better than what many private rental tenants are faced with on a daily basis. So no, it won't be perfect but it's a start and something to work with. Do you not think tenant groups will also want political pressure to bear on corporate landlords to ensure better quality and better service in housing? The demography will not go away.

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if I had the choice, I would always choose a small, professional family LL

In my experience the "small, professional family LL" species are the old timers who think the official rules don't apply to them because they're such decent ladies and gents. They are the most likely of any landlord species to let themselves into the property without permission.

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So, here is an announcement from yesterday by Grainger plc

It has bought 112 'units' on a 6.7% headline gross yield

You can learn a bit more about how they measure their performance here

http://www.graingerplc.co.uk/investors/financial-performance/key-performance-indicators.aspx

and here is the text of the announcement

"Grainger plc ("Grainger", the "Company" or the "Group"), the UK's largest listed residential property owner and manager, today announces it has acquired a residential property portfolio of 112 private rented sector (PRS) units for c.£10.4m.

The portfolio comprises five sites located in Newcastle, Whitley Bay and Leeds, with an estimated rental value of c.£694k per annum.

Today's acquisition is further demonstration of the Company's continued acceleration of growth in its PRS business.

Including today's announcement, Grainger has acquired over 1,000 PRS units with a market value of c.£94m since 1 October 2014, bringing the value of the Company's total UK PRS portfolio to over £925m of assets under management."

That's an average of 20 homes per site.

I would guess they are buying up estates of small new builds.

At a yield of 6% they are buying them at half the price most BTL would have bought i.e. half the price.

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In my experience the "small, professional family LL" species are the old timers who think the official rules don't apply to them because they're such decent ladies and gents. They are the most likely of any landlord species to let themselves into the property without permission.

And have not decorated since they inherit the property in the 70s.

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Sure, there are bad individual LLs and there are magnificent corporate LLs

That isn't at dispute

Just as there are bad local butchers and magnificent meat counter staff in some Tesco stores

Maybe I am making a case for an insignificant proportion of smaller landlords in the market just now. But, they will be the ones that survive, just as the better butchers survived the arrival of Tescos when mediocre butchers were forced out of business by the corporate onslaught.

And, when they have survived, my case is that tenants will have a markedly better experience with one of them as LL than with a corporate

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And have not decorated since they inherit the property in the 70s.

And are nursing along a 20 year old failing combi boiler with no interest in the fact that the tenants are spending months of the year without hot water while repeatedly waiting for the next boiler repair man to arrive.

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Grainger has a duty to continue to add shareholder value. Their job, is to continue to add properties accessing the cheaper credit that they have available. And they will continue on this path, until otherwise.

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The landlords who survive will be the ones who have no leverage - are good to their tenants and allow them a bit of stability with long term rentals- and they are rarer than hen's teeth.

True.

The provision of housing is a serious undertaking and should only be undertaken by those willing and able to take it seriously.

I aim to survive and am quite close to fitting your description of a potential survivor. Let's see.

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Is there any info on the location and type of their Leeds estate?

Some detail on Newcastle:

http://www.chroniclelive.co.uk/business/business-news/grainger-acquire-104m-portfolio-rented-10343473

Bought from Aviva.

Interesting. I have been aware of Grainger for years. I've only just looked at detail at the company.

http://www.graingerplc.co.uk/what-we-do/uk-residential.aspx

'The regulated tenancy asset is unique in that regulated tenants have the right to live in their property their entire life and pay a sub-market rent. For this reason, we acquire these assets while they are tenanted at a discount to their vacant possession value of about 30% (also known as the reversion). This reversion does not appear in Grainger's balance sheet and is worth £503m or 120p per share as at the end of September 2014.'

After reading this, I would guess Grainger are less a LL PLC and more a holding company for equity release.

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it is just a handful of complaints - it doesn't make the company a bad landlord

but a corporate LL doesn't automatically equal perfect housing and perfect compliance

if I had the choice, I would always choose a small, professional family LL rather than a large corporate - just as I would choose to buy meat from a good local family butcher rather than from Tesco

some wouldn't

and that's OK

Assuming that this unrepresentative selection of private landlords don't personally engage in no fault evictions - though they cannot, AFAIK, legally remove the threat of them - in all likelihood the tenant would still be subject to such when the private landlord dies, or if the private landlord ever has unexpected financial problems such as might be caused by serious ill health, and so if they are significantly younger than the private landlord and looking for a long term family home they would be foolish to choose the private landlord over the large corporate.

Additionally financing for private landlords is currently freely available and is not advanced to people on the basis of their quality as landlords, so unprofessional private landlords have become the norm. Said financing of private landlords does more to price people out of owner occupation than that of large corporate landlords, which tend to have a better appreciation of the need for yield, and so causes greater societal harm (and hence so do the private landlords who use it).

The choice that you present is also a false one, many people have very little chance of finding a either a (relatively) decent private landlord or a large corporate landlord to choose between and are forced to deal with a succession of unprofessional private landlords instead.

What's more it avoids addressing the key problem with the current rental sector which is that the central choice - of deciding to own one's own home instead of renting - has been effectively been removed from large sections of the working population by private landlords and other assorted property speculators (including the pre-financial crisis interest only cohort of owner occupiers) who have used loose lending practices to bid up house prices.

Even those speculators who did not borrow to the maximum but still took advantage of the loose lending environment - via interest only loans, consumer interest rates for what is effectively business lending, tax breaks for leveraged investments, etc - that created the current situation are still effectively profiting off of the suffering of others.

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