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Ren wel.
Live wel.
Annual Report and Accounts 2025
Chair’s statement
p04
Chief Executive’s
statement
p05
Financial
review
p31
Strategic report
Our year in review 02
Chair’s statement 04
Chief Executive’s statement 05
Our purpose in action 09
We are in great shape 18
Our portfolio 20
Our market 22
Our value creation model 24
Key performance indicators (KPIs) 28
Non-financial/ Sustainability KPIs 30
Financial review 31
Grainger's approach to sustainability 36
Our people 38
Our assets 44
Our environment
46
Streamlined Energy and CarbonReporting 48
Task Force on Climate-related
FinancialDisclosures
53
Risk management and internal controls 61
Principal risks and uncertainties 64
Viability statement 70
Governance
Chair's introduction togovernance 72
Leadership and purpose 74
Stakeholder engagement 80
Division of responsibility 86
Nominations Committee Report 88
Responsible Business Committee Report 92
Audit & Risk Committee Report 95
Directors’ Remuneration Report 100
Annual Report on Remuneration 110
Directors’ Report 120
Statement of Directors’ responsibilities 122
Alternative performance measures 123
Financial statements
Independent Auditor’s Report 125
Consolidated income statement 132
Consolidated statement
ofcomprehensiveincome
133
Consolidated statement of financial position 134
Consolidated statement
of changes in equity
135
Consolidated statement of cash flows 136
Notes to the financial statements 137
Parent company statement
offinancial position
174
Parent company statement
ofchangesinequity
174
Notes to the parent company
financial statements
175
EPRA performance measures (unaudited) 180
Five year record (unaudited) 184
Other information
Shareholders’ information 185
Glossary of terms 186
Advisers and Registrar details 187
Forward-looking statements
This Report may contain forward-looking statements
with respect to certain plans and current goals
and expectations relating to the future financial
condition, business performance and results of
Grainger. Further information about forward-looking
statements can be found in the Shareholders'
information section on page 185.
Read more about our
great rental offer.
At Grainger we are passionate about
delivering a great place to call home.
Our ‘Rent Well. Live Well.’ proposition
is about working continuously to make
renting as easy and enjoyable as possible.
To deliver on our purpose of renting
homes and enriching lives.
p09
The Copper Works, Cardiff
1
Financial statementsGovernanceStrategic report
Our year in review
REIT Conversion: A strategic
transformation delivered
Financial performance
highlights
EPRA earnings
+12%
£53.7m (FY24: £48.0m)
Total dividend
+10%
8.31pps (FY24: 7.55pps)
Net rental income
+12%
£123.6m (FY24: £110.1m)
Net asset value (EPRA NTA)
298p
(FY24: 298p)
Following another year of continued strong performance, Grainger delivered
its strategic transformation to become a Real Estate Investment Trust (REIT).
This milestone demonstrates the fundamental reshaping ofthe business to
becomethe UK’s leading build-to-rent (BTR)
1
provider.
The conversion reinforces our excellent outlook and enhances our ability
todeliversustainable returns to Shareholders while continuing to provide
high-qualityrental homes for our customers.
1. Previously referred to as the private rented sector/PRS.
2. Pre -Ta x .
The Kimmeridge, Oxford
2
Grainger plc
Annual Report and Accounts 2025
Portfolio facts
A platform that consistently delivers strong
operational performance
Modern:
Majority of BTR portfolio built after 2016
Energy efficient portfolio:
with 96% BTR portfolio with EPC ratings
betweenA-C
Well located:
Investing in leading cities with great connectivity
andconvenience, where rental demand is
greatestand growing
Value for money:
Mid-market pricing with added benefits, including
Wi-Fi, Gyms, Co-working spaces and on-site
resident services teams at no extra cost to
our customers
A committed safety culture:
Our commitment to building safety informs
ourdesignsand operations
Operational performance highlights
Strong capital structure with
lowcost funding sources to
support growth
• c.£900m of non-core, low yielding assets to recycle and
reinvest capital into higher yielding BTR opportunities.
• Low cost debt locked in until FY29.
• Downward LTV trajectory over the medium term.
• Track record of strong operating cash flows of c.£200m+
per annum from operating activities and sales proceeds.
Market leading growth
trajectory
• Continuing to target £60m pre-tax EPRA earnings
by FY26 and £72m by FY29 from the delivery of our
Committed Pipeline.
• Further growth opportunity from Pipeline Phases 2
(Secured) and 3 (Planning and Legals).
• Material EBITDA margin expansion to 60% by FY29.
Like-for-like rental growth
(FY24: 6.3%) (FY24: 97.4%) (FY24: 53.7%)
(FY24: 28%)
(FY24: 99%) (FY24: +48)
+3.6%
Customer affordability (rent as a
percentage ofgross income)
28%
Occupancy
98.1%
Rent paid on time
99%
EBITDA margin
55.5%
Customer Net Promoter Score
+42pts
The Copper Works, Cardiff
3
Financial statementsGovernanceStrategic report
Chair’s statement
D
ear Shareholders,
It is with great pleasure that I present
my final annual statement as Chair of
Grainger plc and I am pleased to report
another year of excellent performance
andstrategic progress.
The Board visited our new site in Cardiff
during the year and were incredibly
impressed by what they saw and the
dedication and enthusiasm of our on-site
teams whose prime role is to look after
our customers.
Delivering for Shareholders
Despite a challenging macroeconomic
backdrop, including persistently high
interest rates particularly affecting the
listed real estate sector, Grainger has
continued to deliver.
Our resilient, low-risk business model
has once again proven its strength.
We achieved exceptional occupancy at the
end of the year at 98.1%, sustained rental
growth of 3.6%, whilst maintaining healthy
customer affordability.
Our disciplined capital structure, including
a low cost of debt until FY29, has
insulated us from the broader interest rate
environment. As a result, we are pleased
to announce another consecutive year of
dividend growth (total dividend: 8.3pps,
+10%), reflecting our commitment to
delivering progressive returns.
This year also marked a pivotal milestone:
Grainger’s conversion to a Real Estate
Investment Trust (REIT), further solidifying
our position as the UK’s leading listed
residential rental investment business
and enhancing long-term value
for Shareholders.
We remain on track to deliver continued
earnings growth over the coming years
through the delivery of our Committed
Pipeline. To support returns and continued
earnings growth, the Board took the
decision to focus on cost reduction and
de-leveraging in the years ahead.
Delivering for our customers
Grainger has the UK’s leading residential
operating platform, underpinned by our
CONNECT system and substantial data
insight. This unrivalled platform not only
continues to deliver for Shareholders,
but importantly it delivers for our tens
ofthousands of customers.
Our focus on the delivery of a great
customer experience is reflected in our
outstanding Net Promoter Score of
+42, placing us among the world’s most
trusted consumer brands. Nine out of ten
Grainger residents say they “really like”
their home and trust the Grainger brand.
This reputation is built on our commitment
to quality, service, and innovation, ensuring
that all our customers across the UK feel
valued and supported.
Delivering for our colleagues
We are equally committed to fostering
a diverse, inclusive, and rewarding
workplace. Grainger’s recognition by
the UK’s National Equality Standard
underscores our dedication to best-in-
class practices. Our biannual colleague
engagement survey is a key consideration
for the Board and the Senior Executive
team and leads to detailed action
plans which have resulted in one of our
highest scores to date for ‘Outstanding’
employee engagement. We are proud
to be recognised as one of the UK’s Top
50 Large Employers, a testament to our
culture and values.
Delivering for the environment
Sustainability remains at the heart of our
strategy. This year, our emissions reduction
targets were validated by the Science
Based Targets initiative, reaffirming our
commitment to reducing our carbon
footprint. We continue to enhance the
energy efficiency of our portfolio, with 96%
of our BTR properties now rated EPC A to
C. These achievements demonstrate our
commitment to responsible growth and
environmental stewardship.
Delivering Live.Safe
We continue to build on our commitment
to our health and safety culture and
compliance with our Live.Safe strategy,
achieving year-on-year improved high
scores in our safety climate survey of
colleagues. We are progressing well with
the implementation of the new Building
Safety Act requirements, ensuring that
our buildings are safe for residents
and colleagues.
Concluding remarks
In the last month the Government
has passed legislation that covers the
rental market in England and Wales.
We welcome the passage of the Renters’
Rights Bill, which we believe will raise
standards across the private rented
sector, while ensuring the market remains
attractive to long-term, responsible
investors like ourselves, and our existing
high standards mean we are ready to
implement these changes when they
come into effect in 2026.
It has been an honour to serve as Chair
of Grainger, an exceptional business that
consistently delivers value to Shareholders,
customers, colleagues, and communities.
I am delighted to welcome Simon Fraser
as Chair Designate. Simon brings extensive
board-level experience in real estate
investment and capital markets, and I am
confident he will guide Grainger to even
greater success.
When I look back over the last nine years I
am amazed at the progress the Company
has made in terms of the quality and
number of the homes we provide, the
experience and service we deliver to all our
customers and the step change in financial
performance achieved. This is a testament
to the whole Grainger team and especially
to Helen’s leadership of the Company.
The Board continue to believe Grainger is
well positioned for continued growth as
the leader in its sector and I look forward to
watching its progress in the years ahead.
Mark Clare
Chair
19 November 2025
Grainger has
delivered an
outstanding
performance.”
4
Grainger plc
Annual Report and Accounts 2025
Chief Executive’s statement
D
ear Shareholders,
Once again I am pleased to say
your company has delivered another
excellent performance with strong income
growth, evidencing our resilience despite
macroeconomic headwinds.
These challenging macro factors,
including enduring high interest rates, are
undoubtedly putting downward pressure
on the listed real estate sector generally.
However we are focused on what is in
our control, such as growing income,
managing costs, and enhancing our
portfolio of high quality-homes.
Continuing to deliver excellent
earnings growth
Portfolio expansion and strong operational
performance delivered another year of
strong earnings growth, with pre tax EPRA
earnings up +12%. IFRS profit before tax
was £102.6m (FY24: £40.6m) as a result
ofpositive valuation movements.
Grainger operates in the UK housing rental
market which continues to see a worsening
supply shortage coupled with strong
demand. Our sector-leading operational
platform enables us to outperform and
we delivered exceptional occupancy in the
year of 98.1% alongside robust like-for-like
rental growth of 3.6%, broadly in line with
the long run average.
Our customer affordability level remains
robust at 28% and customer satisfaction
levels remain sector-beating with scores
alongside global consumer brands.
Our capital structure is in a strong position
with our average cost of debt at 3.3% and
remaining low until FY29, with plans in
place to reduce debt in the medium-term.
We will continue to recycle out of our
low-yielding, non-core assets (primarily
regulated tenancies) which will fund
the remaining spend in our Committed
Pipeline and enable us to reduce net debt
by between c.£300m-£350m by FY29 to
support ongoing earnings growth.
We continue
to enrich
the rental
experience.”
Helen Gordon
Chief Executive
5
Financial statementsGovernanceStrategic report
Chief Executive’s statement continued
Grainger is therefore well positioned to
continue to grow and deliver Shareholder
value. Our £343m Committed Pipeline,
with only £130m remaining to spend, will
grow earnings significantly. We continue to
target £60m earnings (pre tax EPRA basis)
by FY26 and £72m by FY29 in line with
prior guidance.
In addition, we have a significant pipeline
of future opportunities which provides
us optionality to accelerate growth in
the future.
Strategic transformation
culminating in REIT conversion
It is almost 10 years since I set out our
build-to-rent (BTR) strategy and our
ambition to deliver for Shareholders a
company with resilient earnings in an
undersupplied market. We laid out a
path toward transforming Grainger into
a focused, simplified residential rental
investment business and over the past
10years we have delivered:
• +14% 10yr CAGR in Net Rental Income
• Significantly increased EPRA earnings
to £54m
• Increased EBITDA margins by nearly
3times from 19% to 56%
• Increased dividend per share by +202%,
20 consecutive periods of growth,
distributing c.£345m to Shareholders
over the 10-year period
• Improved customer satisfaction by
2.75times or +66pts since we first
measured NPS in 2017
We have disposed of £1.9bn of non-core
assets over the 10-year period and have
invested to create from scratch our BTR
portfolio which now stands at £2.9bn
and 11,078 homes, serving more than
25,000 customers.
Only 2.5% of the rental market is BTR
with the remainder mainly made up of
small, private landlords who continue to
exit the sector. At the same time, demand
for renting continues to grow with Savills
forecasting 20% growth in demand for the
10 years to 2031.
Strong customer base
Our customer base is diverse and robust.
Customer affordability remains stable and
healthy at 28%, and our customers are
employed across a broad range of sectors
and job types.
A certain and supportive
regulatory outlook
There is a strong political and societal
push toward greater professionalisation.
In October this year the Government
passed the Renters’ Rights Bill. We now
have certainty over the regulatory outlook
for our market and we have confirmation
that this Government fundamentally
opposes any form of rent controls.
We are well positioned to thrive in this
new legislative environment.
All these factors provide a strong
foundation for Grainger’s continued
futuresuccess.
A market-beating strategy with
a sector leading portfolio and
operational platform underpinned
by data insight
Grainger’s BTR strategy is to invest in
and provide mid-market rental homes in
locations with the greatest demand and
shortest supply.
We own and manage all our properties
directly. We are responsible for the
customer relationship and this overall
approach allows us to outperform.
This major transformation focusing on
growing recurring rental income has
enabled us to convert to a Real Estate
Investment Trust (REIT) this year, which
requires at least 75% of assets and profits
to come from rental investments.
REIT status will enhance Shareholder
returns and importantly will not impede
our growth trajectory. Our business model
and strategy remains unchanged.
Grainger has a compelling investment case:
• Low risk asset class with resilient growth
• Strong market fundamentals
• Strong customer base with positive
outlook for rental growth
• Certain and supportive
regulatory outlook
• Sector leading portfolio and operational
platform underpinned by data insight
Residential rental: Low risk
asset class with excellent
growth prospects
Residential rental has some of the most
defensive characteristics of any real
estate asset class. Both residential rents
and capital values have outperformed
commercial real estate for the past twenty
years. Residential rents, on average,
outperform inflation. The net asset value
of our portfolio has proven resilient again
this period, backed up by sales. Over the
past five years despite increased interest
rates the net asset value of our portfolio
has increased +5.0%.
Strong market fundamentals
A worsening supply shortage with a
current deficit of 4.3m homes nationally
contrasts starkly with a growing
population of renters.
28%
Grainger customer
affordability ratio
Grainger is well
positioned to continue
to grow and deliver
Shareholder value.”
Helen Gordon
Chief Executive
6
Grainger plc
Annual Report and Accounts 2025
It allows us to fully understand our
customers, their preferences and drivers
and respond accordingly. Our technology
platform, CONNECT, enables us to
manage a large portfolio efficiently
and effectively.
Our sector-leading operational
platform is focused on delivering great
service to customers and great value
for Shareholders.
Delivering outperformance
Our strategy has proven that it delivers.
We continue to achieve high occupancy
and responsibly drive rental growth
year-on-year.
This in turn delivers shareholder returns.
EPRA Earnings were up +12% this year,
after a 24% increase last year. And this
growth will continue.
From the delivery of our Committed
Pipeline, after assuming a full rebasing
of our debt costs to a higher rate,
we expect to grow EPRA earnings
significantlyto£72m by FY29.
The portfolio continues to demonstrate
its resilience with valuations stable and
EPRA NTA resilient at 298p per share.
The value of our portfolio (EPRA NTA) is
up +5.0% over the past five years despite
the high interest rate environment.
This is amongst the highest in the real
estate sector, evidencing our resilience.
And our accelerated disposals programme
reaffirms the value of our portfolio with a
high volume of varying asset types being
sold in line with valuations. Over the last
three years, we have sold £640m of non-
core assets.
Due to the strength of Grainger’s ongoing
performance, we are proposing a final
dividend of 5.46p per share, which brings
our total dividend for the year to 8.31p,
a+10% increase.
A leading approach to the
workplace, communities and
environment
We are committed to being a great
place to work. Our recognition by the
National Equality Standard reaffirms
this commitment.
Equally, our colleagues confirm that
Grainger is a great place to work. This year
we achieved our highest ever employee
engagement score, securing two out of
three stars for being an ‘Outstanding’
workplace by the independent assessor
Best Companies, and placing in the
Top 50 best places to work in the Large
Company category.
Our high performance and inclusive
culture is central to Grainger’s continued
success and strength.
Over the year, we partnered with
over 30 local charities, giving both
colleagues and customers the
opportunity to give something back to
their local communities. Much of our
charitable efforts focus on housing and
homelessness, aligned to our business.
One standout initiative is our partnership
with the youth homelessness charity,
LandAid, and our involvement in their
BTR Pathfinder programme, which sees
us pledging accommodation to support
young people at risk of homelessness.
People at the Heart
We’re committed to enriching lives and
building vibrant communities. This year,
we hosted over 630 social events in our
amenity spaces, creating opportunities
for connection and engagement.
Seraphina Apartments,
Fortunes Dock Cluster,
Canning Town
7
Financial statementsGovernanceStrategic report
Engaged Workforce
We achieved our highest ever
employee engagement score,
securing an Outstanding rating,
and placing in the Top 50 best
places to work in the Large
Company category
Chief Executive’s statement continued
To date, we have supported three
young people to give them a home in
our communities from which to start
living independently.
We have for many years also taken a
sector leading approach to sustainability.
I am pleased to report that this year our
emissions reduction targets have been
validated by the globally recognised
Science Based Targets initiative (SBTi)
and align to the 1.5 degree climate
commitment by the UK Government
andthe Paris Agreement.
Because of our strong sustainability
credentials, we have now been added to
the Dow Jones Best-in-Class Indices for
Europe for 2025, supplementing our high
ratings in a number of other benchmarks.
And I am pleased to report that 96% of
our BTR portfolio now has EPC certificates
of between A to C, providing our
customers energy efficient homes.
An excellent, positive outlook
As I first mentioned, what we have in our
control is in excellent shape and we intend
to ensure this remains the case.
A focus on capital allocation and
delivering shareholder value
With current expectations of high interest
rates remaining, we are focusing our
attention on the imminent delivery of our
Committed Pipeline and delivering our
guided EPRA earnings target of £72m
by FY29. Our other priority is to reduce
net debt in order to mitigate against the
impact of higher interest rates.
These initiatives are both deliverable
because of our successful ongoing
disposals programme.
We are equally focusing our attention
on costs, particularly central overheads.
Our platform has been designed for
growth and scale, and as the pace of our
acquisitions naturally settles to align to
the prevailing market conditions, it is
important we manage costs appropriately
in the interim. We therefore have
plans in place to ensure central costs
are as efficient as possible and sized
appropriately for the scale and nature
ofour portfolio.
With this front footed approach, we will
maintain the strength of our market
positioning to enable us to accelerate
growth swiftly in the future.
I would like to thank the Board of
Grainger and particularly our Chair of
the last nine years, Mark Clare, for his
unwavering support of our strategy and
for his guidance and insights he has given
me and the senior leadership team of
Grainger. His support has been invaluable.
I would also like to thank Justin Read,
our Senior Independent Director, for
leading the search for our Chair Designate,
Simon Fraser. I look forward to working
with Simon.
Finally, I would like to thank my colleagues,
an exceptional team who have once again
delivered for you.
Helen Gordon
Chief Executive Officer
19 November 2025
8
Grainger plc
Annual Report and Accounts 2025
Grainger’s core purpose is
to rent homes and enrich
lives. We consider all
our stakeholders in our
decision-making.
We are committed to providing good quality
homes to rent that are safe, well maintained
and with great connectivity. We are creating
communities where people can truly feel at
home and delivering excellent service and value.
Windlass Apartments, Tottenham Hale
9
Financial statementsGovernanceStrategic report
10
Grainger plc
Annual Report and Accounts 2025
“ The team are awesome and
always ready to help with a
smile on their faces.”
Ben,
Grainger customer
W
e enrich the lives of our customers by
providing an exceptional service from
day one. Whether logging a repair on our
easy-to-use customer app, accessing the
24-hour gym in the middle of the night, or
picking up a parcel and having a friendly chat
with the resident services team, we make
living easy, convenient and hassle-free.
11
Financial statementsGovernanceStrategic report
W
e invest where our customers can
thrive, choosing locations
that offerthe best of connectivity,
convenienceand quality of life.
Through a robust, research-led process,
wehave identified the best places to invest
“ The location is fantastic,
easy access to public
transport, shops and
nearby attractions.”
Abhinandan,
Grainger customer
in and build our homes, ensuring our
customers are well connected to all their
needs and wants.
With an average Walk Score of 87/100,
our homes are close to transport hubs,
employment centres, local amenities,
andcultural and recreational facilities,
keeping our customers connected to
thethings they value most.
12
Grainger plc
Annual Report and Accounts 2025
F
rom the moment a customer
chooses to rent with Grainger,
they are instantly connected.
Customers deal directly with the
Grainger team throughout the tenancy
lifecycle - from initial enquiry, to
move-in, right through to move-out –
withno middlemen.
Tatyana,
Grainger customer
“ The resident app
is a fantastic feature
– it works flawlessly.”
Customers also enjoy superfast Wi-Fi
as standard from day one in most of our
properties. Through our user-friendly
customer app, they can bookhome
repairs, hire amenity spaces, sign up to
resident social and community events,
and even buy and sell clothes, furniture
and home accessories through the
app’s marketplace.
Our well-connected homes and
customerscreate vibrant communities
inall of our buildings.
13
Financial statementsGovernanceStrategic report
“ I can’t imagine
being anywhere
else! I’ve made so
many friends.”
Grace,
Grainger customer
W
e believe in creating happy
and healthy communities
withinour buildings.
By engaging with our customers,
partners,colleagues and wider local
community, we have created a varied
programme of social, charitable and
community events across our buildings.
From living greener articles and healthy
living tips on the customer app, to
charitable donation schemes and local
charity partnerships through to social
events throughout the year including
summer parties, book clubs, painting
evenings and after school clubs,
customers can get involved in as much
oras little as they like and feel part of
theGrainger community.
Grainger Gather resident event:
Clippers Quay, Salford
14
Grainger plc
Annual Report and Accounts 2025
W
e pride ourselves on giving
customers more than just a home.
We want them to feel like they can put
down roots and stay with us for the long-
term.
Henry,
Grainger customer
“ It’s not just an
apartment; you
can make it a
real home.”
By offering customers the opportunity
topersonalise homes, work flexibly in
ourco-working spaces, enjoy bookable
spaces such as private dining rooms and
roof terraces with family and friends,
andtake part in social events throughout
the year, we believe we are delivering great
places to live and call home.
Seraphina Apartments, Fortunes Dock
Cluster, Canning Town
15
Financial statementsGovernanceStrategic report
“ We managed to find
the flat of our dreams
that felt equally safe
and secure!”
Nevaeh,
Grainger customer
Millwrights Place, Bristol
16
Grainger plc
Annual Report and Accounts 2025
W
e put the safety, security
and wellbeing of our
customersfirst. Our homes
meet high standards, with robust
security, regularchecks and
proactivemaintenance, so
residentscanlive comfortably
withcomplete peace of mind.
We design and operate homes that
are efficient and sustainable, enabling
our customers to save on energy costs.
Low carbon technologies such as solar
panels and heat pumps, improved
insulation and 100% renewable
electricity all help to reduce energy use,
cut costsand support the achievement
of our science-based emissions
reduction target by FY30.
Our buildings are accessible and
inclusive, with step free access,
adaptable layouts and shared
spaces that bring people together.
By combining safety, sustainability
and inclusivity, we create communities
where everyone feels welcome,
connected and proud to belong.
17
Financial statementsGovernanceStrategic report
We are in great shape
We are the UK’s leading residential REIT.
We develop, own and operate rental homes across the country.
We are in great shape
Established in Newcastle
Our portfolio
1912
Customers
number of homes in operation
(FY24: 11,069)
11,078
homes in our pipeline
(FY24: 4,730)
4,371
25,000+
Build-to-rent Homes
We own and manage 9,874 privately rented homes which are predominately
purpose-built, modern and energy efficient known as build-to-rent (BTR).
In addition, we have a £1.3bn pipeline which represents an additional 4,371
newBTR homes in our target towns and cities.
9,874
Operational BTR homes
(FY24: 9,443)
Our strategic transition to BTR
(investment value)
Regulated tenancy homes
We own and manage 1,204 homes subject to regulated tenancies where the
tenants have the right to reside for life and rents are set by a third-party rent officer
every two years. Rents are typically below the open market. The capital value of
these properties is less than their vacant possession value. We sell these properties
when they become vacant, capturing their full value, and we are also recycling
out of these properties before vacancy, where their returns outlook justifies early
disposal. The disposals from these low-yielding, non-core assets are funding our
investment in newer, higher yielding BTR assets.
98.1%
High occupancy
(FY24: 97.4%)
BTR
9,874 homes
89%
Regulated tenancy
1,204 homes
11%
See page 20 for details of
ourportfolio
Seraphina Apartments, Fortunes Dock Cluster, Canning Town
Mitre Road, Waterloo
18
Grainger plc
Annual Report and Accounts 2025
Delivery underway Optionality to progress Opportunities for the future
Pipeline
£1.3bn
total
Portfolio growth
We have multiple routes to continue to grow our portfolio including a significant pipeline of potentialinvestment to deliver
new BTR homes in our key target cluster locations.
Our committed pipeline
will deliver significant
earnings growth
Our development pipeline will drive significant
earnings growth. The committed pipeline will
deliver significant EPRA earnings growth to £60m
(8.1pps) by FY26 and £72m (9.7pps) by FY29,
even after assuming a full rebasing of our cost
of debt to higher interest rates. (See page 24 for
more details.)
Acquire existing
assets
Asset repositioning
opportunities
Strategic joint
ventures and
partnerships
Development &
Forward Fund
£393m
Planning/Legals
1,373 homes
£541m
Secured
2,044 homes
£343m
Committed
954 homes
Routes to growth
Development pipeline
2023
£40m
2024
£48m
2025
£54m
2026
£60m
2027 2028 2029
£72m
+c.50%
+c.35%
Growing EPRA earnings
Guidance for FY26 & FY29
19
Financial statementsGovernanceStrategic report
Manchester
Bristol
Milton Keynes
Newbury
Derby
Birmingham
Leeds
Nottingham
Cardiff
Oxford
Guildford
London
Southampton
Liverpool
Newcastle
Sheffield
Our portfolio
National rental portfolio
Our national portfolio is specifically targeted at locations
with high demand, significant housing shortages, and
strong growth prospects.
11,078
Operational homes
4,371
Pipeline homes
£3.5bn
Portfolio value
£1.3bn
Pipeline
North West
(Manchester & Liverpool)
1,785
Operational homes
North East (Newcastle)
327
Operational homes
Yorkshire
(Leeds, Sheffield)
1,022
Operational homes
East & Midlands
(Birmingham, Derby, Nottingham)
1,310
Operational homes
South West & Wales
(Bristol, Cardiff, Exeter)
1,290
Operational homes
London (See overleaf)
2,916
Operational homes
South East
(Guildford, Southampton)
2,428
Operational homes
Key
Operational homes
Geographic breakdown of our total
operational portfolio by number of homes
Central London
Outer London
South East
South West
East & Midlands
North West
Other regions
13%
13%
18%
9%
16%
16%
15%
20
Grainger plc
Annual Report and Accounts 2025
£1.4bn
Portfolio value
Battersea Park
Waterloo
Oval
Kew Gardens
Peckham Rye
New Cross
Woolwich Arsenal
Barking
Clapham Junction
Canning Town
Seven Sisters
Dalston Junction
Angel
Old Street
Liverpool Street
London rental portfolio
We continue to invest in new homes in our target locations, including
in partnership with public sector organisations, including Transport
for London (TfL).
