GRAINGER’S BUILD-TO-RENT OFFER SELECTED BY
THE ROYAL BOROUGH OF KENSINGTON AND CHELSEA
- Grainger plc selected by the Royal Borough of Kensington and Chelsea to develop and manage mixed tenure housing schemes, including purpose-built rental accommodation, on council-owned land -
Following the Prime Minister’s recent announcement of support for a new build-to-rent sector[1], the Royal Borough of Kensington and Chelsea (“RBKC”) is pleased to announce it has selected Grainger plc (“Grainger”), the UK’s largest listed residential property owner and manager, to develop and manage two innovative housing schemes on council-owned land in the borough.
Grainger will redevelop two council-owned sites (Hortensia Road and Young Street) for mixed tenure housing. Some will be privately sold, some will be affordable housing, but a major component of the development will be purpose built private rental accommodation managed by Grainger for the long term under a 125 year agreement. This innovative approach will see the Council retain freehold ownership of the sites and share a proportion of the long term rental income stream with Grainger. Grainger will also receive a management fee. [Further details of the deal can be found below.]
The Council, through this arrangement, will be able to benefit from Grainger’s unique set of skills, derived from its specialist activities as a residential investor, developer, asset and property manager, to bring forward two developments simultaneously with a combined end value of circa £100m.
In the coming months Grainger will commence a process of consultation on the design of the developments with local residents and community groups, with the intention to submit planning applications in mid-2013.
Grainger's offer and track record is directly aligned to the aspirations of the recent Government housing announcement, and this model will deliver a substantial development of professional, sustainable and well-managed private rented homes, that are in high demand in the local community.
Andrew Cunningham, Chief Executive at Grainger plc, said:
“These exciting projects come at a very interesting time in the sector, when private rented housing is high on the agenda, as demonstrated by the recent Montague Review and Government Housing Announcement. We are delighted to have been chosen for these projects by such a forward thinking local authority. We look forward to working alongside the Council to develop and manage affordable and private homes for sale and rent through Grainger’s unique platform. We anticipate that this could become a flagship project which will be of interest to many other local authorities, private land owners and developers in delivering private rented housing.”
Will Grant at Jones Lang LaSalle, who advised RBKC on the deal, said:
“We received a wide variety of innovative proposals for what are two relatively unique prime development opportunities. Grainger’s clear understanding and experience of the PRS model and willingness to take a longer term view set them apart.”
Renting is the fastest growing housing tenure in the UK, with millions more expected to enter the private rented sector by 2020. To date the private rented sector has suffered from a lack of large scale investment and an insufficient supply of good quality, attractive rental accommodation attractive to both tenants and institutional investors.
-ENDS-
For further information:
Kurt Mueller, Grainger plc
Tel: +44 (0) 20 7795 4700
Stephanie Highett/ Dido Laurimore/ Will Henderson, FTI Consulting (PR Adviser to Grainger plc)
Tel: +44 (0) 20 7831 3113
Notes to editors:
Outline details of the deal
Grainger will develop affordable, private for sale and private rented residential accommodation on both sites (Hortensia Road and Young Street). The freehold of the land will remain in RBKC’s ownership. Grainger will fund and manage the delivery of the projects; on completion RBKC will receive a share of the rental income with Grainger, who will also manage the properties for a fee for the duration of the 125 year agreement.
Grainger plc - company background information
Grainger plc is the UK’s largest listed residential property owner and manager, with over £3.0bn of residential assets under management across the UK and Germany. Grainger generates income through:
- Sales of properties when they achieve optimum valuations
- Rent from its portfolio of tenanted properties
- Fees for the management of residential properties and the provision of its expert services to select third party clients.
Additionally, Grainger is a leading provider of equity release products through its award-winning subsidiary brand, Bridgewater Equity Release.
Grainger was established in 1912 in Newcastle upon Tyne, where it remains headquartered. It has eight offices across the UK and Germany. Grainger is a constituent of the FTSE 250 on the London Stock Exchange and the FTSE4Good index. In 2012, Grainger was awarded the UK’s Residential Asset Manager of the Year at the RESI Awards.
[1]Number10, “Plans to boost UK housbuilding, jobs and the economy”http://www.number10.gov.uk/news/plans-to-boost-uk-housebuilding-jobs-and-the-economy/