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Grainger commits 850 million pounds to private rental sector expansion
January 28, 2016 / 8:47 AM / 2 years ago

Grainger commits 850 million pounds to private rental sector expansion

(Reuters) - Grainger Plc, the UK’s largest listed residential landlord, said on Thursday it intends to invest over 850 million pounds till 2020 to accelerate growth in its booming domestic private rental sector (PRS).

The company also announced an overhaul of its business, including the disposal of non-core development assets, as it looks to streamline its focus to regulated tenancies and PRS.

PRS landlords in the UK have pocketed some of the most lucrative returns in the property sector over the past two years, as a shortage of houses and high prices have pushed more Britons to rent.

However, changes announced in the recent budget threaten to curb their large gains, as they will have to pay more tax on some buy-to-let investments - properties purchased with a view to renting them out. The changes come into effect later this year.

“It is clear that swift and decisive action is required to capitalise on the compelling PRS market opportunity and to enable Grainger to realise its potential of being the UK’s leading private landlord,” CEO Helen Gordon said in a statement.

“We will transition to one highly focused business that will deliver improved and sustainable, rental asset-led shareholder returns.”

Grainger, which has already announced the sales of its retirement solutions business and its operations in Germany, said the plans would reduce its headcount by 10 percent.

Net rents and income from the PRS expansion plans would more than cover overheads, expenses and financing costs, Grainger said.

Reporting by Esha Vaish in Bengaluru; Editing by Sunil Nair

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