2,916
Operational homes
2,215
Pipeline homes
£0.6bn
Pipeline
North London
39
Operational homes
North East London
348
Operational homes
East London
803
Operational homes
London City Fringe
386
Operational homes
South East London
237
Operational homes
Inner London
406
Operational homes
West London
274
Operational homes
South West London
423
Operational homes
21
Financial statementsGovernanceStrategic report
Key
Operational homes
Our market
Defined by growing rental demand
andongoing undersupply
Housing supply constraints
will provide further tailwinds
Housing starts in our core markets have continued to decline,
which will lead to housing completion figures reducing over
the next few years. Continued population and economic
growth will also underpin our market. We therefore expect
average rental growth to be broadly in line with the long-run
rental growth trends of circa 3-3.5% per annum.
Grainger, with our strategic partnerships such as with
Transport for London (TfL), Network Rail and the Ministry
of Defence, along with our expertise and fully integrated
approach to developing, owning and managing, allows
us to navigate these challenges and continue to deliver
new homes.
England housing starts – 4 quarter rolling total
Source: MHCLG (2025)
Private Enterprise Starts – 4qtr Housing Association Starts – 4qtr Local Authority Starts – 4qtr
Solid market fundamentals
4.3m
A severe housing shortage
of 4.3m homes
+20%
Rental demand, estimated
by Savills to grow 20% in the
10 years to 2031
A growing population
2.5%
Highly fragmented rental
market, dominated by
small landlords with BTR
representing only 2.5%
today, but growing
Highly constrained supply,
with housing deliveries
down and small landlords
exiting the sector
(Source: ONS (2025), NISRA (2024/25),
BPF and Savills (Q3 2025)
(Source: Centre for Cities (2023)
Seraphina Apartments,
Fortunes Dock Cluster, Canning Town
22
Grainger plc
Annual Report and Accounts 2025
Q1 Q2 Q3 Q4
Source: Savills
*Q4 data not available at time of printing
Investment volumes remain
robust, underlining the
strength of institutional
interest in the sector
Despite the notable fall in housing starts – and the rises
in market interest rates seen in recent years – it is telling
that investment volumes in our sector have continued to
grow year-on-year; demonstrating the attractiveness of the
income stream to major global institutions.
Savills data shows £2.6bn of investment into BTR in the first
three quarters of 2025, ahead of 2024’s figure of £2.5bn,
whilst we continue to see major institutional investors from
home and abroad attempting to find routes into the sector.
With Savills projecting a 20% growth in rental demand over
the 10 years to 2031, an additional 800,000 to 1 million rental
households, this would require an estimated investment
of £300bn in order to meet this demand. This investment
activity and outlook underpins valuations and liquidity in
our market.
BTR Investment Volumes
2011 201520132012 2014 20182016 2017 2019 2022 2023 2024 2025*20212020
£6,000
£5,000
£4,000
£1,000
£2,000
£3,000
0
The residential sector is a total
return growth stock
Source: ONS (2025), CBRE (2025)
10-year growth, per annum to September 2025
Private Rent Index
(ONS)
Consumer Price Index Commercial Rental
Values (CBRE)
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
1.8%
3.3%
3.8%
Although residential property typically
has a lower initial yield than commercial
property, it is important to bear in mind
thatithas very different growth and
risk profiles.
Over the past ten years, residential
has achieved rental growth of almost
4% per annum; abovethe Consumer
PricesIndex (CPI).
In contrast the commercial sector has
delivered growth of morethan 100bps
per annum below CPI.
Compared to commercial real estate
with higher initial yields but lower
growth prospects, residential trades
at a high income multiple because of
its growth characteristics.
The link to “human need”, as
opposed to “human want” means
that during downturns our sector
rarely sees rental growth turn
negative, with volatility overall
far lower, giving a notably lower
risk profile than other realestate
asset classes.
23
Financial statementsGovernanceStrategic report
A strong financial footing
Sources of funding:
Our value creation model
Shareholder value
+12%
EPRA earnings
+10%
Dividend growth
298p
EPR A NTA
Excellent, risk
adjusted returns
Customers
Local communities Suppliers
Colleagues
Government
+42 pts
Net Promoter
Score (NPS)
631 events
Held in our buildings
50%
Spent locally
(within 5km)
Outstanding
employee survey score
4,371
new homes in
pipeline
Other stakeholder value
£129m
Passing Net Rent
c.£900m
Non-core assets for disposal,
a key funding source
£86m
Cash flow supported by disposals
from our non-core portfolio
3.3%
Average cost of debt
Great homes with outstanding service
drives high customer satisfaction, increased
occupancy, stronger rental growth, and
enhanced asset valuations. This generates
market-leading returns for our Shareholders
and long-term value for all our stakeholders.
Inflation +
Rental Growth
Expanding
EBITDA margin
We are focused on delivering
high‑quality sustainable growth
Delivery
underway
Optionality
to progress
Opportunities
for the future
Structural
Market Tailwinds
£541m
Secured
2,044 homes
£343m
Committed
954 homes
£393m
Planning/Legals
1,373 homes
Pipeline
£1.3bn
total
Pipeline
£1.3bn
total
24
Grainger plc
Annual Report and Accounts 2025
Research-backed
investing
Allocating capital
in the strongest
locations and
best assets
Scalable platform
Through technology, our market
leading operating platform
is scalable to support our
continued growth
See page 27
Planning,
design and delivery
Controlling the
delivery and quality
of our pipeline of
new homes
See page 26 See page 26
Inflation +
Rental Growth
Expanding
EBITDA margin
Our Strategy
Grow rents
Simplify and focus
Build on our experience
O
p
e
r
a
t
e
I
n
v
e
s
t
O
r
i
g
i
n
a
t
e
25
Financial statementsGovernanceStrategic report
Our value creation model continued
Using research to drive
capital allocation
We allocate capital using a dual-layered
research approach.
We first conduct a top-down analysis at the local
authority level evaluating economic structure,
housing markets, and demographics to identify areas
with strong business sectors and educated renters.
We then perform bottom-up micro-location analysis
using a geographical information system (GIS) to
assess rental markets, demographics, and proximity
to amenities, jobs and leisure.
This rigorous process ensures investments are
made in cities with long-term growth potential and
neighbourhoods that appeal to target customers,
delivering enduring value and strategic advantage.
Invest
Originate
Planning
Our in-house Development Team
gives us full control over the planning,
design, and delivery of our homes.
This ensures high-quality outcomes and
enables us to meet rigorous standards
for efficiency, sustainability, and
customer appeal.
Design
We design our homes and buildings
with our customers in mind, creating
desirable spaces with layouts and
amenities that reflect modern
living needs.
Delivery
Leveraging our fully integrated model
and in-house expertise, we deliver
high-quality, efficient homes across the
UK, tailored to meet the evolving needs
of renters.
The expertise to deliver quality homes from our pipeline
Our regional
clusters
26
Grainger plc
Annual Report and Accounts 2025
Operate
Efficient
Our operating platform sets us apart
from the competition. We directly lease
and manage our properties and have a
direct relationship with our customers
from the outset.
Great service
We know what it takes to manage a
building efficiently, but also what it
means to deliver great service and,
importantly, value to our customers.
Scalable
Our platform has been designed for
growth, powered by our CONNECT
technology, and can manage a portfolio
multiple times the size, supporting
our growth ambitions and leading to
significant EBITDA margin expansion.
The market-leading BTR operating platform
A leading approach to Sustainability
We are committed to being a responsible business
People
We put people at the heart of
everything we do and are committed
to being a great employer, a great
landlord, and to delivering long-term
social value to our communities.
Assets
We design and create quality homes
with high standards of sustainability
that attract and retain customers and
helps to deliver long-term value to
our stakeholders.
Environment
We are committed to reducing our
environmental impact and protecting
the long-term future of our business,
including achieving our science-based
emissions reduction target for 2030.
27
Financial statementsGovernanceStrategic report
Read more about our
environmental impact Page 46
Read more about our assets
Page 44
Read more about our people
Page 38
KPIs
Gross rental income
afterdeducting property
operating expenses.
Like-for-like average
growth of rents
acrossourBTR portfolio.
EBITDA Margin is defined
as earnings before
interest, depreciation,
amortisation and tax,
excluding liquidated and
ascertained damages,
divided by Revenue.
EPRA earnings are the
recurring income from
the Company’s property
portfolio excluding
property revaluations,
gains/losses on investing
and trading property
disposals and changes
in the fair value of
financial instruments.
Profit before tax is a
statutory IFRS measure
aspresented in the
Group’sConsolidated
Income Statement
(including valuation
movements).
Increase of 12% due to
a combination of strong
delivery of pipeline
schemes launches
(£17.7m), strong like-for-
like rental growth (£2.1m),
offset by disposals
(£6.3m).
3.4% like-for-like growth
in our BTR rental income
driven by our strong
leasing performance,
reflecting strong demand
for our product.
EBITDA margins saw an
180bps increase to 55.5%
due to the operational
leverage benefits
of strong net rental
income growth.
Increase of 12% due
to strong growth in
net rental income
combined with a focus
oncost efficiency.
Increase of 153% driven
by a 12% increase in
net rental income and
valuation gains.
See Note 6 to the
financialstatements.
As defined in the Glossary
on page 186, specific to
BTR assets only.
As defined in the Glossary
on page 186.
EPRA earnings is reported
on a pre-tax basis.
See ConsolidatedIncome
Statement onpage132.
Driving income returns
Our key performance indicators (KPIs) are aligned to the business strategy. Thesemeasures areusedbytheBoard
and SeniorManagementtoactively monitor business performance.
Net rental income
(£m)
BTR rental growth
(%)
EBITDA margin
(%)
EPRA earnings
(£m)
Profit before tax
(£m)
KPI definition
Comment
Link to strategy
Notes
Link to strategy Grow rents Simplify and focus Build on our experience
70.6
86.3
96.5
110 .1
12 3.6
21 22 23 24 25
0.3
4.8
8.0
6.3
3.4
21 22 23 24 25
50.3
50.5
53.2
53.7
55.5
21 22 23 24 25
14.2
28.2
39.8
48.0
53.7
21 22 23 24 25
152.1
298.6
27. 4
40.6
102.6
21 22 23 24 25
28
Grainger plc
Annual Report and Accounts 2025
EPRA NTA (Net Tangible
Assets) is the market
value of property assets
after deducting deferred
tax ontrading assets,
excluding intangible
assetsandderivatives.
The growth in the net
asset value of the Group
plus dividends paid in
the year, calculated as a
percentage of the opening
net asset value.
TPR is the change in
grossasset value (net
ofcapital expenditure),
plusproperty related net
income, expressed as a
percentage of opening
gross assetvalue.
Ratio of net debt to
themarket value
ofproperties on a
consolidated Groupbasis.
Average cost of debt for
the year including costs
and commitment fees.
EPRA NTA was flat at
298p per share reflecting
the resilience of our
asset class.
TAR was a 2.5% increase
on the prior year as NTA
was flat for the year.
Returns of 3.9%
demonstrating strong
operational performance
combined with a 0.7%
valuation increase.
LTV was broadly flat on
the prior year at 38.4%.
Average cost of debt
remaining relatively flat
at 3.3%
See page 34 for further
detail on EPRA NTA
and page 180 for EPRA
performance measures.
As defined in the Glossary
on page 186.
See Alternative
Performance
Measures onpage 123
for calculation.
See Alternative
Performance
Measures onpage 123
for calculation.
See Note 27 to the
financialstatements
forfurther detail
regarding capital
risk management.
Delivering capital returns
EPRA NTA
(pps)
Total Accounting return
(%)
Total Property
Return (TPR) (%)
Loan to value
(LTV) (%)
Cost of debt
(average) (%)
KPI definition
Comment
Link to strategy
Notes
Link to strategy Grow rents Simplify and focus Build on our experience
297
317
305
298 298
21 22 23 24 25
6.3
8.6
(1.9)
0.1
2.6
21 22 23 24 25
7.5 7.5
0.4
1.9
3.9
21 22 23 24 25
30.4
33.4
36.8
38.2
38.4
21 22 23 24 25
3.1 3.1
3.3
3.2
3.3
21 22 23 24 25
29
Financial statementsGovernanceStrategic report
Non-financial/Sustainability KPIs
Our customers
and communities
Our people Our impact on
the environment
We continue to invest in our
Customer Experience Programme
demonstrating our commitment to
our customers and communities.
We continue to enhance our
customer offering and are creating
thriving communities that enrich
the lives of the people within them,
enabling us to attract and retain
customers and benefit the local
communities we work in.
We put our people at the heart of
everything we do. We positively
engage with our colleagues and
continue to invest in the wellbeing
and development of our people.
Our ‘Outstanding’ rating in
our independent employee
engagement survey confirms that
we have a highly engaged and
happy workforce.
Continuing our progress in
measuring emissions and delivering
reductions, we achieved a significant
milestone in the year with the
successful validation of our new
emissions reduction target by SBTi.
We continue to engage with
our customers, our suppliers
and our industry to support the
successful implementation of our
environmental commitments.
+42pts
Customer Net Promoter Score
Outstanding
rating by colleagues in our annual
survey by Best Companies
-24%
1
reduction in Scope 1-2 carbon
emissions (location-based)
28%
Customer affordability ratio
88%
High response rate to our
employee engagement survey
-46%
1
reduction in Scope 3 carbon
emissions intensity per m
2
631
resident and community events
90%
Colleagues who provided their
ED&I data, demonstrating high
levels of colleague engagement
96%
EPC ratings A to C
(for BTR properties)
1. Target validated by SBTi. Progress reported vs FY23 baseline. Scope 3 target includes emissions from Capital goods and Downstream leased assets per m
2
residential floor area.
30
Grainger plc
Annual Report and Accounts 2025
Financial review
It was also another good year for sales
with £169m of sales delivered during the
year, demonstrating both the value and
liquidity of our asset base. Despite the
challenging macroeconomic backdrop
valuations were marginally up in the year
as we saw ERV growth of 3.2% offsetting
asmall outward yield shift.
Our balance sheet remains in a healthy
position with strong liquidity and a good
hedging profile. Both net debt and LTV
are broadly in line with the prior year.
With only c.£130m of committed capex
left to spend we will start using our
significant operating cash flows to lower
leverage by c.£300-£350m by FY29.
FY25 saw another strong year of growth in net rental income and earnings,
with good visibility of further growth to come. Strong occupational markets
with occupancy at 98.1% and like-for-like rental growth of 3.6% combined
withour pipeline deliveries saw total net rents grow by 12%. This resulted in
strong earnings growth with pre tax EPRA earnings up 12%, as we continue
totarget £60m for the coming year and £72m by FY29.
“ FY25 saw
another strong
year of growth”
Rob Hudson
Chief Financial Officer
Our dividend per share continues its
strong growth trajectory, increasing
by 10.1% to 8.31p on a per share basis
(F Y 24: 7.55p).
We also successfully converted to a REIT
in September 2025 marking a significant
milestone in Grainger’s transformation.
Converting to REIT status positions
Grainger as a more tax-efficient
investment vehicle, eliminating effective
double taxation for the business and
its Shareholders. The move unlocks
meaningful Shareholder value through
improved returns, strengthens the
Company’s ability to continue to grow
its dividend, and allows the business
to continue to enhance its operational
platform. In the year we have recognised
a tax credit of £123.6m as a result of
the conversion.
+12%
EPRA earnings (pre tax)
31
Financial statementsGovernanceStrategic report
Seraphina Apartments, Fortunes Dock cluster, Canning Town
Financial review continued
Financial highlights
Income returns FY25 FY24 Change
Rental growth (like-for-like) 3.6% 6.3% (270)bps
– BTR 3.4% 6.3% (290)bps
– Regulated tenancies 6.6% 6.6% –
Net rental income (Note 6) £123.6m £110.1m +12%
Adjusted earnings (Note 3) £91.0m £91.6m (1)%
EPRA earnings (Note 4) £53.7m £48.0m +12%
IFRS profit before tax (Note 3) £102.6m £40.6m +153%
Earnings per share (diluted, after tax) (Note 15)
1
27.3p 4.2p +550%
Dividend per share (Note 14) 8.31p 7.55p +10%
Capital returns FY25 FY24 Change
Total Property Return 3.9% 1.9% +200bps
Total Accounting Return (NTA basis) (Note 4) 2.6% 0.1% +230bps
EPRA NTA per share (Note 4) 298p 298p –
Net debt £1,463m £1,453m 1%
Group LT V 38.4% 38.2% +20bps
Cost of debt (average) 3.3% 3.2% +10bps
Reversionary surplus £131m £147m (11)%
1. £123.6m tax credit (17p) arising from REIT conversion. This does not impact the Net Tangible Asset (NTA) metric.
Income statement
The business continues to deliver very
strong growth in EPRA earnings, up 12%
to £53.7m (FY24: £48.0m) This was driven
by continued strong growth in net rents
of 12% combined with a strong focus on
cost efficiency.
Adjusted earnings were broadly flat at
£91.0m (FY24: £91.6m) as the sales profits
from our reducing regulated tenancy
business are replaced with rental income
from our pipeline. The lower sales profits
were in line with the smaller size of the
regs portfolio.
IFRS profit before tax was £102.6m
(FY24: £40.6m) as a result of positive
valuation movements.
Income statement (£m) FY25 FY24 Change
Net rental income 123.6 110.1 +12%
Mortgage income (CHARM, Note 20) 4.3 4.6 (7)%
Management fees and other income
1
6.1 8.1 (25)%
Overheads (36.7) (35.3) (4)%
Pre-contract costs (0.7) (1.0) +30%
Net finance costs (42.7) (38.8) (10)%
Joint ventures (0.2) 0.3 (167%)
EPRA earnings
2
53.7 48.0 +12%
EPRA EPS 7.3p 6.5p +12%
Profit from sales 37.3 43.6 (14)%
Adjusted earnings 91.0 91.6 (1)%
Adjusted EPS (diluted, after tax)
3
9.3p 9.3p –
Valuation movements
4
23.4 (39.4) +159%
Other adjustments (11.8) (11.6) (2)%
IFRS profit before tax 102.6 40.6 +153%
Earnings per share (diluted, after tax)
5
27.3p 4.2p +550%
1. Including LADs: “liquidated and ascertained damages” of £3.6m (FY24: £5.2m) which provide financial compensation for the loss
of rental income caused by delays to the practical completion of our schemes.
2. EPRA Earnings is a pre tax measure of recurring earnings from core operational activities. For more details see page 180.
3. Adjusted earnings per share includes tax of £22.2m (FY24: £22.9m) at the Group’s adjusted tax rate of 24.4%, adjusted or the
effect of REIT conversion (FY24: 25%).
4. Including £(59)m in H1 FY24 due to the removal of MDR; excluding this, underlying valuation movement was +£20m in FY24.
5. £123.6m tax credit (17p) arising from REIT conversion. This does not impact the Net Tangible Asset (NTA) metric.
32
Grainger plc
Annual Report and Accounts 2025
£110.1m
£123.6
£17.7m
£(6.3)m
£2.1m
FY24
Net rental
income
DisposalsRental
growth and
occupancy
BTR
investment
FY25
Net rental
income
130
120
110
100
90
80
70
60
50
Total LfL 3.6%
BTR/PRS LfL 3.4%
- New lets 1.8%
- Renewals 4.5%
Regulated
tenancies LfL 6.6%
+12%
£14m
Rental income
(£m)
Rental income
Net rental income increased by 12% to £123.6m (FY24: £110.1m), as we saw continued strength in occupational markets. The strong
£13.5m increase was driven by a combination of strong delivery of pipeline scheme launches which contributed £17.7m along with
another year of rental growth reflecting strong demand for our product.
Overall like-for-like rental growth was in line with our long run average at +3.6% (FY24: +6.3%) with the BTR portfolio continuing
to deliver at +3.4% (FY24: +6.3%), with rental growth on renewals of +4.5% (FY24: +6.8%) and +1.8% (FY24: +5.6%) on new lets.
While our new lets rental growth remained strong, the lower levels compared to FY24 were due to our focus on maximising our
occupancy levels. Our regulated tenancy portfolio also delivered strong rental growth at +6.6% (FY24: +6.6%). Looking forward we
maintain our guidance on rental growth in the coming year to continue in line with the long-run average rate of 3.0% - 3.5%,
with occupational markets back to normalised levels we expect to see some seasonality in rental growth return with H2 stronger
than H1 growth.
Gross to net for our stabilised portfolio was 25.0% (FY24: 25.0%) as we continue our strong focus on cost efficiencies.
Sales
FY25 was another good year for sales as we continue our non-core asset recycling strategy in order to fund the required capital
expenditure on our Committed Pipeline and the plan to lower leverage. Overall sales revenue was £168.9m, (FY24: £274.3m) with
£82.4m of sales revenue coming from BTR recycling and £86.4m from regulated sales. The continued delivery of sales saw pricing in
line with book values, justifying valuations.
Sales profits were lower at £37.3m (FY24: £43.6m) as expected reflecting a smaller regulated tenancy portfolio from which sales
profits are generated. Profits from BTR recycling are based on valuation and therefore profit margins are much lower.
Vacant property sales profits in the period were down (27)%, as expected delivering £18.5m (FY24: £25.4m). Vacancy rates were
slightly lower at 6.0% (FY24: 7.1%) with margins slightly down on prior year due to the tenancy mix. Pricing achieved remained
robust with sales values within 0.4% of vacant possession values.
Sales of tenanted and other properties delivered £18.7m of profit (FY24: £15.6m) from £121.2m of revenue (FY24: £194.0m).
FY25 FY24
Sales (£m) Revenue Profit Revenue Profit
Residential sales on vacancy 47.6 18.5 54.9 25.4
Tenanted and other sales 121.2 18.7 194.0 15.6
Residential sales total 168.8 37.2 248.9 41.0
Development sales 0.1 0.1 25.4 2.6
Overall sales 168.9 37.3 274.3 43.6
33
Financial statementsGovernanceStrategic report
Financial review continued
Overheads
Overheads increased by 4% in the period to £36.7m (FY24: £35.3m) as a result of wage growth across our employee base.
Looking forward we see the opportunity to remove £2m of costs from overheads of which we expect to deliver £1m of these
savings in the coming year. This will ensure that overheads will not increase in the next two years.
Balance sheet
Our BTR portfolio now represents 84% of our operational portfolio given the success of both our pipeline delivery and regulated
tenancy recycling.
LTV was broadly flat on the prior year at 38.4% (FY24: 38.2%) reflecting investment. Looking forward, we plan to lower net debt by
c.£300-£350m by FY29 in order to mitigate the impact of rising finance costs as ourlow rate hedging rolls off. This will be funded by
our strong operating cash flows.
EPRA NTA was flat at 298p per share (FY24: 298p per share) reflecting the resilience of our asset class against a backdrop of
macroeconomic uncertainty.
Market value balance sheet (£m) FY25 FY24
Residential – BTR 2,846 2,708
Residential – regulated tenancies 503 591
Residential – mortgages (CHARM) 49 57
Forward Funded – BTR work in progress 223 266
Development work in progress 93 84
Investment in JVs/associates 93 91
Total investments 3,807 3,797
Net debt (1,463) (1,453)
Other liabilities (61) (48)
EPRA NRV 2,283 2,296
Deferred and contingent tax – trading assets (64) (76)
Exclude: intangible assets (2) (2)
EPRA NTA 2,217 2,218
Add back: intangible assets 2 2
Deferred and contingent tax – investment assets
1
(1) (113)
Fair value of fixed rate debt and derivatives 60 88
EPRA NDV 2,278 2,195
EPRA NRV pence per share 307 309
EPRA NTA pence per share 298 298
EPRA NDV pence per share 307 295
1. £123.6m tax credit (17p) arising from REIT conversion. This does not impact the Net Tangible Asset (NTA) metric.
The Kimmeridge, Oxford
34
Grainger plc
Annual Report and Accounts 2025
Property portfolio performance
Over the year our portfolio valuation was up overall by 0.7%.
Our BTR portfolio grew 1.1% over the year which saw strong ERV
growth of 3.2% which was partly offset by a small outward yield
movement in the period. Valuations in the regulated portfolio
were largely flat in the year.
Portfolio Region
Capital
value
Total valuation
movement
£m £m %
BTR London & SE 1,378 7 0.5%
Regions 1,468 24 1.6%
BTR total 2,846 31 1.1%
Regulated
tenancies
London & SE 447 (3) (0.7)%
Regions 56 – (0.1)%
Regulated tenancy
total
503 (3) (0.6)%
Operational
portfolio
3,349 28 0.8%
BTR development 316 (2) (0.6)%
Total portfolio 3,665 26 0.7%
Financing and capital structure
Net debt was broadly flat during the year at £1,463m
(FY24: £1,453m), however it was down from the half year position
of £1,475m. The significant investment in our pipeline of £133m
was offset by our continued asset recycling strategy generating
£174m of net sales proceeds. With only c.£130m left to spend
on our Committed Pipeline, we will start to use operational cash
flows to lower net debt from FY27.
We have minimal refinancing risk with an average debt maturity
of 3.9 years including extension options. We continue to benefit
from a very strong hedging profile, which is in place until FY29
and with our average cost of debt remaining relatively flat at
3.3% (FY24: 3.2%). Looking forward we plan to lower our net
debt by £300-£350m over the next four years, which would
equate to an LTV of c.30% and c.8x net debt to EBITDA which we
see as the appropriate capital structure in this current interest
rate environment.
FY25 FY24
Net debt £1,463m £1,453m
Loan to value (LTV) 38.4% 38.2%
Cost of debt 3.3% 3.2%
Headroom £532m £509m
Weighted average facility maturity (years) 3.9 4.7
Hedging 100% 95%
18p (11)p
1p
(8)p
298p
298p
FY24 EPRA
NTA
FY25 EPRA
NTA
Net rents, fees
& income
Overheads &
finance costs
Dividends, tax
& other
Valuation
320
310
300
290
280
270
260
EPRA net tangible assets (NTA)
(Pence per share)
Summary and outlook
FY25 was yet another year of strong growth in net rents and
earnings as we continue to deliver compounding growth. As we
start our next phase of growth as a REIT, we are confident of
the outlook and retain our prior guidance of targeting pre tax
EPRA earnings of £60m for FY26 and £72m by FY29, a period
over which we will absorb the substantial headwind of higher
interest rates. This continued growth despite the macroeconomic
headwinds is a testament to the resilience of our asset class and
the excellence of our operating platform.
Rob Hudson
Chief Financial Officer
19 November 2025
The Kimmeridge, Oxford
35
Financial statementsGovernanceStrategic report
Sustainability
is embedded
through the
business
This section of the Report includes our Sustainability
reporting, including TCFD andthe SECR Disclosure.
Further information on our Sustainability activities
and performance is also included in our Responsible
Business Report (see page 92) and is also available
on ourwebsite at corporate.graingerplc.co.uk/
responsibility
In this section
Grainger's approach to sustainability 37
Our people 38
Our assets 44
Our environment 46
Streamlined Energy and CarbonReporting
(SECR)
48
Task Force on Climate-Related Financial
Disclosures (TCFD)
53
Wellesley, Aldershot
36
Grainger plc
Annual Report and Accounts 2025
Positive outcomes
Being a responsible business is core to Grainger’s purpose
to enrich people’s lives by providing high-quality rental
homes. We are committed to delivering positive impacts
for our customers, colleagues and communities and for
theenvironments in which we operate.
Grainger’s approach to sustainability
Strategy
Delivering on our sustainability objectives is central to Grainger’s
business strategy and is included in our key decision-making, for
example through the inclusion of sustainability requirements
in relevant policies and processes, including our asset hierarchy
policy and the specifications for new BTR developments.
This year we have also continued to develop our net zero asset
plans for our long-term hold properties and we have invested
inenergy efficiency improvements in our properties.
See page 56
Metrics and targets
Grainger’s new science-based emissions reduction target was
validated during the year by the Science Based Targets initiative
(SBTi). Our target includes our Scope 1 and 2 emissions and our
key Scope 3 emissions sources of development-related emissions
and emissions from our customers using energy in their homes.
See page 52
People
• Deliver positive social
value contribution
to our customers and
local communities.
• Ensure Grainger's workforce
is reflective of society.
Assets
• Deliver enhanced
investment decisions
through incorporating
sustainability considerations
including risks, costs
and returns.
Environment
• Achieve our SBTi validated
science-based emissions
reduction target for 2030
and deliver Grainger’s Net
Zero Carbon Pathway.
See page 46 See page 44 See page 38
Our commitments
Governance
The delivery of our sustainability programme is monitored with
oversight from the Board through our sustainability focused
Responsible Business Committee, our Executive Committee and
our internal Oversight Committees including our Investment
Committee, our Operations Board and our Development
Board. During the year we also published a new Supplier Code
of Conduct, to ensure that our responsible business practices
areincluded throughout our supply chain.
See page 92
Risk management
All sustainability-related risks are monitored and assessed in
accordance with our risk framework. Physical and transition
climate-related risks together with environmental impacts and
opportunities are assessed on our existing portfolio and pipeline
assets regularly. The assessment results are incorporated into
our investment, asset management and refurbishment decisions
to ensure that we retain and promote a resilient and highly
energy efficient portfolio.
See page 69
37
Financial statementsGovernanceStrategic report
“ Building better
communities
together.”
Our people
Creating inclusive communities for
colleagues and customers.
Our commitment to building inclusive
communities is at the heart of everything we
do for both our colleagues and customers.
Guided by our ‘One Grainger’ culture, we
strive to foster an environment where
everyone feels valued, respected, and
empowered to contribute.
This year marks an exciting milestone with
the introduction of our new HR system,
People Hub, which enables us to support
our colleagues more effectively and
ensures that everyone has access to
theresources they need to thrive.
Sustainability continued
38
Grainger plc
Annual Report and Accounts 2025
With people at the heart of
everythingwe do, we are
committedto colleague wellbeing
and development, as well as leading
the way in ED&I. Our strong levels
ofcolleague engagement is reflected
in our inclusion within the Top50
Employer list and our Outstanding
award from Best Companies.
People Strategy
Our People Strategy is central to
everything we do, creating a culture of
strong engagement which is inclusive
and supports our colleagues to develop.
This year we have focused on the
implementation of a new HR System
creating a central home for our people
data, enabling smarter decision-making,
streamlined processes and an enhanced
colleague experience.
Our Culture
The way in which we deliver our Grainger
values, and in particular People at the
Heart, continues to be a key driver of how
we engage with colleagues, including the
retention, attraction and development of
high performing talent in the business.
Our colleague-centric approach has
led to a refresh of our One Grainger
culture: acollaborative working style
where diverseexpertise comes together
to definethe right way of doing things,
attheright pace, by the rightpeople,
toachieve shared success.
Wellbeing
Since the implementation of
our WellbeingStrategy, we have
continuedtofurther build our approach
to supporting colleague wellbeing.
Our specially dedicated Wellbeing Hub
supports the delivery of our Wellbeing
Strategy with guidance, information,
an events calendar and mental
health champions.
Key programmes include access to
a rangeof resources and wellness
campaigns, promoting a healthy work
life balance.
By prioritising our colleagues’ overall
wellbeing, we are committed to fostering
asupportive andresilient workplace.
Investing in colleague
developmentand skills
We continued to invest in leadership
development, with a strong focus on
enhancing people management capability
and team performance. A new soft
skills bitesize training programme was
introduced on key people practices and
modules were delivered for colleagues to
support their continuous development.
Our commitment to supporting
careers at Grainger and sustainably
growing our talent has enhanced our
internal mobility and cross-skilling of
colleagues. We continue to support
growth opportunities through
promotions and secondments across
multiple departments, fostering
broader organisational knowledge
andcareer progression.
The Career Development Framework
is embedded within our Operations
team which has resulted in a
numberofpromotions of colleagues
who havesuccessfully completed their
framework pathway. This has expanded
into Finance, Procurement and IT
functions as we continue to invest in
colleague development.
We have continued to utilise the
Apprentice Levy and have supported
colleagues to achieve apprenticeships on
Customer Service, Data and Chartered
Management Institute (CMI) qualifications.
In addition we have supported
other formal qualifications to
assistcolleaguesintheir roles.
We launched our Grainger Mentoring
Programme for the fourth year, based
on the positive feedback from both
mentors and mentees who participated
in previous cohorts. The programme
has covered development areas such as
technical expertise, management, and soft
skills. It also enables cross-collaboration
among various departments and sites,
encouraging the exchange of knowledge
and perspectives.
We continue to develop the data literacy
of teams across the business and build
on the skills of individuals with enhanced
training from data apprenticeships to an
AIrelated master’s degree.
Regarding security we have continued
with the regular online uSecure security
training, which keeps key issues and
threats at the forefront of our colleagues’
minds. This is reinforced with simulated
phishing attacks. We also conduct
business system training particularly
linked to the release of new capability
andupdated workflows to our users.
Ensuring Grainger’s
workforce is engaged
andreflective of society
90%
(2024: 84%)
We hold ED&I data for 90%
of colleagues
11
th
FTSE Women Leaders
Grainger achieved 11th (2024: 19th)
out of 250 companies in the
FTSE Women Leaders review, an
independent evaluation against
gender-focused targets.
39
Financial statementsGovernanceStrategic report
* The ethnicity data is derived from our voluntary workforce diversity data tracking questionnaire, which is undertaken annually, and this year
we hold 90% of colleagues ED&I data. This diversity data ensures that we can better understand the make-up of our workforce and support our
colleagues. Our workforce diversity aspiration is to reflect the communities in which we operate, and by capturing this data we are able to assess
how our workforce compares to our local communities and develop action plans accordingly. By comparing our data to the 2021 Census data, we
have identified that in the North East, one of our major places of employment, our colleague diversity is in line with regional ethnicity demographics.
In London and the South East, our other major places of employment, whilst our workforce is broadly reflective of the regional population, we are
looking at how we can improve ethnic diversity as part of our ongoing commitment to support increased diversity across the business including in
our Senior Management. For additional Board and Senior Management diversity reporting, see our Governance report on pages 90-91.
Aninclusive workplace – ED&I
We achieved the National Equality
Standard in 2024, which is the UK’s
leading benchmark in ED&I and we
remain committed to leading the way
inour approach.
Our ED&I Steering Committee, continues
to work alongside our colleague-led ED&I
Network, which has delivered a series of
engagement initiatives throughout the
year, all celebrating diversity at Grainger.
A significant enhancement to the ED&I
Network has been the integration of
Wellbeing into its scope, which has
playeda vital role in expanding the
Network’s reach.
This addition was embedded
following feedback from colleagues
in theWellbeing Survey in November
2024, where the suggestion was made
to bring Wellbeing into the Network.
Many initiatives and events are naturally
interconnected and are intrinsically
linked which supports our ED&I and
Wellbeing agenda.
We also continued to participate in the
Workforce Disclosure Initiative (WDI),
delivering year-on-year improvements.
This year, we achieved the highest
score yet at 98%, a score placing
Grainger amongst a very small
number of organisations, leading on
workforce disclosures.
We have updated our ED&I training
by delivering training on Unconscious
Bias and Mental Health Awareness for
People Managers, who have recently
joined Grainger. This was delivered
through e-learning modules by ENEI
and is also available to any colleague
seekinga refresher.
This was the fourth year we have
issued our voluntary Workforce ED&I
questionnaire, and we now hold 90%
of our colleagues data (2024: 84%).
The information we obtain helps
us to understand the diversity of
characteristics within our workforce and
to tailor our People Strategy accordingly.
Ethnicity split*
(data as at 30 September 2025 – excludes NEDs)
Gender split
(data as at 30 September 2025 – excludes NEDs)
Total colleagues
372
(2024: 367)
219
Female
(2024: 210)
219153
153
Male
(2024: 157)
Female 9
Male 17
White
Asian or
Asian British
Black or
Black British
Mixed or
Multiple Ethnic
Any other
Prefer to
self describe
Prefer not
to say
Senior
Management
Female 55
Male 53
Management
Female 43
Male 23
Support
Female 47
Male 25
Associate
Executive Directors
(Main Board)
Female 1
Male 1
Executive
Committee
Female 3
Male 5
Female 61
Male 29
Onsite
Sustainability continued
Grainger colleagues England and Wales 2021 census
Breakdown by seniority
8.8%
9.3%
4.8%
4.0%
4.2%
2.9%
0.3%
2.1%
1.5%
0%
1.2%
0%
79.2%
81.7%
40
Grainger plc
Annual Report and Accounts 2025
During the year, we have taken the
following steps tosupport colleagues:
• We are members of Carers UK
whichprovides support, guidance
andresources to colleagues via an
external platform. We celebrated
Carers Week with an education
sessiondelivered by Carers UK.
• We celebrated International
Women’sDay and Pride with panel
events featuring colleagues who
sharedtheirlived experiences.
• The ED&I Network delivered new
awareness initiatives focusing on
Autismand Social Mobility.
• For office-based colleagues, we
haveahybrid working practice
with core officedays and flexibility
arounddaysworked from home.
• We are proud to sponsor a second
bursarystudent through the Worshipful
Company of Chartered Surveyors
(WCCS) to study towards a degree in
Urban Planning & Real Estate.
• We are members of Real Estate Balance
which is an organisation focused on
promoting equity, diversity and inclusion
within the Real Estate Industry.
• Our commitment to careers in real
estate is also supported by our
active engagement with the WCCS
as we continue our partnership and
support students into thesector on
anongoing basis.
People Hub
We have invested in our HR
Technology Platform with a modern
system which will support our
People data and Payroll processes.
Colleagues were engaged on a poll
to name the new system, People
Hub, and the system architecture
was designed and built with key
stakeholder engagement.
The new HR System will play a
key role in supporting colleague
engagement by providing a one
stop platform for all HR processes.
Our colleague experience has been
enhanced by introducing a self-
service functionality, providing a
quick and efficient way to manage
data. This supports our culture of
continuous improvement.
41
Financial statementsGovernanceStrategic report
Sustainability continued
Our purpose
Grainger’s purpose is renting homes and
enriching lives by providing high‑quality
rentalhomes and great customer service.
Our values
Our values help us fulfil our purpose. They
direct how we make choices and perform at
our best. They set us apart for our customers,
colleagues, Shareholders and partners.
People at the heart
We want our customers to feel safe, secure and
happyin their homes and to stay renting with us
foraslong as they wish.
Which is why we put people at the centre of
allour thinking – in how we create and operate
Grainger homes.
Leading the way
We’re ambitious about giving people the best renting
experience and never stop finding smart and creative
ways to help them enjoy renting with us.
We know that leading the way in our sector helps
our Company performance and our customers
andcolleagues to get more from their lives.
Every home matters
We’re passionate about providing every customer
with a great place to rent that they can make their
home. Because we know how much a good home
matters to everyone’s quality of life.
We are proud to provide homes and care about the
standards of our homes and services we offer.
Exceeding expectations
We’ve been a professional landlord for over 100 years,
so we know what we’re doing and what our customers
need to enjoy their homes in full.
But none of us, in any role, only does what’s necessary.
We take ownership of what we do and go beyond
expectations, to deliver more to our customers,
eachother, our investors and our partners.
42
Grainger plc
Annual Report and Accounts 2025
Giving back to local charities
We have continued to enhance
community engagement plans at all
our BTR properties. Over the year
we partnered with over 30 local
charities across our portfolio, providing
opportunities for our customers and
colleagues to give something back to
theirlocal communities.
A key focus in the year was building
resident engagement with many of our
sites introducing dedicated Community
Boards in reception areas and hosting
charity partners at sites so our customers
can see first-hand how their support is
helping to benefit their local community.
Colleagues across the business including
our on-site Resident Services Teams have
volunteered their time, supporting local
charities and environmental projects
including volunteering with food banks
and charities, distributing donations to
people who are homeless and undertaking
clean-up projects in nature reserves and
green spaces near to our properties.
During the year, customers and colleagues
took part in fundraising initiatives for
charitable causes. For example:
• Members of our Leeds cluster
participated in a Yorkshire peak hike
raising funds for Emmaus.
• Manchester cluster colleagues
participated in the Great Manchester
Run raising funds for Mustard Tree.
• Our North London team and customers
undertook a sponsored walk of the
Victoria London underground line
raising money for suicide prevention
charity CALM.
• Colleagues across the business continue
to support local and national charity
partners including colleagues from
the London office who took part in
the LandAid SleepOut and colleagues
from our Newcastle head office who
participated in volunteering sessions
with local charity Changing Lives.
We also continue to support the
LandAid BTR Pathfinder programme
providing discounted homes to charities
to accommodate young people at risk
of homelessness. We have renewed our
tenancies with the charity partners we are
working with in Manchester and Sheffield.
One of the homes pledged through the
programme now has a new resident with
the first having successfully moved on
intopermanent accommodation.
LandAid has partnered with HACT to
calculate the social value of the homes
provided through the BTR Pathfinder
programme and the social value
generated from Grainger’s donation
is £125,000. This includes a range of
wellbeing measures including moving into
secure housing, financial independence
and health benefits.
Delivering social value through
oursupply chain
Expanding our social value programme
to our supply chain has been a long-term
goal and this year we began partnering
with our key suppliers to make a
difference in the areas where we operate.
Our furniture provider Loft has hosted
Grainger colleagues at tree planting days.
We promote our social value objectives
with our key suppliers with a view to
getting them involved in local initiatives.
For example, during the year we hosted
community clean up days with our repairs
and maintenance supplier at our sites
The Gardens in South East London and
Berewood in Hampshire. Our supplier
carried out small handy jobs for customers
and skips were provided for free rubbish
disposal, helping minimise waste and
promote a pleasant living environment.
Customers also had the opportunity to
getto know their neighbours and their
local Grainger team as a result.
Our communities
Grainger’s community engagement plans encourage our customers and our colleagues to build strong local
relationships that create thriving communities in and around our properties.
Providing safe and secure
socialhomes
Grainger Trust is a for profit regulated
provider of social housing and is a wholly
owned subsidiary. Grainger Trust owns and
operates our affordable housing portfolio
which includes over 1,000 homes.
Our affordable housing buildings operate
on a tenure blind basis, which means our
Grainger Trust customers benefit from
enhanced service delivery and higher
quality homes. During the year Grainger
Trust underwent a routine inspection by
the Regulator for Social Housing (RSH),
which included assessment against the
Regulatory Standards covering Consumer,
Governance and Viability.
We launched new Grainger Trust
homes at Cobalt House in Bristol
where we are providing safe and secure
homes for residents coming from
diverse backgrounds including care
settings, homelessness and temporary
accommodation. Our on-site Resident
Services Team has received additional
training to meet the needs of our
residents, including safeguarding,
safety and wellbeing support for
vulnerable customers.
At all of our Grainger Trust sites, our teams
work with local stakeholders to signpost
customers to local support services and
have achieved a customer satisfaction
rating of 80% asaresult of their efforts.
The Grainger Gather resident event at Clippers Quay, Salford
43
Financial statementsGovernanceStrategic report
The Mint, Guildford
Sustainability continued
Our assets
Through our acquisition due
diligence, refurbishment
programmes and operational
strategies we are investing in
assets which deliver long-term
returns, climate resilience and
customer satisfaction.
“ The Mint provides easy
access without any noise
issues, thanks to its
triple‑glazed windows.”
Fernando,
Grainger customer
44
Grainger plc
Annual Report and Accounts 2025
Driving asset energy
and carbon reductions
Following the successful pilot of net
zero asset plans undertaken on our
long-term hold assets last year, during
FY25 we havecontinued to roll out the
programmeto our remaining older assets.
The asset plans identify communal and
apartment level improvements that will
support Grainger’s long-term planning
for investment in energy efficiency
and carbonreduction. The findings are
included in our asset hierarchy reviews
which determine which properties are to
be refurbished, repositioned or recycled.
For example, the assessment
completed at Winchester Park in
Southwark recommended replacement
of the heatingsystems, roof fabric
improvements, lighting upgrades and
installation of water efficient fixtures
and mechanical ventilation with heat
recovery(MVHR).
Feasibility studies are also progressing
in relation to potential improvements at
our properties as a direct result of the
assessments. These include assessing
the potential for installing regenerative
lift drives.
We have also completed a review of
the scope to enhance our renewable
energy generation through rooftop solar
provisionacross our portfolio. A new
solar array was installed on Nautilus
Apartments, Fortunes Dock cluster,
Canning Town during the year.
Investment in emissions reduction
initiatives is considered within our
long-term financial planning and
subject to cost/benefit analysis
to ensure our properties remain
affordableforour customers.
Investing in keeping our homes
resilient and secure
To future-proof our buildings and ensure
they align to our commitment to provide
our customers with a best-in-class
rental experience, we have continued to
explore and where appropriate invest in
smart technology.
Smart lighting and heating, ventilation
and air conditioning (HVAC) controls are
delivering energy efficiency improvements
and master switches make it easy for our
customers to control their energy use.
We have also continued to roll out smart
meters to all eligible utility supplies
across our portfolio and are educating
our customers on how to utilise their
smart meters to monitor and minimise
their energy consumption. The data
and insights gathered from the smart
technology systems in our buildings help
us better understand how our customers
are utilising our properties and how to
keep our residents safe, healthy andsecure
in their homes.
A Health, Safety and Security Week held
in our BTR buildings shone a spotlight on
how we design and operate our properties
in alignment with our Live.Safe agenda
and shared essential safety tips with
our customers. Residents participated
in a range of activities and interactive
sessions, including a child safety seminar
organised in partnership with charity
NSPCC, meetings with their dedicated
facilities manager, apartment safety
walkthroughs and introductions to
localemergency services.
Protecting our future investments
As we diversify our growth through the
acquisition of stabilised assets in addition
to the development of new buildings, we
have further enhanced the sustainability
aspects of our Investment Committee
process. All potential investments
undergo a thorough assessment including
environmental and social criteria, covering
matters such as overheating potential,
the availability of green spaces and
accessibility of the site.
We also model the potential impacts of
any proposed acquisition on our energy
and carbon reduction targets.
Following the acquisition or development
of a building, comprehensive post
completion reviews are undertaken for all
projects, with any sustainability-related
lessons learned being incorporated
alongside learnings from all areas of
Grainger’s operations.
We have also recently undertaken
a comprehensive review of physical
climate-related risk exposure for all
assets within our standing portfolio and
pipeline. The findings from the assessment
inform mitigation measures and business
continuity plans for our assets.
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Financial statementsGovernanceStrategic report
Solar panels at The Kimmeridge, Oxford
Sustainability continued
Our environment
Securing our future
This year Grainger’s sustainability leadership
was recognised through achieving validation
from the SBTi for our emissions reduction
target and being added as a constituent of the
Dow Jones Best‑in‑Class Indices for Europe for
2025. These achievements demonstrate that
our emissions target is robust and our overall
approach to sustainability is sector‑leading.
“ The insulation is
superb! We rarely
need the heating.”
Jeremy,
Grainger customer
46
Grainger plc
Annual Report and Accounts 2025
Recycling initiatives are part of our Living a Greener
Life customer engagement campaign
Delivering science-based emissions
reductions
We were proud to achieve a key milestone
in the year, receiving validation for our new
emissions reduction target. Covering our
Scope 1 and 2 emissions and key Scope 3
emissions sources, setting our target is the
culmination of our journey to understand
the full carbon impact of our operations.
This process has enabled us to develop
long-term emissions reduction pathways
aligned to the UK Government’s carbon
commitments and the Paris Agreement.
Our science-based target is a near term
target which covers the first stage of our
Net Zero Transition Plan through to FY30.
Our strategy for achieving the target
aligns to our existing Net Zero Carbon
Pathway and includes:
• Improving the energy efficiency of
our portfolio.
• Delivering our commitment to phase
out fossil fuel heating systems in
our buildings.
• Enhancing renewable energy
generationacross our portfolio.
• Reducing embodied carbon from the
development and refurbishment of
our buildings.
• Engaging with our customers, suppliers
and industry bodies to deliver emissions
reductions across our value chain.
The Scope 3 emissions sources included
in our science-based target are associated
with our development and refurbishment
activities and with the energy utilised by
our customers in their homes.
Engaging with our supply chain and our
customers will be essential to the delivery
of the Scope 3 reductions required to
meet our targetand this is a key focus
of our NetZero Carbon Pathway and
related strategy.
We have already made strong
progresstowards achieving our targeted
reductions, with a 24% reduction in Scope
1 and 2 emissions and a 46% reduction
in Scope 3 emissions per m
2
in FY25
compared to the FY23 target baseline.
More information about our target and
our progress towards carbon reduction
isreported on page 52.
Engaging with our stakeholders
to scale up our impact
During the year Grainger participated in
the UK Green Building Council’s Supply
Chain Decarbonisation Task Group
which is developing guidance for the
realestate sector on how to decarbonise
supply chains through procurement
andsupplier engagement.
Our participation in this initiative enabled
us to exchange ideas and experiences with
other organisations across our sector and
within our supply chain, and to generate
ideas to enhance our supplier carbon
engagement programme.
Our engagement was recognised with a
leading Supplier Engagement Assessment
rating of ‘A-’ by CDP.
To support our customers in reducing
their energy consumption and wider
environmental impacts, we have continued
to implement our environmentally focused
customer engagement campaign – Living
a Greener Life. We held Living a Greener
Life Week which included events in our
buildings and introduced a new dedicated
area for home user guides and green tips
in our updated MyGrainger app.
Our site-based energy champions develop
bespoke communications designed to help
our customers live greener in our buildings
and conduct regular site walkarounds to
explore energy saving opportunities.
Our energy champions meet monthly to
share feedback and have delivered energy
consumption reductions of up to 10% in
our buildings. Training has been delivered
to all colleagues across our Operations
Division, focusing on how colleagues can
support Grainger achieving our science-
based target.
We have continued to engage with peers
in our industry and with Government
policy-makers on initiatives that will help
our sector decarbonise.
During the year, we hosted a workshop
with Government in collaboration with
the British Property Federation to share
learnings and inform the development of
new Minimum Energy Efficiency Standards
for the PRS.
Grainger representatives have also
contributed to Government working
groups reviewing policy requirements for
electric vehicle chargepoint infrastructure,
rooftop solar provision on new homes,
facilitating increased adoption of smart
meters and the Energy Performance
Certificate (EPC) reforms.
We were also proud to join the Manchester
Good Landlord Charter, a voluntary
initiative to raise rental standards in
Greater Manchester which includes
criteria on resident affordability and
energy efficiency.
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Financial statementsGovernanceStrategic report
Streamlined Energy and Carbon Reporting Disclosure
Scope 1 and 2 Global GHG emissions data for period 1 October 2024 to 30 September 2025.
Emissions (tonnes of CO
e) from
2024
location-
based
2025
location-
based
Trend
location-
based
2024
market-
based
2025
market-
based
Trend
market-
based
Scope 1 (Fuel combustion in vehicles and buildings) 402 207 -49% 402 207 -49%
Scope 2 (Electricity) 1,394 1,248 -11% 112 83 -25%
Total footprint 1,796 1,455 -19% 514 290 -44%
Outside of Scopes (Biogenic emissions) 1,694 2,014 19% 1,694 2,014 19%
Company’s chosen intensity measurement:
Emissions reported above per m
2
Gross Internal Area
1
0.0022 0.0017 -20% 0.0006 0.0003 -44%
Emissions reported above per owned unit
2
0.17 0.14 -20% 0.05 0.03 -44%
Emissions reported above per employee
3
4.90 3.91 -20% 1.40 0.78 -44%
Scope 3 Global GHG emissions data for period 1 October 2024 to 30 September 2025.
Emissions (tonnes of CO
e) from 2024 2025 Trend
Purchased goods and services
4
9,092 7,789 -14%
Capital goods
5
36,451 25,364 -30%
Fuel and energy-related activities
6
670 709 6%
Upstream transportation and distribution
7
2.7 3.2 19%
Waste generated in operations
8
9.5 0.1 -99%
Business travel (air, rail, vehicles and hotels)
9
158 125 -21%
Employee commuting
10
458 374 -18%
Upstream leased assets (office energy use)
11
89 80 -10%
Use of sold products 307 99 -68%
End-of-life treatment of sold products
12
77 32 -58%
Downstream leased assets (customer energy use)
13
PRS 13,576 12,762 -6%
Regulated tenancies 6,808 5,162 -24%
Commercial 1,167 904 -23%
Total 21,551 18,828 -13%
Investments (Residential – mortgages ‘CHARM’)
14
775 639 -18%
Total Scope 3 emissions
15
69,640 54,042 -22%
1. Gross Internal Area for Grainger’s residential portfolio (834,081 m
2
).
2. Number of owned units during the financial year, including units owned in Joint Ventures that are within Grainger’s operational control.
3. Total number of employees of Grainger plc on the last day of the financial year.
4. This has been calculated based on spend data using CEDA emissions factors and includes all operational expenditure not captured within other reporting categories.
5. This has been calculated based on spend data using CEDA emissions factors and includes all capital expenditure.
6. Includes WTT emissions from fuels and electricity transmission and distribution losses.
7. Includes emissions for courier services calculated from spend data.
8. Includes waste generated from two offices that Grainger leases from its landlords and estimated waste for other offices.
9. Includes business travel emissions from air, rail and vehicles. Optional hotel stay emissions are excluded and are 9.5 tonnes.
10 Employee commuting has been estimated from an employee survey. Optional working from home emissions are excluded and are 79 tonnes.
11. Includes landlord-obtained emissions from two offices that Grainger leases from its landlords.
12. Sold products emissions include in-use and end-of-life emissions for properties sold in the year that Grainger developed for sale which for 2025 comprises 10 units at The Boathouse, Clippers Quay
and one shared ownership home in the Grainger Trust portfolio.
13. Downstream leased assets – includes estimated customer energy use for Grainger’s portfolio of leased residential and commercial buildings, which has been calculated from a combination of actual
meter readings, extrapolation of actual data and estimation from Energy Performance Certificates (EPCs) and CIBSE benchmarks. 32% of data was calculated from actual meter readings.
14. Emissions from the ‘CHARM’ portfolio of residential mortgages calculated using the PCAF methodology for Grainger’s equity share.
15. Emissions from categories 9 (Downstream transportation and distribution), 10 (Processing of sold products) and 14 (Franchises) are not relevant to Grainger.
48
Grainger plc
Annual Report and Accounts 2025
Underlying global energy use data for period 1 October 2024 to
30 September 2025.
Energy use (kWh) 2024 2025 Tre nd
Electricity 6,722,407 7,032,970 5%
Natural gas 8,844,459 9,312,304 5%
District heating 13,726 16,281 19%
Biomass 925,042 983,391 6%
Transport fuel 129,984 102,752 -21%
Total energy use 16,635,618 17,447,698 5%
Summary
As a quoted company incorporated in the UK, Grainger complies
with the Companies Act 2006 (Strategic Report and Directors’
Report) Regulations 2013 and the Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018. Grainger reports all material GHG
emissions using tonnes of CO
2
equivalent (‘tCO
2
e’) as the unit
of measurement and reports energy use in kWh. Our reporting
period is 1 October to 30 September and we report energy use
and emissions for the previous year to show trends.
We report on all energy use and GHG emissions for the
operations within the boundaries of our financial statements.
All energy use and emissions data relates to emissions in the
UKand offshore area.
Between 2024 and 2025, energy consumption from our
propertyportfolio has increased by 5%. Grainger’s total
location-based GHG emissions have decreased by 19% and
market-based emissions have decreased by 44%.
We are reporting all relevant Scope 3 categories using
methodologies in line with the GHG Protocol Corporate
ValueChain (Scope 3) Standard.
Trends
Energy: Energy use across energy sources increased year-on-
year. This increase can in part be attributed to changes in the
property portfolio due to acquisitions. On a like-for-like basis,
only considering properties which were fully operational across
the two years, energy consumption has remained largely
consistent with a 2% increase. On a like-for-like basis, electricity
consumption has decreased 1% year-on-year due to energy
efficiency measures. Use of natural gas, biomass and district
heating consumption have all increased compared to FY24 due
to the colder weather experienced over the 2024-25 winter with
an increased number of heating degree days. Energy associated
with transport has reduced due to a reduction in the fleet.
Emissions: Our Scope 1 emissions have significantly decreased.
Over the last three years we have progressively moved sites
using natural gas onto a green gas contract. In FY25 this
coverage was extended to 95% of gas meters. Despite the
increase in electricity consumption, location-based Scope 2
emissions have decreased due to the reduction in emissions
intensity of the UK electricity grid. Market-based Scope 2
emissions have decreased as we have continued to increase
the coverage of renewable electricity with 94% of our portfolio
meters and 97% of electricity consumption now covered by a
renewable electricity tariff.
Methodology
Grainger uses the GHG Protocol Corporate Standard (revised
edition), Government Environmental Reporting Guidelines
2019 and ISO14064: Part 1 standard for its reporting, using the
operational control approach. We have used the UK Government
Conversion Factors for Company Reporting 2025 for emissions
calculations, including location-based Scope 2 reporting. For our
market-based emissions we have used contractual instruments
where there is data readily available and if unavailable, residual
mix emission factors from the Association of Issuing Bodies
European Residual Mixes 2024 for market-based reporting for
2025. We used emissions factors from the same sources in 2024.
We have reported on all energy use and emissions sources
required under the regulations. We purchase 100% renewable
electricity tariffs for 94% of our portfolio meters, which has
resulted in lower Scope 2 emissions using the market-based
approach compared to the location-based approach.
Scope 1 data
This includes landlord-obtained gas and biomass heating
consumed in common areas and by tenants on an unmetered
basis, gas consumed in Grainger’s offices, as well as fuel
consumption in vehicles owned or leased by Grainger.
Fugitive emissions are considered but in 2025 there were no
top-ups of refrigerants across properties and so no emissions
have been calculated.
Scope 2 data
This includes landlord-obtained electricity and district heating
consumed in common areas and by tenants on an unmetered
basis as well as electricity consumed by Grainger in its offices.
Scope 3 data
This includes all relevant Scope 3 categories.
Emissions from purchased goods and services, capital goods and
upstream transportation and distribution are calculated from
spend data using CEDA emissions factors. The 2024 emissions
data originally reported in 2024 was calculated using 2023 CEDA
factors, as the 2024 factors were released after the end of the
reporting period. Figures have since been recalculated using
2024 factors which are presented in this year’s report.
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Financial statementsGovernanceStrategic report
Fuel and energy related activities include well-to-tank
emissionsfrom fuels and electricity alongside emissions
fromthetransmission and distribution of electricity.
Waste generated from operations and Upstream leased assets
emissions have been calculated from waste and energy data
provided by landlords for Grainger’s occupied offices.
Where waste data was unavailable it has been estimated
using available waste data and employee headcount figures.
Waste data for confidential shredding has been calculated based
on actual waste data in FY25 and was previously calculated
based on spend data using CEDA emissions factors, which has
reduced emissions year on year.
Business travel emissions have been calculated from actual
mileage records and spend data. Optional hotel stay emissions
are calculated and are 9.5 tCO
2
e but are not included in
the reported figures to align to the GHG Protocol and SBTi.
Employee commuting has been estimated from an employee
survey and workforce data, whilst optional emissions from
employees working from home (79 tonnes in 2025) are also
calculated but excluded from the reported figures.
Sold products consists of units developed by Grainger for sale
which include units at The Boathouse, Clippers Quay and a
shared ownership unit on the Grainger Trust portfolio. Use of
sold products emissions have been estimated from actual energy
used in Grainger’s leased properties on the same estate or from
EPCs where no actual data is available. End-of-life treatment
of sold products emissions have been estimated using data
from Whole Life Carbon assessments undertaken on similar
Grainger properties.
Downstream leased assets includes emissions from energy
used by Grainger’s customers in our buildings and uses a
combination of actual energy data, extrapolation of actual data
to fill gaps in data for the same asset, and proxy data for similar
assets. Where no actual data or suitable proxy was available,
emissions have been estimated using data from EPCs and
CIBSE benchmarks.
Investment includes emissions from a portfolio of residential
mortgages (‘CHARM’) calculated using the PCAF methodology,
and are reported for Grainger’s equity share.
Energy use data
This includes purchased electricity, natural gas, biomass,
districtheating and transport fuels (petrol and diesel, which
have been converted to kWh from mileage records using
the UKGovernment conversion factors). Grainger has solar
photovoltaic panels generating electricity on a number of
properties, but the energy generated is exported to the grid
or used to supply building communal areas and is unable to
be reported.
Recalculations and estimation
We have recalculated emissions for 2024 in line with best
practice as we have been able toobtain more accurate and
complete data for Scope 1 and Scope 2 emissions from energy
consumption in our property portfolios. Properties which were
completed in 2024 for which no data was available for the prior
year’s reporting have been included and a small number of
recently completed properties are excluded from 2025 reporting
because data is not yet available. We will gather data in 2026 to
include these properties in our future reporting.
Where Grainger-obtained utility consumption data is partially
unavailable or unreliable for an asset, estimation has been
undertaken by extrapolating, first using data from the current
reporting period and if unavailable, data from the previous
reporting period. For 2025 8% of energy from fuels for Scope 1
emissions and 1% of electricity for Scope 2 emissions data has
been estimated.
All Scope 3 emissions have been calculated using the same
methodology in 2024 and 2025. Scope 3 emissions have been
recalculated from previously reported figures where improved
data collection resulted in more accurate input data and to use
the most recent CEDA emissions factors.
Streamlined Energy and Carbon Reporting Disclosure continued
Energy saving tips are shared with
customers during their move-in
50
Grainger plc
Annual Report and Accounts 2025
Intensity metrics
We have used three intensity metrics: emissions per
residential gross internal area (tCO
2
e/m
2
), emissions per
number of owned units (tCO
2
e/owned unit) and emissions
per number of employees (tCO
2
e/employee) to align with our
financial reporting.
The floor area of our portfolio has increased between FY24
and FY25 due to acquisitions. This, coupled with the decrease
in combined Scope 1 and 2 emissions, has resulted in a 20%
decrease in location-based emissions per m
2
Our investment
in new energy efficient rental homes has increased the number
of homes in the portfolio and improved the efficiency of
the portfolio, resulting in a 20% reduction in location-based
emissions per owned unit. There has been a small increase
in thenumber of employees which has a resulted in a 20%
decreasein location-based emissions per employee.
Energy efficiency measures
As part of our long-term asset management activities, we
undertake comprehensive refurbishments to the common parts
of our buildings and have a programme of rolling refurbishments
for units. These refurbishments include a number of energy
efficiency measures. For common parts a typical refurbishment
includes a lighting upgrade with installation of lighting controls,
and fabric upgrades where required. We have undertaken
major refurbishments to 8 assets over the last three years,
which included lighting upgrades, window replacements and
roof insulation. Comparing year-on-year energy use across
these refurbished assets, there has been a 32,761 kWh (14%)
reduction in energy use affecting our Scope 1 and 2 emissions.
The resulting emissions reductions primarily affect our Scope
3 emissions from Downstream leased assets, benefiting our
customers with lower energy consumption.
Refurbishments undertaken to individual units include many
energy efficiency improvements including draught-proofing,
installation of more efficient heating systems and insulation.
The resulting reductions in energy consumption are experienced
by our customers in their directly-purchased energy usage, and
are reflected in our Downstream leased assets emissions.
Customers energy use and emissions
Grainger’s customers purchase their own energy and data
privacy laws make it challenging to obtain actual customer
energy data which can be used to calculate actual emissions
for Downstream leased assets. Grainger has implemented
our Customer Emissions Strategy to improve data quality and
coverage of customer energy data. A green lease clause was
rolled out across Grainger’s PRS portfolio to enable customer
energy data to be collected and used for reporting purposes.
Meter readings have been taken when properties are void and
during property inspections where customers have provided
consent. The actual customer energy data that has been
collected has been extrapolated to similar properties in the
sameestate or portfolio.
Where no data is available we have used estimated energy
consumption data from Energy Performance Certificates or
CIBSE benchmarks. These figures do not take into account actual
residents usage patterns and the actual data gathered from
Grainger’s portfolio suggests our properties are operating more
efficiently than predicted. The coverage of properties with actual
data is increasing over time which will enhance the accuracy of
our emissions reporting. Grainger has a customer engagement
campaign Living a Greener Life which aims to engage our
customers on greener living and support them in reducing their
environmental impacts. For more information see page 47.
Supply Chain Emissions
Grainger reports supply chain emissions from Purchased goods
and services and Capital goods. These emissions are currently
calculated using spend data and CEDA emissions factors for
specific spend categories, however we have commenced a
long-term engagement programme with our key suppliers to
measure and report supplier specific emissions data. For more
information see page 47.
Capital goods include emissions from BTR development projects
and refurbishment. Development activity has reduced year
on year as we have had fewer homes under construction due
to additional planning requirements resulting from enhanced
building safety regulations. However, Capital goods still
represents our largest source of Scope 3 emissions for this
year. We are undertaking Whole Life Carbon assessments
for all future pipeline schemes which will enable us to more
accurately measure emissions from developments completing
infuture years.
Third‑party calculation and verification
SE Advisory Services has reviewed and analysed the data
provided by Grainger and has carried out calculations in-line with
best practice (see Methodology section). A separate SE Advisory
Services team completed verification of the following emissions
using the ISO 14064-3 standard:
GHG emissions 2025 GHG emissions (tCO
2
e)
Scope 1 emissions 207
Scope 2 emissions (location-based) 1,248
Scope 2 emissions (market-based) 83
Total (location-based) 1,455
Total (market-based) 290
Scope 3 emissions Category 1 7,789
Scope 3 emissions Category 2 25,364
Scope 3 emissions Category 6 125
Scope 3 emissions Category 13 18,828
Total verified Scope 3 emissions 52,106
The full verification statement is available on Grainger’s website
at corporate.graingerplc.co.uk.
A more detailed breakdown of our energy consumption
and carbon footprint for our property portfolios and the
methodology used is available in our EPRA Sustainability
Performance Measures Report, which is also available on
our website.
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Financial statementsGovernanceStrategic report
Progress against targets
Our new science‑based target
In the reporting year, Grainger’s science-based target was
validated by SBTi. The target is a near term target which is
as follows:
Grainger plc commits to reduce absolute Scope 1 and 2
GHG emissions 42% by FY2030 from a FY2023 base year
1
.
Grainger plc also commits to reduce Scope 3 GHG emissions
from capital goods and downstream leased assets 51.6% per m
2
residential gross internal area within the same timeframe.
The target includes Grainger’s most material emissions sources
to focus our energy and carbon reduction efforts on the areas
where we can make the most impact aligned to our business
strategy. Emissions from Capital goods includes our investment
in developing and refurbishing energy efficient homes for rent
and emissions from Downstream leased assets represent our
customers using energy in their homes.
Achieving our target will therefore require engagement
with our development supply chain and with our customers.
Engagement with our development partners and contractors
through our embodied carbon roadmap and engagement with
our customers through our Living a Greener Life customer
engagement campaign are key elements of our strategy and
more detail is provided on page47.
Progress against our target
All the emissions sources covered within the target are verified
by a third party as disclosed in this report. We have made strong
progress towards our target in the first two years since our
baseline year (FY23), achieving reductions of 24% in absolute
Scope 1 and 2 emissions and 46% per m
2
residential gross
internal area in Scope 3.
Reductions in our Scope 1 and 2 emissions are driven by the
transfer of our communal heating systems from natural gas to
green gas, energy efficiency improvements delivered to these
systems and the rationalisation and improved efficiency of
our fleet.
Our progress towards achieving our Scope 3 target is not
expected to be linear as it is linked to levels of development
activity. Development activity in FY24 and FY25 has been lower
than in our FY23 baseline year as we have had fewer homes
under construction due to additional planning requirements
resulting from enhanced building safety regulations.
Capital goods emissions also includes emissions associated
with asset repositioning and refurbishment activity which is
anticipated to increase as we grow through a combination of
development and acquiring existing assets. We continue to
collaborate with our development and refurbishment partners
toexplore embodied carbon reduction opportunities.
Our emissions from Downstream leased assets have reduced
as the energy efficiency of our portfolio increases due to our
strategy to invest in efficient new rental homes.
Strategies and actions taken
To achieve reductions across our direct operations and our
value chain, Grainger has implemented the following strategies
and actions.
Scope 1 and 2
Grainger has reviewed our fleet of vehicles, significantly reducing
the number of vehicles and ensuring all vehicles are now hybrid
models which has reduced the emissions associated with
the fleet.
Grainger has communal gas and biomass heating systems in a
small number of buildings where Grainger controls the plant and
purchases the fuel. All eligible gas supplies have been transferred
to a green gas contract and all communal heating systems have
been reviewed to ensure they are operating efficiently, with
improvements implemented.
Our programme to refurbish communal areas has continued
with the objective to significantly improve energy efficiency.
We have installed solar PV to an additional site, completed
window replacement projects at two assets and delivered
refurbishments to 14 properties over the past two years.
Scope 3
Grainger has continued to invest in improving the energy
efficiency of existing homes with over £11 million invested in
improvement works.
Grainger’s development projects are designed to our
specification which sets minimum energy efficiency requirements
and all pipeline projects are designed with low carbon heating
systems. Our contractors and development partners are required
to consider opportunities to reduce embodied carbon through
lean design and alternative materials and construction processes.
Our Living a Greener Life campaign continues to run across
ourproperties with communications designed to help residents
use less energy in their homes and support is on hand from our
site-based energy champions.
These initiatives are delivering improvements in energy and
carbon efficiency across our portfolio, placing us on track to
deliver our reduction targets.
Actions planned for FY26
Grainger has the following emissions reduction projects in the
implementation and planning phases:
• Undertaking energy audits across our portfolio to identify
further energy efficiency opportunities.
• Upgrading the communal areas of our properties including
installing regenerative lift drives and additional solar PV.
• Developing net zero asset plans for BTR properties, building on
the successful roll-out delivered across our PRS portfolio.
• Implementing a pilot of low carbon heating technologies
onaPRS asset.
• Continuing our investment in unit refurbishments to
enhanceenergy efficiency.
• Expanding our supplier carbon engagement programme.
Streamlined Energy and Carbon Reporting Disclosure continued
1. The target boundary includes land-related emissions and removals from bioenergy.
52
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Annual Report and Accounts 2025
Task Force on Climate-Related Financial Disclosures
Grainger has complied with the FCA’s UKLR in relation to TCFD
and we confirm that:
1. Our climate-related financial disclosures for FY25 are
consistent with the Task Force on Climate-Related Financial
Disclosures (TCFD) Recommendations and Recommended
Disclosures (as defined in Appendix 1 of the UKLR).
2. The detail of these climate-related financial disclosures is
conveyed in a decision-useful format to the users of this
Report and that these disclosures provide sufficient detail to
enable users to assess Grainger’s exposure to and approach
toaddressing climate-related issues.
In drafting this Report, we have also considered the
requirements of the IFRS S2 Sustainability Disclosure Standard
for Climate-related Disclosures and the draft UK SRS S2
Climate-related disclosures.
We are committed to providing comprehensive and transparent
disclosure on climate-related risks and opportunities and in
addition to the information included in this Report, Grainger
makes the following public disclosures:
1. Grainger’s Net Zero Carbon Pathway which provides a
summary of our Net Zero Transition Plan is published on our
website (corporate.graingerplc.co.uk).
2. Details on the recommended topics and metrics for Grainger’s
real estate portfolio are reported in the EPRA Sustainability
Report which is also published on our website.
3. We also respond annually to the CDP Climate Change
Programme and our responses are publicly available at:
https://www.cdp.net/en/responses
The following table signposts where further relevant
informationis provided in this Report.
TCFD recommendations Description Further information
Governance
1. Board oversight of
climate-related risks and
opportunities
The Board has oversight of the Company’s business strategy including
climate-related matters. On behalf of the Board:
a. the Audit & Risk Committee undertakes a twice-yearly review of the
Company’s principal risks and uncertainties including climate-related
risks; and
b. the Responsible Business Committee reviews climate-related risks and
opportunities, strategic implications and our Net Zero Transition Plan
including progress against the plan.
Audit & Risk Committee
Report page 95
Responsible Business
Committee Report
page92
2. Management’s role in
assessing and managing
climate-related risks and
opportunities
The Executive Committee assesses and manages climate-related risks and
opportunities using the Company’s risk management framework and by
operating a ‘three lines of defence’ model.
Risk Management and
Internal Controls page 62
Strategy
3. Climate-related risks and
opportunities over the short,
medium, and long-term
Climate-related risks are included in our principal risks and uncertainties.
Material climate-related risks and opportunities affecting the business
include:
a. over the short-term increasing regulation and flood risk; and
b. over the medium to long-term chronic temperature change andimpacts
on customer and investor demand.
Principal Risks and
Uncertainties page 69
4. Impact of climate-related
risks and opportunities
on the organisation’s
businesses, strategy and
financial planning
The potential impacts of climate-related risks and opportunities on our
business strategy and financial planning include increasing investment
in energy efficiency and electrification of our assets, meeting higher
stakeholder expectations and enhanced access to capital.
Principal Risks and
Uncertainties page 69
5. Resilience of the
organisation’s strategy
taking into consideration
different scenarios
We have assessed our property portfolio for transition risks and physical
risks under three scenarios and we believe the strategic focus on investing
in high-quality, energy efficient rental homes supports the Company’s
resilience in the short, medium and long-term.
TCFD Report page 58
Risk management
6. Processes for identifying
and assessing
climate-related risks
Climate-related risks are identified and assessed at business, portfolio and
asset level. Risks are assessed through our risk scoring tool in alignment with
all material risks.
Risk Management and
Internal Controls page 61
7. Processes for managing
climate-related risks
Climate-related risks are managed through our risk managementframework
and by the operation of the ‘three lines of defence’ model including through
regular reviews by the Executive Committee andthe Oversight Committees.
Risk Management and
Internal Controls page 62
53
Financial statementsGovernanceStrategic report
Task Force on Climate-Related Financial Disclosures continued
8. How processes for
identifying, assessing, and
managing climate-related
risks are integrated into
overall risk management
Climate-related risks are integrated into our risk management framework
which applies to all principal risks and uncertainties .
Risk Management and
Internal Controls page 61
Metrics and targets
9. Metrics to manage
climate-related risks
andopportunities
Management use KPIs to monitor and manage climate-related risks
andopportunities.
Non-financial KPIs
page 30
10. Disclosure of Scope 1, 2
and3 GHG emissions
Scope 1, 2 and 3 GHG emissions are included in our SECR Statement. SECR page 48
11. Targets used by the
organisation to manage
climate-related risks
and opportunities and
performance against targets
Grainger’s science-based target has been validated by SBTi.
Grainger has carbon related LTIP targets and progress against actions
contributing to these targets is reported throughout this Report.
SECR page 52
Directors’ Remuneration
Report page 113
Governance
Board oversight of climate‑related risks
and opportunities
On behalf of the Board, the Audit & Risk Committee and
the Responsible Business Committee have oversight of
climate-related risks andopportunities and this responsibility is
reflected in each of their Terms of Reference.
All Directors attend these Committee meetings which include
reporting on climate-related risks and opportunities as an
agenda item at least twice a year.
The Board includes Directors who have climate-related
expertise and experience and the Nominations Committee
conducts regular reviews of the Board’s composition which
includes reviewing the skills and experience of each Director.
The Board also as part of its annual effectiveness review
considers the balance of skills and experience on the Board and
its Committees to ensure it remains appropriate to oversee the
business’s strategies including those relating to climate-related
risks and opportunities.
The Responsible Business Committee meets twice a year
and receives an update on our Net Zero Transition Plan and
associated actions and workstreams, a regulatory update and an
overview of stakeholder engagement activity for climate-related
matters. It oversees the setting of climate-related targets
including approving the science-based target which was
validated by SBTi during the year, and the carbon metrics which
are incorporated into the LTIP performance conditions for
awards to the Executive Directors. Reporting related to this is
included in the Directors’ Remuneration Report on page 113.
A progress update on climate-related targets and other related
objectives is included as a standing agenda item at all meetings.
The Board considers climate-related risks and opportunities in
its reviews of the organisation’s strategy. Where applicable, the
environmental impacts of potential transactions and associated
trade-offs are recorded in Investment Committee papers,
ensuring climate-related risks and opportunities are considered
in all significant transactions. The Audit & Risk Committee
reviews the Company’s principal risks and uncertainties, which
include climate-related risks, at least twice a year and considers
Management’s mitigations and controls as part of this review.
Management’s role in assessing and managing
climate‑related risks and opportunities
The Board has delegated responsibility for the day-to-day
management of climate-related issues to the CEO and the
Executive Committee. The climate-related updates that
are provided to the Board and its Committees are reviewed
by the Executive Committee ahead of submission, and the
Executive Committee monitors progress against the Company’s
climate-related targets and objectives.
The Company’s principal risks and uncertainties, which include
climate-related risks are also reviewed at Executive Committee
meetings every six months. They are also considered at
meetings of relevant Oversight Committees which report into
the Executive Committee, including the Investment Committee
which considers climate-related risks and opportunities related
to property investments; and the Development Board which
considers environmental risks and opportunities related to
BTR development projects. These arrangements ensure the
controls and procedures to manage climate-related risks and
opportunities are integrated across the business functions.
The CEO and CFO attend meetings of the Executive and
Oversight Committees.
The CFO also has oversight of the Sustainability Team which
contributes to the day-to-day management of climate-related
risks and opportunities. Progress is monitored through quarterly
KPI reviews by the Finance Committee.
Grainger’s Internal Audit programme includes regular audits
of the Sustainability Team’s activities and key climate-related
processes and controls.
54
Grainger plc
Annual Report and Accounts 2025
Oversight Committees
Management
Committee
Considers
climate-related risks
and opportunities
related to day-to-
day management of
the business.
Investment
Committee
Reviews
climate-related risks
and opportunities
related to property
investments.
Finance
Committee
Oversight of the
Sustainability
function.
Receives regular
updates from Head
of Sustainability and
reviews climate-
related KPIs.
Operations
Board
Considers
climate-related
matters relevant to
the operations and
asset management
of the Company’s
property portfolio.
Development
Board
Considers
climate-related risks
and opportunities
related to
BTR development
projects.
Health & Safety
Committee
Considers
climate-related risks
and opportunities
impacting on
Health & Safety and
oversees the
Business Continuity
Programme.
Grainger plc Board
• Considers climate-related matters in reviewing the organisation’s strategy.
• Considers climate-related risks and opportunities in key decision-making.
• Receives regular sustainability updates incorporating relevant updates on climate-related targets, risks and opportunities.
Executive Committee
• Delegated responsibility for the day-to-day management of
climate-related issues.
• Reviews all climate-related updates provided to the Board.
• Reviews principal risks and uncertainties including climate-
related risks twice a year.
• Receives regular updates from the Head of Sustainability.
Responsible Business
Committee
Oversight of climate-
related strategies and
policies. Reviews climate-
related strategy, targets
and metrics, and risks and
opportunities twice a year.
Remuneration
Committee
Considers climate-related
metrics and targets
incorporated into Executive
remuneration.
Nominations
Committee
Reviews Board composition
and effectiveness
related to all duties
including sustainability.
Audit & Risk
Committee
Reviews principal risks and
uncertainties including
climate-related risks,
mitigations and controls at
least twice a year.
Climate Governance
Framework
55
Financial statementsGovernanceStrategic report
Strategy
Climate‑related risks and opportunities Grainger has identified over the short, medium, and long‑term
• Short-term risks are forward-looking to 2030, aligned to the time horizon used for the Company’s strategy, financial planning
andasset hierarchy planning.
• Medium-term risks are forward-looking to 2050, aligned to the UK Government’s net zero target and the timeline used for our
Net Zero Transition Plan.
• Long-term risks are looking beyond 2050 and are open-ended to reflect the full asset lifecycle, which can extend to 100 years
or beyond.
The potential climate-related risks and opportunities identified that could have a material financial impact on the Company are:
Category Sub-category Classification Risk / opportunity Timeline Company response
Transition Policy,
Legaland
Technology
Risk Costs and technology implications
of new legislation including new
building regulations
Short-term
(<2030)
– Specification for new developments
considers energy and carbon
Risk Potential for stranded assets if
properties do not comply with
Minimum Energy Efficiency
Standards
Short-term
(<2030)
– Refurbishments programme to increase
energy efficiency
– Policy engagement with Government
Market Opportunity Increased revenues from
development opportunities
meeting the increased demand for
energy efficient homes
Short-term
(<2030)
– Our sustainability approach including
climate-related strategies is integrated
into bid documentation for potential
developments and in reporting to
development partners
Opportunity Increased access to capital from
responsible investors
Short-term
(<2030)
– Sustainable Finance Framework
– Extensive sustainability disclosures to
investors
Risk Increasing costs and energy
security issues, resulting from
climate-related changes to the UK’s
energy sources and infrastructure
Short-term
(<2030)
– Energy broker partnership and central
energy contracts for Grainger procured
energy
– Refurbishments programme to increase
energy efficiency
– Investing in energy efficient buildings and
reducing our customers’ energy bills
– Reducing reliance on energy networks
operated by third parties and exploring
alternative energy supplies for new
developments
Reputation Risk Investment in the Company may be
impacted by investor responses to
climate-related issues
Short-term
(<2030)
– Climate-related criteria integrated into
asset investment and recycling strategies
– Strategy to enhance the energy efficiency
of our assets and ensure compliance
Market Risk and
Opportunity
Impacts of changing weather
patterns and energy efficiency on
customer demand for Grainger’s
properties
Long-term
(>2050)
– Due diligence of acquisitions and existing
assets includes climate risks and energy
efficiency
– Refurbishments programme to increase
energy efficiency
– Customer awareness campaigns to
influence behaviour
Physical Acute and
Chronic
Risk Increased risk of flooding affecting
Grainger’s properties
Short-term
(<2030)
– Due diligence of acquisitions and existing
assets includes flood risk
– Mitigation strategies including flood
management plans in operation at assets
with identified potential risk
Acute Risk Increased severity and frequency
of extreme weather events
affecting Grainger’s properties or
development sites
Medium-term
(<2050)
– Business Continuity Programme in place
– Due diligence of acquisitions and existing
assets includes physical climate risks
– Mitigation strategies in operation at
assets with identified potential risk
Chronic Risk Increased risk of heat stress
affecting Grainger’s properties
Long-term
(>2050)
– Due diligence of acquisitions and existing
assets includes physical climate risks
– Mitigation strategies in operation at assets
with identified potential risk
Task Force on Climate-Related Financial Disclosures continued
56
Grainger plc
Annual Report and Accounts 2025
Impact of climate‑related risks and opportunities on
Grainger’s business, strategy, and financial planning
Our purpose and business model is to invest in high-quality,
energy efficient rental homes which we plan to hold for the
long-term. Climate-related risks and opportunities have been
considered as part of our reviews of business strategies for the
development, acquisition, refurbishment and asset recycling of
buildings. Changes made in response to potential climate-related
risks and opportunities include:
• Enhanced asset due diligence for acquisitions.
• Integrating standards for energy efficiency and fossil-fuel free
heating into our bespoke specification for new developments.
• Incorporation of energy and carbon criteria into our
asset hierarchy.
• Increased investment in refurbishments to enhance the
energyefficiency of assets.
We therefore consider the current effects of climate-related
risks and opportunities on the Company’s business model to
be limited. Transition risks largely affect the non-core assets
which we plan to sell in line with our business strategy. In the
long-term, transition risks relating to development activity and
the associated embodied carbon it generates may impact on
our business model for new developments. Growth is expected
to continue through a combination of new development and
acquisition of stabilised assets.
Although we have not to date experienced climate-related
issues driving customer decision-making on where to
rent, weare seeing increased interest in this area from our
customers and expect that in the long-term our portfolio
will be responsive to changing customer demands due to the
focus of our asset management strategy on energy efficiency
and customer satisfaction. We believe our business model is
well placed to benefit in the future in the event that customer
decision-making does end up being based on the inclusion of
climate-related factors.
Physical risks are concentrated in our BTR portfolio where, due
to the scale of these buildings and our cluster strategy, a higher
proportion of customers could be affected by acute risks such
as a major flood event affecting multiple assets. Chronic risks
are concentrated in our London and South East portfolio where
scenario analysis has identified a greater proportion of assets
vulnerable to risks such as heat stress and drought in a higher
warming scenario. Transition risks are concentrated in the
PRS portfolio where assets will require capital expenditure to
meet higher standards of energy efficiency and to decarbonise
heatingin alignment with future regulations.
Climate-related opportunities are concentrated in the business’s
BTR portfolio and in repositioning long-term hold assets to meet
future customer demand for properties that are highly energy
efficient and resilient to increasing temperatures.
Our strategy to achieve our climate-related targets is to:
• Increase the energy efficiency of the portfolio;
• Decarbonise heating in homes;
• Procure renewable energy for all Grainger purchased energy;
and
• Measure and reduce embodied carbon through the design,
construction and operation of BTR buildings.
To deliver these targets, we have made the following strategy
and resource allocation decisions:
• Dedicated budgets to improve energy efficiency of
our portfolio and achieve EPC C rating or above on all
PRS properties.
• Investment in research and development to pilot
low-carbon heating systems in our buildings.
• Developed net zero asset plans for long-term hold
assetswithassociated refurbishment plans.
• Reviewed the specification for new BTR developments
ensuring it is aligned to our energy and GHG targets.
We have a Net Zero Transition Plan, which is summarised in the
Net Zero Carbon Pathway published on our website (corporate.
graingerplc.co.uk). This transition plan has been developed
and disclosed with consideration of the UK’s commitment to
be a net zero economy by 2050. We support this commitment
and our transition plan is aligned to the UK Government’s
target. Government policies have informed the actions and
timelines set out in our transition plan. The key assumptions
and dependencies that inform the plan are the timeline for
decarbonisation of the UK electricity grid, and the Government’s
policy for decarbonising heating in homes including equalising
running costs of heat pumps to gas boilers and the introduction
of mandatory emissions thresholds for heat networks.
We recognise that engaging with our key stakeholders is
critical to delivering our Net Zero Transition Plan. We have
implemented a comprehensive programme of engagement
withour customers, suppliers and our industry, which is reported
on inourNet Zero Carbon Pathway and a progress update is
provided in this Report at page 47.
The potential impacts on the Company’s financial position and
financial performance include:
• Changes in costs relating to insurance, energy procurement,
investment in adaptation measures and compliance
with regulation;
• Changes in revenues from rental income and sales for assets
that have undergone energy efficiency improvements;
• Changes in the value of assets following improvements
to energy efficiency and increased investment in
new developments;
• Potential for decreased asset values or early retirement of
assets due to physical climate-related risks or any potential
non-compliance with climate regulation; and
• Increased access to capital from responsible lenders
and investors.
Our financial planning processes reflect the climate-related
risks and opportunities we have identified, prioritising any
requirements necessary to maintain regulatory compliance,
deliver our Net Zero Transition Plan and maintain high levels
of customer satisfaction. Each one-year budget and our five-
year business plan both include estimates of the costs required
to improve the energy efficiency and carbon performance of
our assets. We do not currently use a bespoke internal carbon
price, however in London we refer to an external carbon price
in our decision-making, which is the £95 per tonne price set by
the Greater London Authority for carbon offset funds which
Graingerpays into on its developments in London.
57
Financial statementsGovernanceStrategic report
The effects of climate-related risks and opportunities on our
financial position, performance and cash flows in the reporting
period have been minimal. Capital expenditure related to
energy efficiency improvements to our properties continues.
The scale of this investment is within our normal levels of
capital expenditure and the climate-related improvements
usually form part of wider packages of asset improvements and
we do not consider it possible to quantify the impact of these
considerations on the financial position or financial performance
of the Company. Climate-related considerations form part of
discussions with the external valuers of our assets, however
we have not yet seen the energy efficiency performance of
our assets reflected in our valuations. We consider that there
is no significant risk of material adjustments within the next
financial year arising from this. In the short term we anticipate
a continuation of capital expenditures and investment as
we upgrade the energy efficiency of existing properties and
decarbonise heating systems in newdevelopment projects.
The impacts of climate-related risks and opportunities on
demand for assets and the future investment market have
also been considered. In the medium term, we expect to see
customer demand for energy efficient properties to increase
which may increase revenues from rental income. Data published
by Hamptons indicates that renters spend on average 8% of
the cost of their rent on energy bills. We estimate that our
customers may be willing to pay a rental uplift of 5% for a more
efficient property. When determining which energy efficiency
improvements to make to our buildings, we factor in the
potential effects on running costs for customers and associated
impacts on affordability, satisfaction and retention. For example,
we are planning to commence a replacement programme for
gas boilers once the costs of heat pumps achieve parity in line
with the Government’s Heat and Buildings Strategy.
We intend to replace commercial scale and individual boilers
when they reach the end of their useful life from 2030 onwards
and we expect to incur capital expenditure to fund this
investment programme between 2030 and 2040.
Resilience of Grainger’s strategy, taking into consideration
different climate‑related scenarios
We are supportive of the Government’s target to transition
to a net zero carbon economy consistent with the Paris
Agreement goal to limit warming to well below 2°C and pursue
efforts towards 1.5°C. We have considered the resilience of our
strategy to this transition through considering the climate-
related scenarios used by the Government to develop its
climate-related policies. We consider these scenarios relevant to
assess the resilience of Grainger’s business because they identify
implications for residential properties and inform the policies
that sit as assumptions behind our transition plan. The key
assumptions are that:
• Heat pumps will be the preferred strategy for heating
new homes;
• The rate of decarbonisation of the UK electricity grid; and
• The extent of customer behaviour change.
This analysis is reviewed on an annual basis and considers short-
and medium-term timelines up to 2050 in alignment with the
Government’s net zero target deadline.
This analysis demonstrated that our strategy to sell non-core
assets and invest in highly energy efficient new homes is resilient
in the face of increasing regulatory risk. We have enhanced
our asset management strategies, introduced policies to align
to future climate-related regulation such as minimum energy
efficiency standards and made a commitment to transition our
portfolio away from fossil fuel heating.
We have considered the potential impact of three climate
Representative Concentration Pathways (RCP) scenarios
published by the Intergovernmental Panel for Climate Change
on the vulnerability of our real estate portfolio and pipeline to
physical climate risks:
• RCP 2.6 which aims to keep global warming at +1.5°C (below
2°C) above pre-industrial temperatures. This scenario aligns
to the Paris Agreement and requires prompt and significant
reduction of GHG emissions.
• RCP 4.5 which is an intermediate scenario and assumes
globalwarming of 2.5 to 3°C over the longer term.
• RCP 8.5 which assumes minimal abatement of GHG and
associated global warming of 4°C over the longer term.
These scenarios were considered over four timelines: the current
position, short-term (2030), medium-term (2050) and long-
term (2100 and beyond) and considered all current BTR assets
and pipeline assets. The assessment was reviewed during 2025
and our assessments indicate that our portfolio would remain
operational under all scenarios, albeit with potentially higher
levels of flood and drought risk, in line with many urban areas.
The assessment identified some acute risk exposure to flood and
windstorm risks. Windstorm risk is typical for the UK and could
affect all assets with moderate (medium) intensity. Our strategy
to invest in urban locations results in some exposure to flood
risk in locations such as Bristol, Leeds and London and one asset
in Southampton is exposed to storm surge. Affected assets
have appropriate mitigations incorporated into their design
and operation.
Task Force on Climate-Related Financial Disclosures continued
Glasshouse Square, Bristol
58
Grainger plc
Annual Report and Accounts 2025
Under a high emissions scenario from 2050, drought stress
and heat stress increase and become a medium risk which
could impact water scarcity and customer wellbeing, however
in the short-term or under a low emissions scenario, these
risks are rated low or very low risk. We undertake overheating
assessments for all new developments and ensure passive
measures to minimise overheating risk are incorporated into
the building design. Subsidence conditions also increase beyond
2050 under both scenarios. We will continue to assess potential
risks in due diligence for future acquisitions and to make
appropriate adaptations where required.
A water quality assessment identified that given the urban
locations of Grainger’s assets, our portfolio has high exposure
to water pollution in surface water. Site specific adaptations to
minimise surface water flood risk are considered in the design
of our developments. Drinking water was not identified as
being a risk and remains well within World Health Organisation
safety thresholds.
A biodiversity assessment identified that approximately 22%
of our portfolio is exposed to areas of moderate to very high
biodiversity intactness. Site specific measures to protect and
enhance biodiversity are implemented across our portfolio
and we have strategies to enhance biodiversity at our
strategicland sites.
This analysis focuses on the vulnerability of the locations of
our portfolio and pipeline assets to climate change and does
not takeinto account specific asset mitigation measures and
municipal flood protection.
We consider that it is not possible to quantify an isolated impact
from these scenarios on our financial performance and position
at this time. To ensure the business remains resilient, we have
thefollowing capacity to adapt our strategy:
• Flexibility to deploy capital to asset improvements that
safeguard against transition and physical risks;
• Regular reviews of our asset hierarchy with the ability to
retainand refurbish additional assets;
• Option to pursue growth through new acquisitions; and
• Capacity to meet short-term costs if one or more assets
areaffected by an acute climate event.
Risk management
Processes for identifying, assessing and managing
climate‑related risks and opportunities
Climate-related risks are included as a principal risk and
uncertainty to the business’s strategy and included in our
corporate risk management framework (see page 69).
Risks areconsidered in relation to all business operations and
theCompany’s full operational real estate portfolio and pipeline.
Corporate and portfolio level risks and opportunities are
identified through periodic sustainability materiality reviews,
regular monitoring of current and emerging regulation and
ongoing stakeholder engagement. We work closely with
industrybodies, partners and relevant advisers to identify,
understand and respond to risks and opportunities affecting
Grainger and our sector.
Asset level risks and opportunities for existing assets are
identified and reviewed through our annual asset hierarchy
assessment, quarterly asset reviews and scenario analysis
undertaken annually for transition risks and every three years
forphysical risks. These assessments are informed by data
on our properties which is obtained from a range of sources
including site inspections, audits and insurance cover reviews.
Risks relating to new acquisitions or developments are identified
through due diligence undertaken pre-acquisition and pre-
investment and reviewed through the Investment Committee’s
evaluation process. Where a risk is identified in relation to
a development proposal, appropriate mitigations will be
incorporated into the building design and where a risk is identified
in relation to a stabilised asset, we will include mitigations in our
integration plans.
Risks are prioritised through an assessment of the nature,
likelihood and magnitude of the effects using a quantitative
scoring matrix including thresholds to assess financial impact
and a qualitative review of the impact on our business strategy.
Risks are considered in line with the methodology used to assess
all principal risks and uncertainties and inform the Company’s
overall risk management process which is reported on page
61. There have been no changes to this process during the
reporting period.
Climate-related risks are monitored through regular risk
reviews undertaken by the Oversight Committees, including
the Finance Committee, the Development Board and
Operations Board. The outputs are fed into the principal risk and
uncertainties reviews undertaken by the Executive Committee,
the Audit & Risk Committee and the Board during the year.
Reviewing climate-related risks and controls is incorporated
intoour internal controls and Internal Audit programme.
Metrics and targets
Climate‑related metrics
The Company’s greenhouse gas emissions for Scopes 1, 2 and
3 are reported in the SECR statement on pages 48 to 52 of
this Report. Emissions have been calculated in alignment with
the GHG Protocol Corporate Standard and all Scope 1 and 2
emissions and material Scope 3 categories have been externally
verified to a limited assurance standard.
Seraphina Apartments,
Fortunes Dock cluster, Canning Town
59
Financial statementsGovernanceStrategic report
Metrics related to the real estate sector sustainability disclosure topics of energy and water management, management of tenant
sustainability impacts and climate change adaptation are provided in the Company’s annual EPRA Sustainability Reports, which are
available on our website (corporate.graingerplc.co.uk).
The following cross-industry metrics and sector-specific metrics are aligned to our Net Zero Transition Plan and provide an overview
of the Company’s exposure to climate-related risks and opportunities:
Metric category Metric FY24 FY25
GHG emissions
GHG emissions
(Scope 1 and 2)
1,796 tonnes CO
2
e 1,455 tonnes CO
2
e
GHG emissions (Scope 3) 69,640 tonnes CO
2
e 54,042 tonnes CO
2
e
GHG emissions per unit (based on emissions
reported on EPC certificates)
1.6 tonnes CO
2
per unit 1.5 tonnes CO
2
per unit
GHG emissions intensity for PRS
propertiesper m
2
21 kg CO
2
e per m
2
18 kg CO
2
e per m
2
Progress against absolute Scope 1 and 2
science-based target
6% reduction from FY23 baseline 24% reduction from FY23 baseline
Progress against intensity Scope 3
science-based target
28% reduction per m
2
from
FY23baseline
46% reduction per m
2
from
FY23baseline
Transition risks
% of PRS assets rated EPC A-C 94% rated A-C 96% rated A-C
% of BTR assets with low-carbon heating
(properties with non-gas heating)
69% of BTR properties 68% of BTR properties
Energy consumption in MWh
% renewable electricity
16,636 MWh
95% renewable
17,4 4 8 MW h
97% renewable
Physical risks
Value of PRS assets vulnerable to flood risk
(in locations with medium or high flood risk)
£796 million £926 million
Climate-related
opportunities
Value and % of PRS assets rated EPC B and
above and associated revenues
£1.6 billion; 65.7% by value;
57.7% of revenue
£1.9 billion; 70% by value;
64.2% of revenue
Capital deployment
Capital expenditure deployed towards
energyefficiency
£10.8 million £11.3 million
Internal carbon
prices
Carbon price used in Grainger’s decision-
making
Grainger does not currently have a
bespoke internal carbon price, but
refers to an external carbon price of
£95 per tonne in our decision-making
Grainger does not currently have a
bespoke internal carbon price, but
refers to an external carbon price of
£95 per tonne in our decision-making
Remuneration
Proportion of Executive remuneration linked
to climate considerations
10% of the 2024 LTIP 10% of the 2025 LTIP and 1% of the
2025 annual bonus opportunity
Climate-related targets
During the reporting year, our science-based target was validated by SBTi. The target is a near term target which is as follows:
Grainger plc commits to reduce absolute Scope 1 and 2 GHG emissions 42% by FY30 from a FY23 base year
1
. Grainger plc also
commits to reduce Scope 3 GHG emissions from capital goods and downstream leased assets 51.6% per m
2
residential gross
internal area within the same timeframe.
We have made strong progress towards our target in the first two years since our baseline year (FY23), achieving reductions of
24% in absolute Scope 1 and 2 emissions and 46% for Scope 3 emissions from capital goods and downstream leased assets per m
2
residential gross internal area. Detailed disclosure on target progress is provided on page 52.
Our Net Zero Carbon Pathway includes our key objectives and actions towards achieving our targets. For operational carbon
reductions impacting our Scope 1 and 2 emissions and Scope 3 emissions from downstream leased assets, these include our
refurbishment programmes, ensuring 100% ofPRS properties achieve EPC Rating C or above and purchasing 100% renewable
energy for all eligible supplies. To reduce embodied carbon from development and refurbishment projects impacting our capital
goods emissions, we work closely with our development partners and contractors to target reductions through lean design and
through lower-carbon construction methods and materials choices.
Our emissions reduction targets support climate mitigation and are aligned to our Net Zero Transition Plan. Progress towards our
targets is reviewed by Management through quarterly assessments of key performance indicators and annual progress reviews and
by the Responsible Business Committee at its meetings twice a year.
Task Force on Climate-Related Financial Disclosures continued
1. The target boundary includes land-related emissions and removals from bioenergy.
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Risk management and internal controls
Effective risk management contributing
todelivering sustainable growth
Our risk management framework is designed to identify the principal risks and uncertainties to our
businessandensure that:
• they are being appropriately monitored;
• there are appropriate and suitable controls in place; and
• required actions have clear ownership and accountability.
Risk management approach
Risk management is central to us meeting
our operational and strategic objectives,
it supports effective decision-making and
ensures we balance risk with returns.
The Board has ultimate responsibility
for oversight of our risk management
framework and internal control systems,
and for determining the Group’s risk
appetite. The Board has delegated
matters relating to risk to the Audit &
Risk Committee. See page 95 for the
Audit & Risk Committee Report which
includes information on the activities of
the Committee.
We continue to evolve our mature risk
management framework through which
we identify and assess potential risks
and establish appropriate controls and
mitigations to reduce risk to tolerable
levels. The process also identifies
principalrisks and uncertainties that
couldsignificantly impact the business
(see pages 64 to 69 for further
information). We also establish formal risk
appetite statements for those principal
risks and uncertainties. Our objective is not
to eliminate all risk but to ensure that each
risk remains at a tolerable level.
Risk assessment approach
We assess and identify risk using a
‘bottom-up’ and a ‘top-down’ approach.
Once identified, we determine the
potential probability and impact of
each risk and give it a gross (before
mitigation) and net (after mitigation) score.
This allowsus to assess whether risks are
within appetite and tolerable and which
require further treatment.
During the year we have taken the
opportunity to review our impact and
probability scales within the risk-scoring
matrix to ensure they reflect our current
operating and external environment.
We use this risk-scoring matrix to ensure
we take a consistent approach when
assessingtheir overall impact and that
matrix includes a range of potential
impacts including financial, operational
and reputational impacts.
The period for assessment varies
according to the risk. For example, the
assessment of risks in operational areas
are based on the likelihood of how often
they occur in a rolling 12-month period
while climate-related risks are assessed
over a longer timeframe. We record
the impact and likelihood scores and
mitigations in Divisional risk registers.
Page 86 sets out our governance
framework, including a summary
of the Group’s Board and Executive
Committee structure.
Mapping our key risks and movement
(post-mitigation scoring)
Principal risks and uncertainties
1
Geopolitical and Macroeconomic
2
Financial
3
Political and regulatory
4
Colleagues
5
Supplier
6
Health and Building safety
7
Development
8
Cyber and information security
9
Customer Experience
10
Sustainability
Indicates risk movement from last year
Likelihood
Impact
7
6
10
9
1
4
8
52
3
This section of the Strategic Report details our risk management and internal control arrangements, as well as
reportingon our principal risks and uncertainties. Further information relating to these matters are also included
inour Audit & Risk Committee Report, which can be found at page 95.
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Risk and internal controls framework
We operate a three lines of defence model which is described in the diagram below.
Risk management and internal controls continued
Board and Audit & Risk Committee
Executive Committee
Management and financial controls
Policies, procedures and RACMs
Understanding of risk management
Risk management and compliance
Executive Committee deep dives
Oversight by Divisional
Committees of Divisional risks
Effective management of risk
Each year the Executive Committee agree
a plan of risk management activities
which are aligned to the business strategy,
ensuring our risk focus is applied to key
business priorities throughout the year.
Risk registers are regularly reviewed
and updated as required. The relevant
Oversight Committees review these
registers at least quarterly while the
Executive Committee reviews the
Group principal risks and uncertainties
at least twice a year. The output from
these assessments and reviews are
considered by the Audit & Risk Committee
and presented to the Board at least
twice a year. Through this process we
have identified our principal risks and
uncertainties which are set out in pages
64 to 69 of this report with explanations
of the links to our strategy together with
descriptions of the key mitigations which
are in place.
Whilst we have not identified any new
risks this year which are material enough
to be considered as a new principal risk
and uncertainty, we have assessed five
risks as having increased in their likelihood
assessment. The remaining five have
remained stable. The diagram on page
61 maps our assessment of the principal
risksand uncertainties, post-mitigation.
During the year we disaggregated our
principal risks and uncertainties to support
the identification of material controls in
readiness for Provision 29 of the 2024
Code, which will apply to Grainger from
1 October 2026.
This work supports the identification
of material controls and the effective
design of our attestation and testing
programme, enhancing assurance over
riskmanagement and internal controls.
Evolving and Emerging risks
The Board has continued to monitor
emerging risks in addition to its regular
monitoring of the current risk landscape.
Emerging risks are those which are
still evolving or for which the potential
impact on the business remains unclear.
Two examples of emerging risks being
monitored include:
• Geopolitical risk – geopolitical events
could have unforeseen impacts on
the business through supply chains,
commodity prices, inflation and interest
rates or regulation.
• Longer term climate change – the
specific impact of increasing climate
change on temperatures or rainfall
levels and the consequent impact to
our buildings and customers remains
uncertain and may evolve.
Risk control framework
and appetite
The Executive Committee and the
Oversight Committees examine the
identified risks, reported controls, key
mitigations and the principal risks and
uncertainties reporting.
The Audit & Risk Committee supports the
Board by monitoring and reviewing the
controls environment and risk process.
These processes ensure we regularly
review our principal risks and uncertainties.
We monitor the internal control
framework for these principal risks and
uncertainties through the Internal Audit
monitoring plan which is aligned to our
assurance map.
Further information on our internal
controls is included in the Audit & Risk
Committee Report on page 95.
Assurance on our risk controls is provided
to the Board by a combination of internal
management information, internal and
external auditors work, and the Audit &
Risk Committee’s oversight. We also hold
an assurance map for our principal and
operational risks which is considered in
ouraudit planning.
External Audit
1
st
line of defence
2
nd
line of defence
3
rd
line of defence
Internal Audit reviews
Risk-based reviews and audits by
third-party advisers
Key performance indicators
reported and monitored by
Oversight Committees
Specialist third-party reviews
Audits and monitoring
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Annual Report and Accounts 2025
Our risk management and internal control
arrangements include data protection and
health and building safety arrangements
which are supported by our Oversight
Committees (see page 86 for details of our
Committees). Set out below are details
of our data protection and health and
building safety arrangements.
Data protection
The data protection activities of the
business form part of our business-as-
usual processes which are overseen by
the Data Protection Committee, which
includes senior representation from
across the business and is chaired by our
Group Legal Counsel who is also our Data
Protection Lead.
The Executive Committee, Board, and
Audit & Risk Committee receive regular
updates on all matters and activities
related to the ongoing development
and support of our data protection
compliance framework. This ensures
that our leadership maintains clear
oversight and that our compliance
regime continues to evolve in line with
developments in best practices and in
accordance with the evolving regulatory
and statutory requirements.
This year we have considered data
breaches arising from cybersecurity
incidents experienced by Marks & Spencer,
Co-op, Jaguar Land Rover and others.
We have also adapted our processes in line
with the Data (Use and Access) Act 2025.
Health and Building Safety
The safety and wellbeing of our
colleagues, customers and communities
remains our highest priority.
Governance and oversight
The Group operates a comprehensive H&S
management system led by the Director
of H&S, utilising risk management systems
for identifying, mitigating and reporting
real-time H&S information.
Our governance structure includes:
• A H&S Committee with colleagues from
across the organisation, responsible
for overseeing management and
monitoring compliance with laws
and regulations;
• A new H&S Forum being established to
enhance colleague engagement;
• Oversight by the Operations Board
• Regular reporting to the Board at each
meeting; and
• Annual presentations to the Board by
the Director of H&S on strategy and
business planning.
For building safety specifically, we have
dedicated arrangements headed by a
Director of Building Safety and Block
Management. The Building and Fire Safety
Team monitors and promotes building
safety through established policies,
procedures, regular risk assessments,
structural surveys, and inspections.
Live.Safe programme
Our Live.Safe programme embeds a
proactive safety culture throughout
Grainger, empowering colleagues to speak
up about safety concerns. This cultural
change programme aligns with our
corporate strategy and is built upon three
key pillars:
• Originate.Safe: ensuring the highest
standards in design and construction;
• Invest.Safe: conducting thorough due
diligence when acquiring properties; and
• Operate.Safe: putting customers at the
heart of our management plans.
We implement Live.Safe through:
• Annual Live.Safe Weeks;
• Comprehensive training;
• Online resources;
• Safety Climate Surveys;
• Executive leadership; and
• Continuous improvement following the
Plan, Do, Check, Act method.
Safety performance
Our annual Safety Climate Survey
demonstrates continued year-on-year
improvement, with results surpassing
both the All Industries and the Real
Estate and Facilities Management
benchmarks across all eight measured
factors. This independent assessment
evaluates key factors such as leadership,
communication, colleague involvement,
and attitudes.
This achievement reflects our
commitment to creating safe
environments for both colleagues and
customers, ensuring safety remains
central to everything we do.
Customer and building safety
Our frontline teams highlight our safety
approach through Health, Safety and
Security weeks across our BTR properties,
offering practical safety tips with support
from local emergency services.
Grainger maintains a constructive
relationship with the Building Safety
Regulator, resulting in the progressive
issuance of Building Safety Certificates
across our in-scope buildings. We engage
with building occupants to provide
information, gather feedback, and
promote awareness of safety measures
and emergency procedures, including
comprehensive emergency plans and
regular drills.
Together, these arrangements ensure
we maintain our ‘best-in-class’ focus on
health and building safety, safeguarding
our colleagues, customers, and all visitors
to our sites while continuously improving
through learning from audits, inspections,
and incidents.
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Financial statementsGovernanceStrategic report
Cultural link to values: Every home matters People at the heart Leading the way Exceeding expectations
Principal risks and uncertainties
Managing our principal risks and uncertainties
The Directors regularly review the Group’s principal risks
and uncertainties taking into account Management’s
reporting on risk, internal controls and emerging risks.
Principal risks, uncertainties and opportunities
Principal risks and uncertainties are considered by the Board
as part of the strategy setting and in the consideration of
newopportunities and potential investments.
The Audit & Risk Committee review deep dive reports on each
of the principal risks and uncertainties on a rolling programme
to allow in depth discussion and consideration of individual risks.
Further information on our risk deep dives is included in the
Audit& RiskCommittee Report on page 95.
The Audit & Risk Committee also reviews and maintains
formal risk appetite statements for each principal risk and
uncertainty. The Directors generally adopt a low tolerance
for risk, particularly in respect of regulatory or reputational
matters. In relation to development risk, a medium risk appetite
is tolerated in order to continue to capitalise on the substantial
opportunity within the residential real estate sector.
UK outlook
The UK faces a severe undersupply of housing; supply will
continue to be constrained with current planning permissions
and housing starts insufficient to meet growing demand.
Rental demand is set to grow as the UK population continues
to increase. Structural changes continue to drive demand
as more people rent for longer. We have clear and strong
customer demographics, using carefully selected investment
locations. All of these factors are presenting exciting acquisition
opportunities as we pursue multiple routes for future growth
andsecure investment opportunities.
The economy continues to grow, albeit with concerns around
business confidence and employment levels. The Bank of
England expects inflation to trend towards the 2% target
by 2027, which could set a more favourable interest rate
environment in the coming years which will offer a greater
degree of pricing certainty. The levelling off of construction
cost inflation should prove supportive to the overall viability of
development in the next 12 to 18 months.
2025 has been another busy year for the PRS, smaller landlords
have reassessed their investments leading to many exiting the
market. During the remainder of 2025, we will continue in our
preparations for the Renter’s Rights Act, we believe investing
in more sustainable housing stock supports these changes.
While some small private landlords are choosing to exit, a more
professional, resilient market is emerging. 2026 will be more of
the same as we focus on strong demand, a maturing investor
base and a shift toward quality and scale which are reshaping the
sector for the better.
As the market leader in the BTR sector, we are well positioned
for the future. Our research delivers granular understanding of
customer affordability and ensures that our high-quality, energy
efficient homes achieve the desired mid-market position within
our sector.
Going forward, we continue to scrutinise those risks most likely
to impact our business model and disrupt operations.
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Annual Report and Accounts 2025
Impact on our business model: Invest Operate Originate Impact on our strategy: Grow rents Simplify andfocus Build on our experience
Geopolitical and
Macroeconomic
Financial
Increasing
Bank of England’s cautious approach to interest
rate reduction
Risk description
Macroeconomic factors such as changes to interest rates, market
factors such as changes to credit spread or availability of finance,
or a significant worsening of our business performance which
collectively or individually impact on our ability to secure funding to
support growth. For example, our ability to obtain sufficient finance
at acceptable prices and/or increase the cost of any existing floating
rate debt and/or ability to raise equity capital is altered.
Impact on strategy
Growth plans may be constrained by limited access to affordable
finance or increased debt servicing costs.
Key mitigations
• In-house Treasury Team actively manages our capital
arrangements including funding and debt levels as well as
covenant compliance.
• Our current funding arrangements ensures we have no material
refinancing requirements until 2029.
• We monitor financial markets and interest rate trends to ensure
we maintain arrangements that provide protection against rising
interest rates.
• Our Management Team are focused on growing net rental income
which is supported by our efforts to maintain a strong lease up of
our new BTR sites.
• We also have a liquid asset base which provides flexibility to our
capital arrangements.
Increasing
Low growth and inflationary pressures
Risk description
Geopolitical and national events influence macroeconomic trends
(such as changes to inflation and interest rates) that impact investor
confidence or consumer sentiment, choice and wealth, impacting
performance and valuation of our portfolio.
Impact on strategy
The geopolitical and macroeconomic environment presents
interconnected risks including inflation pressures affecting
unemployment and consumer affordability, increased development
and operational costs, potential impact on asset capital valuations
with constrained growth, interest rate sensitivity affecting debt
servicing costs, reduced consumer sentiment, market liquidity
constraints, regulatory environment changes including taxation,
andsupply chain disruption from tariffs and trade impacts.
These risks impact on strategic decisions around investment,
development, and asset management.
Key mitigations
• We monitor inflation, interest rates, and GDP trends and
assess impact on development costs, asset values and
consumer affordability.
• Prepare for taxation and tariff changes.
• Strong rental demand as UK continues to face an ongoing
housing shortage and customer affordability issues make renting
more attractive.
• Our customer affordability is underpinned by strong customer
demographics and energy efficient properties and our mid-market
positioning supports our long-term sustainable growth.
• Our development arrangements ensure we maintain optionality
and flexibility on the delivery of our pipeline and we monitor our
capital ensuring we deploy investment into development matters
carefully, and in accordance with our capital allocation policy.
• Our joint venture partnerships enable us to combine resources,
expertise, networks and risk-sharing.
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Financial statementsGovernanceStrategic report
Principal risks and uncertainties continued
Political and
regulatory
Colleagues
Cultural link to values: Every home matters People at the heart Leading the way Exceeding expectations
Increasing
Renters’ Rights Act, Taxation, Sustainability
Risk description
Developments in domestic political or policy landscape that impacts
BTR, land development and housing sectors. Changes to policies and
regulations can increase our operational and compliance costs and
reduce growth. Failure to comply with regulations can also lead to
fines, damage to our reputation and lossof business.
Impact on strategy
Operational efficiency and growth plans may be hindered by
evolvingregulations and political reforms.
Key mitigations
• We have in-house expertise within our Group Functions (e.g.
Corporate Affairs, Finance, HR, Compliance and Governance
teams) and we engage external professional services as required.
• We monitor policy and legislative changes and prepare for
implementation of reforms engaging with business functions
across the Group.
• We actively engage with the Government on matters affecting
our sector.
• We have established policies and procedures, and we deliver
training to colleagues to ensure we operate in compliance with
relevant laws and regulations. We will update our arrangements
toensure compliance with new regulatory requirements.
Stable
Risk description
Failure to attract, develop, and retain a talented diverse workforce
and provide an inclusive environment, leading to loss of key
capabilities, individuals and experience from within the business.
Impact on strategy
Business performance and strategy delivery may be compromised
due to talent gaps arising from a failure to recruit and retain.
This could also reduce organisational resilience.
Key mitigations
• Our dedicated in-house HR Team has an established People
Strategy which includes recruitment and retention strategies.
Our People strategy is aligned to our business plan, and approved
by the Board annually.
• We have defined values which direct our behaviours, and we
actively monitor our culture.
• We are committed to raising awareness and encouraging a culture
of equality, diversity and inclusion through ED&I initiatives which
are delivered through our ED&I Steering Group and Network.
• Our colleague engagement measures include regular surveys
and the appointment of our designated Non-Executive Director
responsible for workforce engagement. We listen to the results of
these engagements and actively seek to respond to feedback.
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Impact on our business model: Invest Operate Originate Impact on our strategy: Grow rents Simplify andfocus Build on our experience
Supplier Health & Building Safety
Stable
Risk description
A significant health and/or building safety incident, such as a fire or
gas safety breach causing harm to customers, suppliers, colleagues
and members of the public.
Impact on strategy
Non-compliance with safety standards may lead to legal, financial
and reputational consequences as well as harm to customers,
colleagues, contractors, or visitors to our sites.
Key mitigations
• Our in-house H&S and Building Safety Teams include individuals
with specialists skills and experience. They establish and
implement our strategies and operational plans to ensure
compliance with safety regulations and best practices.
• Our arrangements ensure we operate in accordance with our three
lines of defence model. Our H&S Team is responsible for policies,
audit and compliance, which includes conducting regular audits
and training. Our Building Safety Team are responsible for ensuring
the safety of our homes and offices.
• We regularly engage with our colleagues and our customers on
health and building safety matters through initiatives like Live.Safe
and our Health, Safety and Security weeks.
• We carry out routine property inspections and we have a
programme of planned preventative maintenance which includes
compliance assessments to ensure the safety of our residents.
Increasing
Geopolitical tensions, rising costs
Risk description
Failure to select, procure, retain and manage key suppliers and
the impact on us of supplier acts and omissions, resulting in
increased costs to the business, loss of supply, fines, damages
andreputational damage.
Impact on strategy
Operational reliability and customer satisfaction may be affected,
with potential regulatory consequences.
Negative impact on growth and increased workloads for colleagues
in supplier and facilities management.
Key mitigations
• Our dedicated in-house Procurement Team has established
procurement arrangements which include policies, a supplier code,
supplier selection arrangements, together with oversight and
contingency arrangements.
• Our published supplier code of conduct sets out our expectations
and describes how we partner with our suppliers.
• We have clear supplier selection criteria which is set out in our
Procurement Policy and ensures we select and appoint suppliers
who have the relevant competencies and skills to carry out the
work or services that we require.
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Principal risks and uncertainties continued
Development Cyber and
information security
Cultural link to values: Every home matters People at the heart Leading the way Exceeding expectations
Stable
Risk description
We allocate a portion of our capital to development activities
which may be complex and potentially bring multiple related risks.
Increased costs including build cost inflation, labour and material
shortages. Reduction in value through economic climate.
Impact on strategy
Delays or failures in development execution may hinder growth
andinvestor confidence.
Key mitigations
• We have a dedicated Development Team which delivers our
strategy to secure suitable land and manage our construction
risks. Before committing to a scheme, we carry out thorough due
diligence and in-depth research to ensure we understand the
context, the contractor and its supply chain.
• We have well established governance structures which provide
oversight of all of our development schemes, applying the skills of
our in-house development management experts, together with
qualified external consultants and professionals.
• To manage insolvency risks relating to our contractors or
subcontractors, we conduct due diligence prior to their
appointment and thereafter conduct monitoring activities.
Where appropriate we will put in place additional measures, such
as parent company guarantees, performance bonds, insurance
and/or warranties.
Increasing
Occurance of cyber-attacks increasing as
reported by NCSC
Risk description
Confidential data loss or technology disruption due to internal or
external factors impacting our information systems and data or by
internal security control failures.
Impact on strategy
Operational disruption, regulatory breaches, and reputational harm
may affect business continuity and stakeholder confidence.
Key mitigations
• We have dedicated in-house IT and data protection
resources which support our focus on maintaining data
and information security arrangements, including a strong
cybersecurity infrastructure.
• All colleagues receive regular training to raise awareness of cyber
security and data protection.
• Our Security Information and Event Management system provides
a view of our security posture by collecting security-related
information on threat detection, investigation and response.
• We have business continuity, crisis management and IT recovery
plans in place.
• To increase our Cyber resilience and capability, Grainger has
undergone a rigorous procurement exercise to identify and
select a 24/7 Security Operations Centre service. The selection
has concluded with the selection of NCC, as our trusted security
partner. Implementation is underway with the full capability
deployed by 1 December 2025.
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Impact on our business model: Invest Operate Originate Impact on our strategy: Grow rents Simplify andfocus Build on our experience
Customer Experience Sustainability
Stable
Risk description
Failure to effectively manage material sustainability risks and to
identify emerging risks. This includes assessment of risks associated
with climate change, communities and biodiversity. Failure to
meet customer and investor expectations and operating as a good
corporate citizen. Failure to comply with climate-related legislation.
The costs and impacts of transition to a zero-carbon economy.
Impact on strategy
Asset values, investor confidence, and regulatory compliance
maybe compromised.
Business disruption caused by climate-related events.
Failure to progress ED&I will impact on our Colleague Risk.
Customer satisfaction and retention could be impacted.
Key mitigations
• Our dedicated in-house Sustainability Team oversees and
monitors all of our sustainability initiatives.
• We continue to undertake our asset level sustainability due
diligence programme and invest in energy efficiency and climate
resilience measures.
• We align our operations with sustainability legislation and
reporting standards and engage with Regulators and policy
makers on relevant issues.
• We meet stakeholder expectations for sustainability performance
and participate in external benchmarking to provide investors with
assurance on our performance.
For more information about our climate-related risks in the
TCFDreport see page 56
Stable
Risk description
Our ability to successfully attract and retain our customers whilst
achieving rental growth in accordance with expectations.
Impact on strategy
Poor experience can give rise to increased complaints and costs and
negatively impact brand and result in a failure to attract and retain
customers, which in turn can impact asset values.
Key mitigations
• Our dedicated in-house Customer Experience Team is supported
by investment in systems that monitor, engage and respond to
customers, and to enhance our service quality standards.
• We invest to create high-quality homes with services to suit our
customer needs and demands.
• We focus on brand and customer engagement and monitor
customer sentiment. Our arrangements include customer service
training which is delivered to all colleagues.
• We leverage our data, technology and AI capabilities to drive
improvements in customer experience.
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Viability Statement
In accordance with the 2018 UK Corporate Governance Code,
the Board has assessed the prospects of the Group over
a longer period than the 12 months required by the Going
Concern provision. In doing so, the Board conducted the review
considering the Group’s financial position, business strategy, the
current economic environment and the potential impact of our
principal risks and future prospects.
The strategic plan is reviewed and approved by the Board each
year, with year one forming the budget for the next financial
year. This plan is regularly reviewed to ensure it remains reflective
of current operating and macroeconomic environments, and
provides a basis for setting all detailed financial budgets and
strategic actions that are subsequently used by the Board to
measure and monitor performance and the Remuneration
Committee to set targets for the annual incentive plans.
The Board has reviewed its strategic and financial plans in
detail and believes that a viability assessment period to the
end of FY29 is appropriate, given this covers the period of the
detailed strategy review and incorporates both the timescales
for the significant majority of investments and returns currently
considered as being secured and committed. Additionally,
it covers a significant amount of refinancing due at the end
of FY29.
The Group’s business model has proven to be strong and resilient
throughout economic cycles even with higher levels of gearing,
consistently demonstrating its ability to sell assets and let vacant
properties to provide stable income returns and cash generation,
even during challenging market conditions. Currently the Group
directly owns £3.5bn of residential property assets, many of
which are of a relatively granular nature which are attractive to
investors and therefore relatively liquid, as proven throughout
previous property cycles.
The Group would remain viable even in the event of severe and
sustained house price deflation as it would be able to accelerate
the natural conversion of our assets to cash including the sale
of tenanted assets and reduce or suspend development and
acquisition activity. Only an unprecedented and continued
long-term decline in residential property valuations, significant
reduction in rental income and lack of liquidity in UK residential
property markets is a scenario that could conceivably cause a
material threat to the Group. In this situation, the Group has the
option to continue to let assets to generate income and protect
overall asset value.
The financing risks of the Group are also considered to have
an impact on the Group’s financial viability. The two principal
financing risks for the Group are the Group’s ability to replace
expiring debt facilities and adverse movements in interest
rates. The Group has been successful in securing longer-term
funding to deliver the secured BTR pipeline and has prepared
the strategic plan on this basis. The Group currently has
total facilities of £2.1bn with an average maturity of 3.9 years
includingextension options. At the end of FY25, £1,603m was
drawn, demonstrating the significant headroom available.
Towards the end of the viability period, £1,445m is set to mature,
of which £945m is in the final year of the review. In addition,
the Group continues to manage its interest rate risk exposure
through fixed rate borrowing and with interest rate swaps
matching almost all planned drawdowns. The Group has put in
place hedging facilities covering expected drawings to ensure it
remains sufficiently hedged until beyond the period of the review.
The viability assessment was made with the Group’s strategy
forming the base case and then recognising the principal risks
that could have an impact on the future performance of the
Company. The base case reflects the Group’s assessment of the
current operating environment and these risks consider further
changes to the macroeconomic environment. The planning
process incorporates severe scenario planning, with the
amalgamation of multiple risks which may result from political
and economic uncertainty, including sensitivities to rental level,
asset valuations, financing and costs to assess the impact on the
longer-term viability of the Company.
The sensitivity analysis involved a severe but plausible downside
scenario which incorporated the following assumptions:
• Reducing rental levels with lower BTR occupancy (-10%), lower
growth (-100bps) and 3-month delays to practical completion
and leasing up of our pipeline impacting both income and
property valuations;
• Reduced HPI growth of -800bps, lowering both property
valuations and sales revenue;
• Further reductions to property valuations of 10%;
• Cost inflation on construction and operating costs of 10%; and
• Interest rates increase by 2% for the duration of the review
period and our credit rating is downgraded causing the coupon
rates of our two corporate bonds to each step up by 1.25%.
The amalgamation of these severe scenarios leads to an overall
reduction in asset value of c.17% over the review period. Even at
these levels and before any mitigating actions, LTV remains
compliant with banking covenants through the period of
this review.
The Group has also modelled a reverse stress test scenario in
which the Group would be able to withstand a 52% decline
in property valuations from the end of FY25 levels before
breaching the Group’s core LTV covenant in the period under
review. Such a scenario is considered to be remote and is before
reflecting any mitigating actions available to the Group.
Throughout this downside scenario, the Group had sufficient
resources to remain in operation and compliant with its
significant banking covenants. This scenario testing, together
with the Group’s strong financial position, current rent collection
and lettings evidence, and mitigating actions available including
selling assets and deferring non-committed capital expenditure,
support the assessment that the Group will have the ability to
continue to meet its liabilities as they fall due.
Based on the Board’s assessment, the Directors have a
reasonable expectation that the Group will be able to continue
in operation and meet its liabilities as they fall due over the
four-year period to end of FY29.
The Strategic Report is approved by and signed on behalf of the
Board of Directors.
Rob Hudson
Chief Financial Officer
19 November 2025
70
Grainger plc
Annual Report and Accounts 2025
Strong
Governance
focused on
long‑term success
Chair’s introduction to governance 72
Leadership and purpose including Board profiles 74
Stakeholder engagement 80
Division of responsibility 86
Nominations Committee Report 88
Responsible Business Committee Report 92
Audit & Risk Committee Report 95
Directors’ Remuneration Report 100
Annual Report on Remuneration 110
Statement of Directors’ Responsibilities 120
Directors’ Report 121
Alternative performance measures 123
The Kimmeridge, Oxford
71
Financial statementsGover nanceStrategic report
Chair’s introduction to governance
The Board is committed
to excellent leadership,
culture and governance
as these are central to
ensuring the Company’s
continued success.
Dear Shareholders,
Your Board has continued with our commitment to
operate effective corporate governance arrangements
and to promote the highest standards of behaviour,
culture and values throughout the Company.
I am pleased to introduce this year’s Governance report, in
which we describe our corporate governance arrangements,
the operation of the Board and its Committees, and how the
Directors have discharged their responsibilities. We also report
on our compliance with the 2018 Code and our planning for
the2024 Code which applies to us from 1 October 2025.
This is my last report as Chair, as I will be retiring from the Board
at the end of the 2026 AGM. On 1 October 2025, Simon Fraser
joined the Board and its Committees as Chair Designate and,
subject to being elected, he will take over role of Chair at the
conclusion of the 2026 AGM.
Ahead of appointing Simon, the Nominations Committee
undertook a detailed review of the Board’s composition,
including its skills, experience and expertise. The results were
taken into account in our search, which was led by Justin Read,
our Senior Independent Director. The process resulted in the
appointment of Simon and further details of the process are
setout in the Nominations Committee Report at page 88.
We welcome Simon to the Board. He will be supported by the
Directors including Justin, who subject to his re-election at the
2026 AGM, will remain on the Board notwithstanding that he
willcomplete nine years on the Board in February 2026.
The Board has determined that Justin should remain on the
Board for a further period of up to one year to support Simon’s
transition and that he remains independent. During 2026
we will continue to review the Board’s composition including
consideration of Justin’s term on the Board.
During the year the Company has delivered another strong
operating performance against a backdrop of a challenging
macroeconomic environment that included a period of political
and economic instability.
We report on our compliance
with the 2018 Code and our
planning for the 2024 Code
which applies to us from
1 October 2025.
72
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Annual Report and Accounts 2025
Highlights
1. Oversight and leadership of the response to the
changing geopolitical and macroeconomic environment.
2. Compliance with the Corporate Governance Code (2018)
during the year and preparation for the 2024 Code which
applies from 1 October 2025.
3. Adopting updated articles following
shareholder approval.
4. Successful completion of our conversion into a REIT.
5. Enhancement of our sustainability regime.
6. Board review and reaffirmation of strategy.
7. The Board visited Cardiff and met some of our team
atThe Copper Works.
8. Focus on the wellbeing of colleagues and customers.
The Strategic Report contains details of how we have performed
during the year and provides the context within which we have
operated our governance arrangements. Significant activities
have included successfully achieving our SBTi validation
and ensuring we monitored and prepared for rental reforms
whichare now contained in the Renters’ Rights Act 2025.
In the pages that follow, we report on our compliance with
the 2018 Code and our planning for the 2024 Code which
starts to apply to us from 1 October 2025 (save for provision
29 which applies from 1 October 2026). We have during the
year continued with our governance arrangements, including
reviewing our Committee’s terms of references, which have all
been updated.
Further details of the work that we have undertaken,
includingplanning for provision 29 can be found in the
Audit & Risk Committee Report at page 95.
The Board has continued to provide strong support to the
Management Team during the year. We have considered and
debated various challenging scenarios, taking into account
theinterests of all the Company’s stakeholders.
Our Stakeholder Engagement reporting which begins on page
79, sets out in detail the Company’s key stakeholders and how
we engage with them. Our section 172 Statement on page 80
details how the Directors discharge their s.172 duties and it
includes some examples of how the Directors have considered
stakeholders in our decision-making during the year.
A significant decision taken this year has been to convert the
Company into a Real Estate Investment Trust (REIT) which we
determined to be in the best interests of Shareholders and other
stakeholders and we successfully achieved this on 8 September
2025. Ahead of the conversion, we reviewed and updated
the Company’s articles which have been in place since 2010.
Shareholders approved the adoption of the updated articles
atour general meeting on 1 September 2025.
The Board has also continued its focus on the Company’s
sustainability activities and during the year we continued
to progress our Net Zero Transition Plan as we successfully
received validation of our science-based targets by the SBTi.
Having provided oversight and support to the Company’s
successful accreditation for the National Equality Standard (NES)
in 2024, the Board has also continued to monitor Grainger’s ED&I
activities during 2025.
The Board conducted an assessment of the Company’s strategy
in June of this year which was combined with a site visit to our
BTR site in Cardiff, The Copper Works. As part of our strategy
review we considered the options for funding growth, the
increasing number of stabilised assets now coming onto the
market and potential consolidation in the sector. We continue
to believe that our growth strategy is the correct one for
the Company.
During the year we completed our annual evaluation of the
Board and its Committees. Having completed this exercise
withthe support of an external facilitator in financial year 2024,
weundertook the exercise this year using our internal process,
which involved completion of a questionnaire followed by a
Board discussion.
The process confirmed that the Board and its Committees are
effective. We have identified actions to be completed during
2026 as well as confirming completion of the actions identified in
2025. Further details are set out at page 77. To read more about
the Board’s activities in FY25, see page 78.
The FRC’s updated UK Corporate Governance 2024 Code applies
to Grainger with effect from 1 October 2025 (save for provision
29 which applies from 1 October 2026). We have during the year
reviewed our governance arrangements, including reviewing our
Committee’s terms of references, which have all been updated
for 1 October 2025. Further details of the work that we have
undertaken, including planning for provision 29, can be found
inthis section of the Report.
Mark Clare
Chair
19 November 2025
During the year
the Company has
delivered another
strong operating
performance. ”
Mark Clare
Chair
73
Financial statementsGover nanceStrategic report
Board of Directors
5
4
3
1
2
7
6
1. Mark Clare
Non-Executive Chair
Appointment
Appointed Chair in February 2017 and due to
retire at the close of the 2026 AGM
Skills, competence and experience
Mark has wide-ranging experience in a
number of sectors and extensive knowledge
of the residential property market. He has
substantial plc-level experience and was
(until October 2025) chair of Ricardo plc, and
he is senior independent director of Wickes
Group plc and a non-executive director of
Premier Marinas Holdings Limited. Mark was
chief executive of Barratt Developments plc
from 2006 to 2015, and is a former trustee
of the Building Research Establishment
and the UK Green Building Council. Prior to
joining Barratt, he was an executive director
of Centrica plc and held a number of senior
roles within both Centrica plc and British Gas.
Mark has also been a non-executive director
of United Utilities Group plc, Ladbrokes Coral
Group plc and BAA plc, the airports operator.
Tenure
8 years and 7 months
2. Helen Gordon
Chief Executive
Appointment
Appointed to the Board in November 2015
Skills, competence and experience
Helen is a highly experienced, proven and
well regarded real estate investor. She has
significant experience working across a wide
range of real estate asset classes, including
residential property. This is combined with an
extensive knowledge of the City. Helen is the
senior independent non-executive director
of Derwent London plc, a non-executive
director of BusinessLDN, vice chair of EPRA
and a board member of the British Property
Federation. She is a chartered surveyor and
before joining Grainger was global head of
Real Estate Asset Management of Royal
Bank of Scotland plc. She previously held
senior property positions at Legal & General
Investment Management, Railtrack and John
Laing Developments.
Tenure
9 years and 10 months
N
R
B E
3. Robert Hudson
Chief Financial Officer
Appointment
Appointed to the Board in August 2021
Skills, competence and experience
Rob has over 30 years’ experience in finance.
Rob was previously the chief finance and
operations officer and interim chief executive
of St Modwen plc, where he worked from
2015 to 2021. Prior to that, Rob was
the group financial controller at British
Land plc from 2011 to 2015. Rob joined
PricewaterhouseCoopers on graduation, then
moved to Experian plc in 2000 where he held
a number of senior financial roles, including
global finance director of its Decision Analytics
business and UK finance director. Rob is a
qualified chartered accountant.
Tenure
4 years and 2 months
Leadership and purpose
E
74
Grainger plc
Annual Report and Accounts 2025
Simon Fraser
Non-Executive Chair Designate
Appointment
Appointed Non-Executive Director 1 October
2025 and due to be appointed Chair at the
close of the 2026 AGM
Skills, competence and experience
Simon has substantial real estate and
investment experience and more than 13
years of FTSE Board experience with two
prominent REITs, SEGRO plc and Derwent
London plc. He is currently Chair of the
Remuneration Committee at SEGRO plc, and
Senior Independent Director at St James’s
Place plc. Between 2015 to 2021, Simon was
Senior Independent Director at Derwent
London Plc. He was also on the Board of Legal
& General Investment Management from 2015
to 2024 and Lancashire Holdings Ltd from 2013
to 2023.
Simon also brings a wealth of experience
in the global capital markets from a long,
successful career in investment banking and
corporate broking, advising a wide range of
clients across numerous sectors, including
many consumer facing businesses. Prior to his
retirement from executive roles in 2011, Simon
worked at Bank of America Merrill Lynch where
he was managing director and co-head of
corporate broking.
Tenure
2 months
5. Janette Bell
Non-Executive Director
Appointment
Appointed to the Board in February 2019
Skills, competence and experience
Janette is the managing director of FirstBus,
part of FirstGroup plc. She is a director of
the Confederation of Passenger Transport.
Janette held the position of chief executive
officer at P&O Ferries from January 2018 to
September 2020. Janette is an experienced
board director, with a breadth of operational
experience in customer centric organisations
including leading transformational change
in response to evolving Government policy.
She was sales & marketing director for
Hammerson plc and has also worked in senior
customer strategy and marketing positions at
PwC, Tesco and Centrica, where she was sales
and marketing director of British Gas Services.
Tenure
6 years and 9 months
6. Carol Hui OBE
Non-Executive Director
Appointment
Appointed to the Board in October 2021
Skills, competence and experience
Carol has substantial non-executive
experience in a wide range of sectors and
has particular expertise in law, sustainability
and infrastructure. Carol is a non-executive
director of Breedon Group plc, where she is
the chair of the sustainability committee.
Carol is also a non-executive director of
the Lord Chamberlain’s Committee in the
Royal Household and a board trustee of
Christian Aid. Carol was the non-executive
chair of Robert Walters plc until 2020. In an
executive capacity, Carol’s most recent role
was as chief of staff and general counsel at
Heathrow Airport, stepping down in August
2021. Carol has served in senior positions
in oil and gas, logistics and infrastructure
companies. She was also a corporate finance
lawyer at Slaughter and May.
Tenure
4 years
4. Justin Read
Non-Executive Director
Appointment
Appointed to the Board in February 2017 and
appointed as Senior Independent Director in
February 2022
Skills, competence and experience
Justin has substantial experience in real estate
and corporate finance. Justin is a non-executive
director of Ibstock plc, Affinity Water Limited
and Marshall of Cambridge (Holdings)
Limited, chairing the audit committee of
all three companies and being the senior
independent non-executive director of Affinity.
Justin is a Patron of Real Estate Balance and
an independent member of the Investment
Committee of the Logistis pan-European real
estate fund. He was group finance director of
SEGRO plc from August 2011 to December
2016. Between 2008 and 2011, Justin was
group finance director at Speedy Hire plc.
Tenure
8 years and 7 months
7. Michael Brodtman
Non-Executive Director
Appointment
Appointed to the Board in January 2023
Skills, competence and experience
Michael was chairman of the UK advisory
arm of CBRE, having spent a 40-year career
at the agency. Michael led its valuation and
operational real estate departments, growing
specialist teams in emerging sectors and
internationally. He moved into the role of
chairman in January 2020 and retired on
30 June 2022.
Michael is a non-executive director of Target
Healthcare REIT and Cadogan Group. He is
chair of the Industrial Dwelling Society and
a strategic adviser to the Unite Student
Accommodation Fund. He is also a Fellow of
the Royal Institution of Chartered Surveyors.
Tenure
2 years and 9 months
E
Executive Committee
A
Audit & Risk Committee
R
Remuneration Committee
N
Nominations Committee
B
Responsible Business Committee
Committee Chair
Key:
Balance of Directors FY25
Chair
Executive Directors
Non-Executive Directors
58%
Male
42%
Female
A
N
R
B
A
N
R
B
A
N
R
B
A
N
R
B
R
N
B
A
Information in this section of the Report is as at
19 November 2025
75
Financial statementsGover nanceStrategic report
Purpose
Grainger’s purpose is renting homes and enriching lives by
providing high-quality rental homes and great customer service.
The Board keeps this purpose in mind in its decision-making.
Culture
The Board believes that the culture of a business, in conjunction
with our values, is important to our successful long-term
performance and is integral to all that we do. Our values are
detailed at page 42.
How the Board members, particularly the Executive Team,
conduct themselves sets both the tone and the culture within
the Group.
The Board assesses and monitors the culture of the business to
ensure that our policies, practices and behaviours throughout
the Group are aligned with the Company’s purpose, values and
strategy. Each year, the Board receives a detailed presentation
from the Chief People Officer (CPO) on culture and engagement
and how it supports our strategy. During the year, Board
reporting includes our colleague engagement survey results,
highlighting what we do well and the areas for improvement.
The Board monitors activities to promote ED&I, including
setting targets for ethnic diversity in the senior management
of the Company. We have also this year, reviewed and updated
our Board Diversity Policy which is available on our website
(corporate.graingerplc.co.uk).
The Responsible Business Committee receives details of our
colleague engagement plans which are also reported to the
Board together with updates on the Voice of the Colleague
engagement undertaken by the Chair of the Responsible
Business Committee, who is also our designated Non-Executive
Director for workforce engagement. For more details on this see
pages 92 to 94.
During the year, the Board and I have also spent time with
our colleagues from across the business during both on-
site visits and visits to our offices. We look forward to these
opportunities as they enable us to gauge colleague views on
a range of topics, including our operations, and our strategy
and its implementation. The Directors also received reports
on colleague engagement activities at the Responsible
Business Committee.
The Board received regular updates on the implementation of
our People Strategy, and the refresh of People priorities for the
year, our commitment to colleague and leadership development,
supporting careers at Grainger and embedding a new integrated
HR and Payroll system (People Hub).
The Company achieved ‘Outstanding’ levels of colleague
engagement by Best Companies and are featured in the Top 50
Large Companies to work for.
From our engagement with colleagues and the reports received,
we firmly believe that the culture of the Company is strong and
has enabled us to perform well in the current market conditions.
We achieved an NPS score of +42 which we consider to be a
reflection of the continued strength of our culture. Our people
understand and support the strategic direction of the business
and are focused on delivering it.
Stakeholder engagement
The Board believes that positive engagement with our
Shareholders and other stakeholders is crucial to understanding
their views. We are also supportive of the emphasis the Code
puts on engagement with the wider stakeholder group and we
are cognisant of our director’s duties under section 172 of the
Companies Act 2006 (see our reporting on page 80).
To support our aim to be the UK’s leading residential REIT,
we regularly engage with our people, customers, suppliers,
and Shareholders to ensure that we harness their views and
communicate the Company’s progress. We also engage with the
Government, regulators and trade/industry bodies. Examples of
our engagement are included in our section 172 Statement, and
are included in our Stakeholder Engagement reporting which
starts at page 79.
As part of our colleague engagement arrangements the Board
schedules two colleague ‘Tea with the Board’ events each year.
See also the box below for details of our Summer Property
Tours. Our Investor Relations activities involved both Helen
Gordon and Rob Hudson completing 465 engagements with
Shareholders and analysts throughout the year.
Summer Property Tours for
Investors
During summer 2025, Grainger’s
senior leadership team hosted
a series of property tours to 15
institutions at our East London
cluster, Fortunes Dock in Canning
Town. The tour included visits to
both Argo and Nautilus Apartments,
where attendees were able to view
the amenity spaces residents enjoy
including the residents lounge, co-
working spaces, gym and podium
garden, as well as a show apartment.
Leadership and purpose continued
Seraphina Apartments, Fortunes Dock
cluster, Canning Town
76
Grainger plc
Annual Report and Accounts 2025
Compliance with the FRC Corporate Governance Code
The governance rules applying to all UK companies listed in the
Commercial Companies category of the UK Listing Authority are
set out in the Code, published by the Financial Reporting Council
(FRC). Copies of the Code can be obtained from www.frc.org.uk.
The Board fully supports the principles set out in the Code and
we confirm that we have complied with all its provisions (2018
version) throughout FY25.
This section of the Report sets out Grainger’s governance
policies and practices and includes details of how the Company
applied the principles and complied with the provisions of the
Code during FY25 and how we will apply the Code in FY26.
As required by the Code, this Report describes our activities
and key achievements during the year, giving Shareholders and
stakeholders the necessary information to evaluate how the
Code’s Principles have been applied.
Preparing for the 2024 Corporate Governance Code
During FY25 we have put in place arrangements to ensure
we comply with the requirements of the 2024 version of
the Code which starts to apply to Grainger from 1 October
2025. This included updating our Terms of Reference for each
Committee as well as preparing for the introduction of Provision
29 which will apply to Grainger from 1 October 2026. For further
details on this preparation see our Audit & Risk Committee Report
(page 95).
We expect to continue with our compliance with the Code
during 2026, save that Justin Read’s term on the Board will reach
nine years in February 2026. Notwithstanding this, the Board
has determined that Justin’s appointment should continue
and he is standing for re-election at the 2026 AGM. This is to
support Simon’s transition into the role of Chair. The Board
has considered Justin’s contribution to the Board as part of
the annual Board and Committee evaluation exercise and
determined that Justin remains independent.
Board effectiveness
The Chair, Executive Directors and the Company Secretary
ensure the Directors receive clear, timely information on all
relevant matters. Board papers are circulated in advance of
meetings to ensure there is adequate time for them to be
readand to facilitate robust and informed discussion.
The papers contain the CEO’s review, Financial review, Divisional
reports which include reporting on each business area, KPIs,
CPO report, Legal Risk & Governance report, Investor Relations
report and other papers on specific topics of interest to the Board.
Minutes of the Executive Committee meetings and detailed
financial and other supporting information are also provided.
The Board receives presentations throughout the year from
various departments across the business and from external
advisers on subjects including financing, regulatory issues for
listed companies, business valuation, sustainability and customer
feedback. Papers seeking Board approval for investments
also identify stakeholder interests which have been taken into
account to support the Board in its decision-making.
The CEO also provides ad hoc updates to the Board on any
significant matters between scheduled meetings.
The standard Board schedule includes six meetings throughout
the year, one of which also includes an off-site session specifically
focused on a review of the Company’s longer-term strategy.
Additional meetings are arranged as required.
The Board has a list of matters reserved to it which is set out
in our Matters Reserved for the Board Policy. There is a rolling
annual plan of items for discussion and Board meeting planning
involves reviewing the list of reserved matters and annual plan
regularly, to ensure all items are scheduled for review, together
with other key issuesas required.
At each Board meeting, the CEO provides a review of the
business, setting out how it has been progressing against
strategic objectives and details of any issues arising. In addition,
items that require formal Board approval are circulated in
advance with all supporting paperwork to aid appropriate
decision-making.
During the year, members of the Board spent time visiting
our building, in Cardiff, The Copper Works. The Directors met
colleagues during this visit, obtaining valuable insight into the
operation of the Company and engagement with colleagues.
The Board activity summary overleaf shows examples of
the subjects and matters the Board debated and considered
throughout the year.
October
April
November
May
December
June
January
July
February
August
March
September
Board meeting Site visit
Board meetings FY25
During the year the Board met six times and the attendance
atthemeetings is listed below.
FY25 attendance table
Executive Directors Meetings attended
Helen Gordon 6
Rob Hudson 6
Non-Executive Directors Meetings attended
Mark Clare 6
Justin Read 6
Janette Bell 6
Carol Hui 6
Michael Brodtman 6
Note: Simon Fraser joined the Board on 1 October 2025 and
therefore his attendance is not recorded in the table above.
77
Financial statementsGover nanceStrategic report
Transactions and
Operations 32%
• Considered investment opportunities presented by Management.
• Reviewed reports on the progress of our development schemes
proceeding in partnership with TfL.
• Considered material transactions and business opportunities
including the environmental impact.
• Received reports on the progression of our existing development
projects in the UK.
• Monitored operational performance (including occupancy levels
and rents) and market conditions.
• Received reporting on the Group’s procurement arrangements
including approval of a revised Supplier Code of Conduct.
• Considered the management and performance of our
key suppliers.
• Received reports on our customer engagement performance and
other operational KPIs and a presentation on the launch of our
new Customer Commitments.
• Received reporting on the impact of the Renters Rights Bill and
the steps being taken to prepare for implementation of the
Renters Rights Act.
Strategic 25%
• Reviewed Grainger’s strategy including
our capital allocation policy as well
as our options for growth in the BTR
market, including the acquisition of
stabilised stock.
• Received market update reports and
presentations from our corporate brokers
and advisers regarding our performance
in relation to the market and our peer
group companies.
• Considered competitor activity in the
BTR sector.
• Monitored the economic, legislative and
geopolitical landscape including regular
updates in relation to the Renters’ Rights
Bill and its impacts.
• Received updates on our sustainability
strategy, including our Net Zero
Transition Plan and a presentation on
Investor ESG expectations from our
corporate brokers.
• Received reports on development
projects and investment opportunities.
• Approved amendments to our articles
and the conversion of the Company
to a REIT which was achieved on
8 September 2025.
• Received reporting on investor
engagements including feedback
following full year and half year
results presentations.
People and
culture 10%
• Received reports on the activities
which promote diversity across the
business including the activities of the
ED&I Network.
• Received reports on Voice of the
Colleague roundtables hosted by
Carol Hui.
• Received regular reporting from the
CPO which includes progress reporting
in relation to, and the annual review and
approval of the People Strategy.
• Reviewed reporting relating to
culture and colleague engagement.
This included reporting on the results
of the Best Companies colleague
engagement surveys.
• Reviewed reports and updates on health
and building safety and the wellbeing of
our people and customers including the
annual review and approval of the H&S
Strategy and Business Plans.
• Met with colleagues as part of two
‘Tea with the Board’ events.
• Reviewed and approved the updated
Board Diversity Policy.
Governance, Compliance
and Risk 13%
• Approved the appointment of Simon Fraser to the Board as
Chair Designate.
• Undertook and considered an internal evaluation of the Board
andeach of the Committees’ effectiveness.
• Reviewed the Company’s compliance with the 2018 Code
and received updates on activities to support the Company’s
compliance with the 2024 Code, including approving updates to
each Committee’s terms of reference.
• Received briefings on regulatory and governance issues,
includingthe Renters’ Rights Bill (now the Renters’ Rights Act)
andthe Economic Crime and Corporate Transparency Act.
• Considered H&S and Building Safety matters.
• Received Investor Relations reports, including feedback from
Shareholders and analysts in connection with the 2024 full year
results and the 2025 interim results.
• Received reports on the development of our sustainability
strategy and our activities in this area, particularly the Net Zero
Carbon Transition Plan following the successful validation of the
new emissions reduction target by the SBTi.
• Received reports and approved recommendations from the
Nominations, Audit & Risk, Remuneration and Responsible
Business Committees.
• In conjunction with the Audit & Risk Committee considered the
Company’s principal risks and uncertainties and emerging risks.
Financial 20%
• Reviewed the Company’s treasury
strategy, debt and capital structure.
• Reviewed the Company’s financial plans
including approval of the annual budget
and business plan.
• Considered the Group’s financial
performance throughout the year.
• Agreed the revised dividend policy
following REIT conversion.
• Monitored performance of financial KPIs.
• Received reports on interaction with the
credit ratings agencies.
• Reviewed insurance arrangements as
part of the annual renewal process.
• Reviewed Management’s proposals for
operational efficiencies.
Board activity: How the Board spent its time
Leadership and purpose continued
78
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Annual Report and Accounts 2025
Stakeholder Engagement
The Board takes the interests of stakeholders into account
in its decision-making. The relevance of each stakeholder
group will increase or decrease by reference to the issue in
question, and the Board will seek to understand the needs
and priorities of relevant groups during its discussions and
decision-making.
This, together with the combination of the consideration of
long-term consequences of decisions and the maintenance
ofour reputation for high standards of business conduct,
isintegral to the way the Board operates.
We have continued to embed stakeholder interests into the
culture and operating model of our business. Papers presented
to the Investment Committee include a section on stakeholders’
interests ensuring that when matters are presented to the Board
for approval, the impact on stakeholders has been considered
in preparing the proposal. This supports the Directors in
discharging their duties under section 172 of the Companies
Act 2006.
Our section 172 reporting is set out on page 80.
Grainger plc
Board
Customers
Received reports on our customer
engagement insight programme.
Reviewed and fed back on plans
to improve customer engagement
including the launch of our new
Customer Commitments.
More detail on how Grainger
delivered for its customers is
included on page 83.
Shareholders
Reviewed and considered reports of
meetings with investors.
Considered questions and comments
from analysts.
Consulted with significant
Shareholders on key matters (e.g.
Directors’ Remuneration Policy).
Met with the Company’s brokers and
corporate advisers to understand
investor sentiment.
More detail on Grainger’s
engagement with Shareholders is
included on page 82.
Colleagues
Monitored colleague engagement
survey results.
Carol Hui, Chair of RBC is also the
Non-Executive designated for workforce
engagement. Carol meets with colleagues
at two roundtable meetings (Voice of the
Colleague) to canvas colleague views.
Received updates on the Company’s ED&I
Strategy and received reports on the
activity of the ED&I Network.
Considered the gender pay gap for the
business and means to address it.
Engagement with colleagues at office
and site visits including two ‘Tea with the
Board’ events each year.
More detail on Grainger’s engagement
with colleagues is included on pages 38
to43 and 84.
Suppliers
Received reports on our key suppliers
(including repairs and maintenance).
Received reporting on the
development of the Company’s
Supplier Code of Conduct and
procurement arrangements.
More detail on Grainger’s
engagement with suppliers is
included on page 85.
Government
Received reporting on Grainger’s
engagement with Government.
Oversaw Grainger’s relationships with
keylocal authority partners.
For more detail on Grainger’s engagement
with Government, see page 85.
Local
communities
Received reports on Grainger’s
engagement plans and actual events in
local communities.
Considered Company supported
charitable and social impact initiatives.
For more detail on how Grainger engaged
with local communities, see pages 43
and 84.
79
Financial statementsGover nanceStrategic report
Section 172 reporting
Engagement with our stakeholders
In its decision-making the Board seeks to promote the long-term success of the Company for the benefit of Shareholders,
whilsthaving due regard to our stakeholders and the matters set out insection 172(1)(a) to (f) of the Companies Act 2006.
An overview of the key channels and processes used for engagement with our stakeholders and outcomes from this engagement
during the year are set out in the table below.
A summary of the Board’s activity and how matters raised through engagement have been considered in key decisions taken during
the year is provided on pages 83 to 85.
This statement summarises how our Directors addressed the matters set out in section 172(1)(a) to (f) of the Companies Act 2006
Set out at the end of this section are some examples and decisions needed in the year.
The Remuneration Committee reviewed our share plans arrangements which led to the update of plan rules and the appointment
of a share plan administrator.
Section 172
Requirement
Overview FY25 matters
Further
information
(a) the likely
consequences of
thedecision in the
long term
Grainger is committed to being
a long-term investor in homes
and communities, and delivering
long-term success to our
Shareholders.
The Board has set the Company’s purpose: renting
homes, enriching lives which we deliver through our
business model.
Each year the Board reviews the business’s long-term
strategy and monitors delivery of the Strategy at
each of its meetings.
Business Model
pages 24 to 25
Sustainability
Report page 37
Governance Report
page 72
(b) the interests
of the Company's
employees
Colleagues are at the heart of
our business and our People
Strategy focuses on delivering
the highest levels of learning
and development, wellbeing
and inclusion, including via
ourestablished colleague
ED&IForum.
The Board reviewed the implementation of the new
HR system (People Hub).
The Responsible Business Committee oversees
employee engagement and consultation.
The Directors received employee related reporting
from the CPO at each Board and Responsible
Business Committee meeting, including the outputs
from our colleague engagement activities.
During the year we secured a 2 star rating from
Best Companies and continued with our ED&I
focus including our National Equality Standard
Accreditation as well as demonstrating positive
female representation via the FTSE Women
Leadersreview.
Sustainability
Report page 37
Governance Report
page 72
Responsible
Business
Committee Report
page 92
(c) the need
to foster the
Company’s business
relationships with
suppliers, customers
and others
The relationships with our key
partners and suppliers are
critical to our ability to deliver
and maintain high-quality rental
homes. Strong relationships
with our customers, built by our
property managers and on-site
teams, supports retention and
creates a community within
ourbuildings.
Key partners:
The Board received regular reporting on
arrangements with key partners, including TfL
via the Development Director’s reporting.
Suppliers:
The Board received reporting on the development
and launch of the Supplier Code of Conduct in
addition to regular reporting on key suppliers,
including the reporting in relation to our repairs
andmaintenance supplier arrangements.
Sustainability
Report page 37
Governance Report
page 72
(d) the impact of
the Company’s
operations on the
community and the
environment
We consider communities to
encompass those created within
our buildings as well as those
around them, and we actively
seek ways to promote thriving
communities and to minimise
ourimpact on the environment.
The Responsible Business Committee oversees
our community (including charitable) and
environmentalinitiatives.
The Directors receive updates on progress at
the Board and Responsible Business Committee
meetings, including progress of our Net Zero
Transition Plan.
During the year we successfully achieved
validationofour SBTi target.
Sustainability
Report page37
Responsible
Business
Committee Report
page 92
Governance Report
page 72
Leadership and purpose continued
How the Board understands and responds to the needs of our stakeholders continued
80
Grainger plc
Annual Report and Accounts 2025
Reporting on who the Board considers to be our key stakeholders and how we engage with them is set out in our Stakeholder
Engagement reporting which starts on page 79. Some examples of how the Board has considered stakeholders during its decision-
making in 2025is set out below.
1. Conversion to a REIT
On 8 September 2025, Grainger converted to REIT status. The REIT regime was created by HMRC to encourage investment
in UKproperty and is an internationally recognised approach for property investment businesses. While there are no changes
to day-to-day operations or business strategy, the REIT status effectively provides tax transparency allowing Property Rental
Business profits to be taxed in the hands of Shareholders rather than at Company level. The Company will benefit from improved
cash flow and Shareholders willbenefit by receiving returns taxed in a way more in line with direct holdings of real estate assets.
The change has been discussed extensively with significant Shareholders, many of whom have advocated for the change in status.
Our colleagues, suppliers, operations, communities and our environment are not affected.
2. Updates to the Company Articles
Our updated articles were approved and adopted at a general meeting held on 1 September 2025. Changes were proposed to
update the articles, which were adopted in 2010, as well as introduce provisions to support the Company’s conversion into a
REIT. The updated articles ensure that the Company’s governance arrangements are in line with best practice and support the
conversion of the Company into a REIT. The updated articles do not directly impact colleagues, suppliers, operations, communities
or our environment.
3. Directors’ Remuneration Policy (Policy)
Ahead of the 2026 AGM, where we are due to present our Directors’ Remuneration Policy for its tri-annual approval, we have
consulted with significant Shareholders. This feedback was collated and shared with the Remuneration Committee and has been
fed into the Policy design to ensure that it supports the delivery of our strategy. The carbon metrics in our 2025 LTIP awards have
also been updated to align to the new validated SBTi target. The updated Policy does not directly impact colleagues, suppliers,
operations, communities or our environment.
(e) the desirability
of the Company
maintaining a
reputation for
high standards of
business conduct
Grainger is proud to be a
FTSE4Good business and adheres
to the highest standards of
business conduct in interactions
with all our stakeholders.
The Company also has in place
established compliance policies
and procedures which includes
regular training.
The Board sets and monitors our culture and values.
Our values set the standards of conduct for all
involved in our organisation and our values are a key
feature of our company-wide customer service style
training programme.
During the year we developed our ‘One Grainger’
culture.
We developed and implemented our arrangements in
response to the new failure to prevent fraud offence
introduced by the Economic Crime and Corporate
Transparency Act.
Sustainability
Report page 37
Our purpose and
values page 42
Governance Report
page 72
(f) the need to act
fairly as between
members of the
Company
We conduct regular direct
engagement with our
Shareholders through a range of
channels, and ensure key issues
raised are factored into strategic
decision-making.
Engagement with Shareholders
is facilitated by our Investor
Relations and Company
Secretarial Teams.
The Board monitor investor engagements and
receive regular reporting on Director engagements.
During the year we continued our extensive
programme of investor engagement which included
over 465 meetings, 14 conferences and conducted
seven tours of our sites with investors.
On 8 September 2025, we also successfully converted
into a REIT.
We also adopted updated articles following the
approval by Shareholders at our General Meeting on
1 September 2025.
As part of the tri-annual review of our Directors’
Remuneration Policy we undertook a consultation
with significant Shareholders which was led by the
Remuneration Committee Chair.
Shareholder
Engagement
page 82
Governance
Report
page 72
Directors’
Remuneration
Report page 100
81
Financial statementsGover nanceStrategic report
October 2024
Substantial shareholdings
The table below details interests disclosed to the Company at
the end of FY25 and at 18 November 2025 (being the latest
practicable date prior to the date of this Report). The information
is reported in accordance with DTR 5 and as required by LR 6.6.6.
The table details interests with voting rights (direct or indirect)
amounting to 3% or more and the data included is derived from
analysts’ reports and replies received from Shareholders.
30 September 2025 18 November 2025
Holding
m
Holding
%
Holding
m
Holding
%
BlackRock Inc 69.8 9.4 70.3 9.5
Norges Bank Investment
Management
64.6 8.7 64.6 8.7
FMR LLC 33.2 4.5 34.4 4.6
Dimensional Fund Advisers 23.7 3.2 22.7 3.1
MFS Investment Management 29.2 3.9 16.5 2.2
Relations with Shareholders
The Board believes that understanding the views of
Shareholders is a fundamental principle of good corporate
governance. Strong engagement with all stakeholders,
includingShareholders, is key to achieving this.
The Group’s website includes an Investor Relations section,
containing all announcements issued via the Regulatory News
Service (RNS), share price information, as well as Investor
Documents available for download.
We send out the Notice of Meeting for a General Meeting (including
the AGM) at least 20 working days before the meeting. We hold
separate votes for each proposed resolution. A proxy count is
given in each case. Grainger includes, as standard, a ‘vote withheld’
category, in line with best practice. Shareholders can also lodge
their votes through the CREST system.
Our investor relations activities are tailored to the financial
reporting calendar, with additional engagements taking place
when considered beneficial to the Company. During the year, we
have held over 465 meetings with Shareholders, analysts and
potential investors. Helen Gordon, Rob Hudson and other senior
managers attend the vast majority of these meetings and manage
the Group’s Investor Relations programme supported by the
Director of Corporate Affairs. We always seek feedback at these
meetings and present it to the Board.
In addition, the Company Secretary engaged with a combination
of fund managers and corporate governance officers from
some of the Company’s major Shareholders before the 2025
AGM. We anticipate a similar pre-AGM engagement process
will take place in 2026. The Company has also engaged with
significant Shareholders in relation to the review of our Directors’
Remuneration Policy. The communication exercise closed in
October 2025.
Attendance at investor meetings
Helen Gordon – CEO 79%
Rob Hudson – CFO 79%
Senior Executive 96%
November 2024
• Full Year Results Presentation
and Roadshow
• UBS Global Real Estate
Conference (London)
• Closed period
• Pre close trading update
• Citi Conference (US)
• Berenberg Conference (UK)
• Bank of America Conference
(London)
March 2025
February 2025
• AGM (Newcastle)
• Trading update
Key Shareholder
events 2024/25
Ongoing dialogue with our Shareholders is fundamental to
ensuring that there is an understanding of the strategy and
governance of the business, and that the Board is aware of
the issues and concerns of our investors. In this section of
the Report, we highlight the key activities of our Shareholder
engagement programme during the year.
Shareholder by region
UK
North America
Europe
Rest of the world
January 2025
• Barclays Conference
(London)
• Deutsche Numis Conference
(London)
• Citi RE Credit Conference
(London)
April 2025
• Kempen Conference (US)
• Closed period
May 2025
• HY Results Roadshow
• Kempen Conference
(Amsterdam)
June 2025
• Morgan Stanley Conference
(London)
• EPRA Corporate Access
Conference (London)
• Midlands Regional Wealth
Managers Roadshow
• Summer Property Tours
July 2025
August 2025
• Posting General
Meeting Notice
• Commencement of
Director Remuneration
Policy Consultation
September 2025
• General Meeting to
approve changes to Articles
of Association
• Bank of America Conference
(US)
• Goldman Sachs Conference
(London)
• EPRA Conference
(Stockholm)
21%
48%
1%
30%
Shareholder engagement
Leadership and purpose continued
How the Board understands and responds to the needs of our stakeholders continued
82
Grainger plc
Annual Report and Accounts 2025
How we engage
How the Board understands and responds to the needs of
our stakeholders continued
Customers
For Grainger to provide safe, high-quality homes
and good service, whilst responding to their
needs promptly.
Understanding our customers and their needs, and
communicating effectively with them, is essential to providing
the great homes and service that we aim to deliver.
Our customer insight programme provides us with this essential
knowledge and is factored into the decisions we take, the
buildings we create and how we operate.
We use multiple communication channels and methods to
reflect the wide range of customers we have.
Our far-reaching Customer Experience Programme is designed
to continually enhance and improve the Grainger rental
experience for our customers. It includes bespoke customer
service training for the entire business including our Executives.
We also launched our Customer Commitments during the year
which supports how we deliver services to our customers.
• Using technology to review our customer feedback ensures
we understand our customers issues and enables us to
address them
• Customer Net Promoter Scores at +42%
• BTR average length of stay of 31 months
Shareholders
For Grainger to generate long-term, sustainable,
attractive total returns and to meet sustainability
expectations.
We have a comprehensive Investor Relations programme,
which we build upon and extend each year. Activities include
investor roadshows, conferences, trading updates and property
tours. Key investor engagement events during the year are
reported on page 82. We ensure that we are both accessible
and approachable and that we respond promptly to all
queries. We also engage in and respond annually to a range of
sustainability benchmarks.
• Held over 465 investors, analysts and potential investors
meetings during the year and have met with four sales teams
• Received 35 pieces of analyst coverage, with 11 analysts
covering Grainger
• Attended 14 investor conferences/events
• Hosted two investor roadshows, and seven property tours
Outcomes and examples Stakeholder expectations
83
Financial statementsGover nanceStrategic report
How we engage
Local communities
For Grainger to act responsibly and make a
positive impact on the local area while listening
to and taking onboard local views, preferences
and concerns.
Grainger seeks to develop thriving communities both within
and around our buildings. Our development activities will
include conducting local engagement and consultation
via events, meetings, and direct communications with the
local community.
Supporting communities local to our BTR homes is part of
our Customer Experience Commitments and our Living a
Greener Life campaign. Where appropriate we engage with
local authorities and create partnerships to support local
businesses and charities.
Our Residents Events Committee seeks to help residents
build a community in their locations through organising
local activities and events and engaging with local
community stakeholders.
• Each BTR site has in place Community Engagement Plans
which involve local stakeholders
• Supported local charity partners including The People’s
Kitchen in Newcastle upon Tyne, Mustard Tree in Manchester
and Emmaus in Leeds
• Provided two homes for young people at risk of homelessness
through the LandAid BTR Pathfinder
• 631 residents and community events held throughout
the year
• Further enhanced and embedded Living a Greener Life
customer and colleague engagement programme during
the year
Colleagues
For work to be fulfilling and rewarding. To be fairly
treated, recognised and remunerated. To operate in
a safe and comfortable environment, with learning
and development opportunities.
Our colleagues’ experience of working at Grainger is critical
to our ongoing success. We actively seek feedback and listen
to our colleagues and shape our people initiatives upon that
feedback. Our internal engagement programme includes
surveys, Company-wide calls hosted by our CEO, our internal
newsletter and our intranet. We organise a range of events for
colleagues, including campaigns organised by our colleague-led
ED&I Network and charity fundraising events.
Carol Hui, independent Non-Executive Director and Chair of the
Responsible Business Committee, is responsible for the Voice of
the Colleague and is our Non-Executive Director designated for
workforce engagement.
• Achieved ‘Outstanding’ rating in our annual employee survey
in 2025, run by Best Companies and listed in UK’s Top 50 Large
Companies to work for 2025
• Strong colleague engagement reflected in high survey response
rates and colleague-led roundtables across diverse topics
• 90% of colleagues completed our voluntary ED&I questionnaire
• Regular all-company calls led by our CEO, Helen Gordon and
involving briefings from different business areas with a Q&A
including members of the Executive Committee
• New HR & Payroll System designed to enhance colleague
experience and efficiency in accessing personal information
Stakeholder expectationsOutcomes and examples
Leadership and purpose continued
How the Board understands and responds to the needs of our stakeholders continued
84
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Annual Report and Accounts 2025
How we engage
Suppliers
For us to act with integrity and professionalism,
pay promptly and ensure that we are protecting
the rights of all those employed through our
supply chain.
Our key suppliers and partners are carefully managed to
deliver agreed service levels and positive customer outcomes.
Segmentation of our critical suppliers ensures we adopt a
risk based approach to supplier onboarding and supplier
management. Our supplier selection process is supported
by Once for All, and we will be looking to implement a due
diligence approach for non-construction suppliers during
2026. Proactive contractor management ensures regulatory
compliance including H&S and modern slavery.
• Considered the provision of services by our key repairs
and maintenance supplier including monitoring the
performance and measures to address any issues arising from
the arrangements
• Increased supply chain focus on issues including
decarbonisation, human rights and modern slavery
• Consistently paying suppliers within our standard 30 day terms
• Regular supplier H&S audits completed, with four audits
undertaken within the year
• Launched The Key Supplier Code
• Engaged key suppliers in sustainability initiatives
Government
For Grainger to lead the sector as a responsible
employer and housing provider. To support
Government in delivering its objectives such as
increasing provision of high-quality homes and
meeting its net zero carbon ambitions.
As the UK’s largest listed landlord, we take a front-footed,
proactive approach to engagement with the Government,
andthe main opposition parties and other relevant public
bodies, such as Homes England, Greater Manchester
CombinedAuthority and the Greater London Authority.
We respond to relevant Government consultations and
meet with Ministers, officials and politicians on important
topics affecting our sector. We take a thought leadership
role and actively participate and contribute to our industry
trade associations, the British Property Federation,
BusinessLDNand others.
• Regular Board reports, updates and discussions relating to
political engagements
• Helen Gordon appointed to HM Government’s New Towns Task
Force in 2024 and continued to participate until July 2025
• Engaged heavily with policy makers, Members of Parliament,
Government Ministers and Government Officials on reform of
the private rented sector including in relation to the Renters
Rights Bill
• Provided insight to ministers and regulators in consultations
onthe planning system
• Provided policy makers with expert insight on how to stimulate
housing supply and investment, and on areas impacting
our business such as Selective Licensing, Building Safety
Levy, Second Staircases, Rental Affordability and other
proposed legislation
• Contributed to industry study and reporting relating to
social housing
Stakeholder expectationsOutcomes and examples
85
Financial statementsGover nanceStrategic report
Governance framework
Oversight Committees
Management
Committee
Responsible for
the day-to-day
management
of the business
and ensuring our
management
is briefed on
business activities
and priorities.
Investment
Committee
Reviews and
approves material
transactions,
allocates
investment capital
and proposes
investment
hurdle rates for
Board approval.
Finance
Committee
Responsible for
financial and
technology
matters across
the Group,
which include
accounting,
financial
reporting,
tax, treasury,
corporate and
commercial
finance,
procurement,
sustainability
and IT.
Operations
Board
Responsible
for executing
operations strategy,
performance
management, risk
management and
governance across
our operations and
asset management
activities.
Development
Board
Responsible for
the strategy
implementation,
performance
management,
risk management
and governance
in relation
to our land
and development
activities.
Health
& Safety
Committee
Responsible for
monitoring and
reporting on H&S
compliance, policy
and auditing
activities across
the business.
Data
Protection
Committee
Responsible for
maintaining and
reporting on
data protection
compliance
activities across
the business.
Division of responsibility
Grainger plc Board
Responsible to the Company’s Shareholders for the long-term success of the Group, its strategy, purpose,
values and governance. The Board defines the Company’s purpose and sets the strategy to deliver it,
underpinned by the values and behaviours that shape our culture and the way we conduct our business.
It provides leadership of the Group and, either directly or by the operation of its Committees, applies
independent judgement on matters of strategy, performance, operations, the overall approach to risk
management and internal controls, resources (including key appointments), and culture and standards
of behaviour.
Executive Committee
This Committee operates under the direction and authority
of the CEO. It makes key decisions on matters to ensure
achievement of strategic plans, reviews strategic initiatives,
ratifies executive decisions and considers key business risks.
It is supported by other committees which each have specific
focus areas.
Responsible Business
Committee
Oversees the development
and implementation of
strategies and policies in
all areas of responsible
business and sustainability
including climate change,
environmental, social,
colleague engagement
andED&I.
Remuneration
Committee
Responsible for determining
the Directors’ Remuneration
Policy and level of reward
for the Executive Directors
and Senior Managers to
align their interests with
those of the Shareholders.
Nominations
Committee
Reviews the structure,
sizeand composition of the
Board and its Committees.
Oversees succession
planning for Directors
and Executive
Committee members.
It leads the process for
appointing Directors.
Audit & Risk
Committee
Responsible for overseeing
the Company’s financial
statements and reporting
including matters of
significant judgement.
Reviews the work of internal
and external auditors
and matters of significant
judgement by management.
It reviews the risk
management framework
and the integrity of the risk
management and internal
control systems.
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Annual Report and Accounts 2025
Roles and responsibilities of our Directors
Role Key Responsibilities
Chair
Non-Executive Director
Leads the Board and is responsible for its overall effectiveness in directing the Company. The Chair
demonstrates objective judgement and promotes a culture of openness and debate. The Chair facilitates
constructive Board relations and the effective contribution of all Non-Executive Directors, and ensures that
Directors receive accurate, timely and clear information.
CEO
Executive Director
The most senior Executive Director and responsible for proposing Company strategy and for delivering the
strategy as directed by the Board. The CEO also has primary responsibility for setting an example to the
Company’s workforce and for communicating to them the expectations in respect of the Company’s culture.
She is responsible for supporting the Chair to make certain that appropriate standards of governance
permeate through all parts of the organisation and ensures that the Board is made aware of views gathered
via engagement between management and the workforce.
The Chief Executive chairs the Executive Committee, the Management Committee and the
Investment Committee.
CFO
Executive Director
Responsible for the financial stewardship of the Group’s resources through compliance and good judgement.
He provides financial leadership in the implementation of the strategic business plan andalignment with
financial objectives.
Senior Independent Director
Acts as a sounding board for the Chair, providing them with support in the delivery of their objectives and
leading the evaluation of the Chair on behalf of the other directors.
The Senior Independent Director also serves as an intermediary for the other Directors where necessary and
is responsible for the succession process for the Chair, working closely with the Nominations Committee.
The Senior Independent Director is available to meet Shareholders if they have concerns, and where contact
through the normal channels has not resolved the issue or is inappropriate. He also leads the annual
performance review of the Chair.
Non-Executive Directors
Responsible for providing independent and objective judgement and scrutiny to all
matters before the Board and its Committees, using their substantial and wide-ranging
skills, competence and experience. The Non-Executive Directors will hold to account the
performance of the Executive Directors and the Management Teams against agreed
performance objectives.
Non-Executive Directors will devote sufficient time to discharge their responsibilities
effectively and they need timely, high-quality information sufficiently in advance of
meetings to support them in carrying out their role.
Throughout the year, the Chair will hold meetings with the Non-Executive Directors
without the Executive Directors present. As part of the annual evaluation process,
theNon-Executive Directors may meet without the Chair present.
Copies of the Letters of Appointment for the Non-Executive Directors and the Directors’ Service Contracts for the Executive Directors are
available from the Company Secretary and at the AGM.
87
Financial statementsGover nanceStrategic report
Dear Shareholders,
I am pleased to present the Nominations Committee
report for FY25 which details the main activities that we
undertook during the year.
The Nominations Committee plays a fundamental role in
ensuring that appointments to the Board are subject to a formal,
rigorous and transparent procedure, and that an effective
succession plan for Board and Senior Management is maintained.
The Committee is also responsible for succession planning, and
monitors talent development at Senior Management level.
The Committee monitors the structure, size and composition
(including the skills, experience, independence, diversity,
knowledge and length of service) of the Board as a whole and
ofits Committees, with any changes recommended to the
Boardfor its review and decision.
During the year, the Committee, led by Justin Read, the Senior
Independent Director, conducted a formal process for the
appointment of the Chair Designate, which resulted in our
announcement on 31 July 2025 of the appointment of Simon
Fraser to the Board as Chair Designate. Simon will stand for
election at the 2026 AGM, and if elected, will take over as
Chairwith effect from the close of the AGM.
I was appointed to the Board in February 2017 and because I will
have completed nine years as Chair in February 2026, I will retire
from the Board and its Committees with effect from the close
ofthe 2026 AGM.
This section of our Report details the key duties of the
Committee and how it has discharged its responsibilities
duringthe year.
Mark Clare
Chair of the Nominations Committee
19 November 2025
Key responsibilities
The Committee’s role and responsibilities are set out in its Terms
of Reference which can be found on our website: corporate.
graingerplc.co.uk and these include:
• Board Composition: regularly review the structure, size and
composition (including the skills, experience, independence,
knowledge and diversity) of the Board, considering length of
service of the Board as a whole and looking for membership
tobe regularly refreshed.
• Succession Planning: ensure effective succession planning
forthe Board, its Committees and Senior Management.
• Appointments to the Board: identify and nominate, for the
approval of the Board, candidates to fill Board vacancies, and
ensure that appointments to the Board are subject to a formal,
rigorous and transparent procedure.
• Promote Equality, Diversity and Inclusion: ensure that
appointments and succession plans are based on merit and
objective criteria and promote diversity of gender, social
and ethnic backgrounds as well as cognitive and personal
strengths, and work closely with the Responsible Business
Committee with regard to the Group’s wider ED&I strategy
andagenda.
Membership and attendance table
During the year the Committee met three times. Set out
in the table below are details of the membership and
attendance at these meetings.
Members
Meetings
attended
Mark Clare (CommitteeChair) 3
Carol Hui 3
Janette Bell 3
Justin Read 3
Michael Brodtman 3
Simon Fraser was appointed to the Board as Chair
Designate on 1 October 2025, and he also joined the
Nominations Committee. Subject to his election at the
2026 AGM, Simon will take over as Chair of the Board and
the Nominations Committee with effect from close of
the AGM.
How the committee spent its time
Non-Executive Director
succession
Exec and senior
management succession
Committee composition
Governance
15%
20%
45%
20%
Nominations Committee Report
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• Induction and training: ensure new Directors undertake
an appropriate induction programme and review training
requirements for the Board as a whole.
• Board Evaluation: support the Chair with the annual Board
and Committee effectiveness evaluation process.
Terms of reference
The Committee’s terms of reference are reviewed each
year by the Committee and recommended to the Board
for approval. We assessed and confirmed our compliance
with our terms of reference and we also updated our terms
of reference to take into account the requirements of the
new Code which applies to Grainger from 1 October 2025.
The Committee terms of reference are published on our
website(corporate.graingerplc.co.uk).
Meetings
The Committee’s main work follows a structured programme
of activity agreed at the start of the year. Attendance at the
meetings is set out on page 88.
This report includes a non-exhaustive list highlighting the
Committee’s work during the year.
Invitations to attend meetings
The CEO and CPO are invited to attend meetings during the year
to support the Committee with its deliberations. The Company
Secretary acts as secretary to the Committee. During the year
Lygon also attended some of the meetings to support the
Committee in relation to the Chair’s succession arrangements
which resulted in the appointment of Simon Fraser.
Simon Fraser has been a member of the Committee since his
appointment to the Board on 1 October 2025. Subject to his
election at the 2026 AGM, Simon will take on the role of Chair
ofthe Board and this Committee at the close of the 2026 AGM.
Year 1
2024 External
Year 2
2025 Internal
Year 3
2026 Internal
Year 4
2027 External
Evaluation 2025 Key Findings
The Board operates effectively,
demonstrating good governance
processes, strong stakeholder
engagement and robust risk
management. The evaluation
highlights that the Board
successfully navigates complex
regulatory and economic
challenges whilst maintaining clear
strategic direction.
2025 Principal recommendations
• Enhance inter-meeting reporting of significant matters to the Board
• Develop direct Board-customer engagement strategies and review
complaints monitoring
• Conduct Senior Independent Director succession planning during the
year ahead
• Schedule topics (e.g. Emerging Risks) as a dedicated Board Dinner
Discussion topic
• Consider extending selected meetings, as required to allow for additional
timeto support deeper dive discussions
Each year the Directors monitor completion of the recommendations arising from each review.
• Executive Director and Senior Management succession planning
• Board composition review including NED skills, expertise,
experience and time commitment
• Board and Committee evaluation actions review
November 2024
May 2025
• Senior Management Talent Review
• Board composition including Chair succession planning
• Board and Commission evaluation actions monitoring
May 2025
• Chair succession
June 2025
• Chair succession
Key
activities
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Process for Board appointments
The Nominations Committee will, taking into account the
structure, size and composition (including skills, experience,
independence, knowledge and diversity) on the Board, produce
a specification of the personal attributes, experience and
capabilities required to perform the relevant appointment.
In circumstances where external recruitment or benchmarking
of an internal candidate is appropriate, an independent external
search consultancy will be engaged to support the process.
A recommendation is then made to the Board concerning the
appointment of any Director. The Committee also supports
theBoard in the appointment of the Company Secretary.
During the year, the Committee, led by Justin Read (Senior
Independent Director) undertook a process ahead of
recommending to the Board the appointment of Simon Fraser.
This resulted in Simon’s appointment to the Board and all its
Committees, as a Non-Executive Director and Chair Designate,
on 1 October 2025.
Simon has prior to his appointment been determined to be
independent (as defined by the Code). He will stand for election
at the 2026 AGM, and if elected, will take over as Chair of the
Board and the Nominations Committee.
Mark Clare, attended but did not Chair the Board or any
Committee meetings which related to his succession.
Justin Read, who was leading this process, chaired
these meetings.
The Committee was assisted by Lygon on the selection and
appointment of Simon. Lygon follow the Voluntary Code of
Conduct for Executive Search Firms, which lays out steps for
search firms to follow across the search process. During the
search Lygon ensured that the Board considered a diverse
rangeof candidates.
Board composition and independence
During FY25 the Board’s composition included a Non-Executive
Chair, two Executive Directors and four independent
Non-Executive Directors.
Accordingly, the composition complies with the Code
provision that more than 50% of the Board (excluding the
Chair) should include independent Non-Executive Directors.
Further, Mark Clare was determined to be independent prior
tohis appointment.
On 1 October 2025, Simon Fraser joined the Board as Chair
Designate. The Board have determined Simon to be independent
and he will, subject to his election at the 2026 AGM, take over as
Chair of the Board and the Nominations Committee from the
close of the 2026 AGM.
Non-Executive Independence
The Board considers Non-Executive Director independence
annually as part of the Board and Committee evaluation
exercise. The exercise takes into account each individual’s
professional characteristics, their behaviour at Board meetings,
and their contribution to unbiased and independent debate.
As explained above, the Board determined that Mark was
independent ahead of his appointment as Chair and the
Board considers that all of the Non-Executive Directors are
independent, as defined by the Code. Further, Simon Fraser,
Chair Designate, was determined to be independent prior to
his appointment.
Board performance evaluation
An external review having been undertaken in FY24, this year
the evaluation of Board effectiveness was carried out internally
using a questionnaire in accordance with our usual approach.
We issued detailed questionnaires to all Board members,
collated the feedback and created an action list of suggested
improvements. Our next externally facilitated evaluation is
scheduled to be undertaken in FY27.
The FY25 review concluded that the Board and its committees
were operating effectively. A selection of the key findings and
recommendations are detailed on page 89.
The Committee also monitored the progression of the principal
recommendations arising from the FY24 review and concluded
that all were completed.
The Nominations Committee Report continued
Gender and ethnicity diversity data (as at 30 September 2025)
Board Senior positions on the Board
1
Executive Committee*
Number % Number % Number %
Gender
Men 4 57 3 75 5 63
Women 3 43 1 25 3 37
Other
Not specified/prefer not to say
Ethnicity
White British/White Other 6 86 4 100 7 87
Mixed/Multiple Ethnic Group
Asian/Asian British 1 14 1 13
Black/African/Caribbean/Black British
Other Ethnic Group
Not specified/prefer not to say
Total 7 100 4 8 100
1. CEO, CFO, Chair, SID.
* Executive Committee excludes CEO and CFO.
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Induction and professional development
The Directors receive reporting, training and updates during
the year which support them in their role. This includes
Group updates, market developments, legal and regulatory
requirements (including updates to the legislative landscape)
andchanges to accounting requirements. For example, during
the year the Audit & Risk Committee received a briefing on
treasury and hedge accounting from the Group Treasurer.
New Board members are also provided with a comprehensive
induction programme and a plan has been created for
Simon Fraser which will be delivered during the year ahead.
Individual Directors also identify their own training needs to
ensure they are adequately informed about the Group and
theirresponsibilities as a Director.
The annual evaluation process and empirical observations
provide the Board with confidence that all of the Directors
havethe knowledge, ability, skills and experience to perform
thefunctions required of a director of a listed company.
Committee changes
It is our policy that all Non-Executive Directors are members of
all of our Board Committees, save that in accordance with the
Code, the Chair is not a member of the Audit & Risk Committee.
Our practice reflects that we have a small Board and
we considerthat this arrangement provides each of the
Non-Executive Directors with good visibility across the
Group’s activities.
Diversity
The Directors are committed to promoting diversity on the
Board, the Executive Committee, within Senior Management
aswell as within our wider workforce.
With regard to the Board and the Executive Committee, the
Board has adopted a Diversity Policy, which illustrates our
commitment to both the Hampton-Alexander Review and the
Parker Review. It includes gender and ethnicity targets and it
wasreviewed and approved during 2025.
Set out in the table on page 90 is our diversity reporting as
required by Listing Rule LR 6.6 for FY25.
When recruiting, we ensure the search agencies we use are
signed up to The Voluntary Code of Conduct for Executive
Search Firms and we instruct them to provide us with a diverse
range of candidates. For details of the search which led to the
appointment of Simon Fraser, see page 90.
All appointments to the Board are made on merit, and within
this context the Directors will continue to promote diversity.
During the year, female representation on the Board was at 43%,
which exceeds the 33% target recommended by the Hampton-
Alexander Review. Our objective for the Board is to consistently
have at least one-third of Directors being female.
The Board is also mindful of the Parker Review regarding ethnic
diversity on UK boards that was published in 2017. The Review
recommends that each FTSE 250 board should have at least
one ethnic minority director by 2024. The Board has met this
recommendation since October 2021.
The responsibility for monitoring ED&I across Grainger’s wider
colleague population rests with the Responsible Business
Committee. For details on their activities in this area,
see pages 92 to 94.
Executive Committee and Senior Management
Succession planning
During the year, the Committee received presentations from
the CPO in relation to our succession plans for our Executive
Committee and Senior Managers and related retention
strategies. A number of senior appointments were made
duringthe year, including Laura Watson, Procurement Director.
The Committee also received presentations from the CPO in
relation to the Company’s wider talent management initiatives,
which seek to identify and prepare future leaders of the business
and support them in developing and progressing their careers
at Grainger. This includes putting in place learning opportunities
and interventions which add the most value, including
external coaching.
Time commitment
On behalf of the Board, the Nominations Committee, monitors
the external commitments of the Chair and each of the
Non-Executive Directors. We are satisfied that each Non-
Executive Director is able to devote sufficient time to Grainger.
The Board and Committee evaluation process confirmed that
during the year each Director committed enough time to be able
to fulfil their duties and has capacity to continue doing so.
Election and Re-election of Directors
In previous years, we have adopted the recommendations of
the Code that all Directors offer themselves for re-election
annually, even though the Company’s articles of association
only require this every three years. During this year we proposed
amendments to our articles of association which included
a requirement for annual re-election. This was approved by
Shareholders at our general meeting on 1 September 2025.
Accordingly, all Directors excluding Mark Clare, will stand for
election or re-election at the 2026 AGM. Mark will retire from
theclose of the 2026 AGM. The Board recommends that all
Directors standing for election or re-election are elected or re-
elected. Details of the Directors standing for election/re-election
are set out on pages 74 and 75 of this Report and the resolutions
will be included in the 2026 AGM Notice.
Access to independent advice
All Directors have access to the advice and services of the
Group General Counsel and Company Secretary, who ensures
we follow our governance processes and maintain high
corporate governance standards. Any Director who considers it
appropriate may also take independent, professional advice at
the Company’s expense.
Balance of knowledge, skills and experience
The Directors have wide-ranging experience as senior business
people. At the date of this Report, the Board composition
includes expertise in real-estate, property development,
corporate finance, operations, sales and marketing, REIT,
surveying and valuations, sustainability and the listed
company environment.
Mark Clare
Chair of the Nominations Committee
19 November 2025
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Responsible Business Committee Report
Dear Shareholders,
I am pleased to present Grainger’s Responsible Business
Committee report. Established in 2022, the Committee
oversees a broad remit of responsible business topics
to support our sustainability objectives such as climate
change, environmental, biodiversity, stakeholder
engagements including community and colleague
engagements, social impact, and ED&I.
This report summarises the main activities
undertakenduring the year.
Key responsibilities
The key responsibilities of the Committee include:
• Agreeing and measuring progress against the Company’s
sustainability strategy, commitments and targets.
• Overseeing and monitoring the development and
implementation of the Company’s Net Zero Carbon
Transition Plan.
• Monitoring the areas and activities likely to impact Grainger’s
performance and reputation as a responsible business.
• Reviewing and approving responsible business-related policies
and disclosures.
• Monitoring stakeholder engagement on relevant issues.
• Gathering and considering the views of the workforce
throughour Voice of the Colleague.
• Monitoring the development and implementation of the
Company’s ED&I Strategy, plans and commitments.
• Monitoring charitable, social impact and colleague
volunteering activities.
• Supporting the Audit & Risk Committee in reviewing
responsible business-related risks and controls and the
Remuneration Committee in setting responsible business-
related Group objectives and approving the LTIP scoring in
relation to these.
The full terms of reference for the Committee are available
onour website at (corporate.graingerplc.co.uk).
For more information on our sustainability work,
please refer to page 37 onwards.
Membership and attendance table
During the year the Committee met twice. Set out in the
table below are details of the membership and attendance
at these meetings.
Members
Meetings
attended
Carol Hui (Committee Chair) 2
Janette Bell 2
Michael Brodtman 2
Mark Clare 2
Justin Read 2
Simon Fraser was appointed to the Board as Chair
Designate on 1 October 2025, and he also joined the
Responsible Business Committee.
How the committee spent its time
Net zero carbon
ESG progress
People
Community and social
Governance
25%
5%
10%
25%
35%
The existence of the Committee enables the Directors to
allocate more time to discuss strategic sustainability topics.
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Terms of reference
The Committee’s terms of reference are reviewed each
year by the Committee and recommended to the Board for
approval. We assessed our compliance with our terms of
reference during the year and we also updated our terms
of reference to take into account the requirements of the
new Code which applies to Grainger from 1 October 2025.
The Committee’s terms of reference arepublishedon our
website (corporate.graingerplc.co.uk).
Meetings
The Committee’s main work follows a structured programme
of activity agreed at the start of the year. Attendance at the
meetings is set out on page 92.
See below (Key activities) for a non-exhaustive list highlighting
the Committee’s work during the year under review.
Invitations to attend meetings
There is a standing invitation to the Executive Directors,
who attend all of the Committee’s meetings during the year.
The Company Secretary acts as secretary to the Committee and
the CPO, the Head of Sustainability and the Chair of the ED&I
Network will also attend meetings of the Committee topresent
on specific topics.
Sustainability progress
The Committee assessed progress against the Group’s
FY25 sustainability objectives (see page 111 in the Directors’
Remuneration Report) and workstreams in support of the
business’s long-term sustainability commitments (see the
Sustainability Report). The Committee also received regular
reports on stakeholder engagement activities (see our
Stakeholder Engagement reporting which starts at page 79).
Net zero transition
The Committee was pleased to note the successful validation
of Grainger’s new emissions reduction target by the SBTi and
that strong early progress has been made towards target
achievement. An example net zero asset plan was presented
and a new carbon investment tracker was introduced to support
the Committee in monitoring investment in emissions reduction
activities. The Committee was also advised of progress on
the Company’s engagement with policy makers and plans for
future compliance with Minimum Energy Efficiency Standards
which demonstrates effective management of a key potential
transition risk.
• Monitoring ESG objectives including Net Zero Carbon updates
• Review of external sustainability environment including
– Stakeholder engagements
– Regulatory environment
– External assessments and benchmark reporting
– ESG and People Risk review
• Received People Update including:
– Voice of the Colleague session feedback
– ED&I update
• Received the social impact and charity update
March 2025
September 2025
• Received a sustainability presentation from Deutsche Numis
(corporate brokers)
• Received a Net Zero Carbon update
• Considered sustainability related objectives for inclusion in the LTIP
award to be granted in December 2025
• Received People update including:
– Voice of the Colleague session feedback
– ED&I update
• Received the social impact and charity update
• Received Governance reporting including:
– Terms of Reference compliance in 2025 and approved updates
for 2026
– Stakeholder engagements
– External assessments and benchmark reporting
– Year-end reporting preparation
– Sustainability risk review including review of risk deep dive
– Regulatory updates including Minimum Energy Efficiency
Standards update
Key
activities
Key focus areas during 2025
During the year, the Committee received reports from
Management and updates from colleagues across Grainger’s
business on topics including progress towards our Net Zero
Carbon commitments and the successful validation of the new
science-based target by SBTi, community engagement strategy
and ED&I. The Committee also received my reports following the
two roundtable Voice of the Colleague events that I conducted
to gather feedback from colleagues.
The Committee had the opportunity to meet Grainger
colleagues at a site visit to The Copper Works in Cardiff.
The Board also visited Grainger’s London and Newcastle offices
to meet with office-based colleagues as part of our annual
meetings over Tea with the Board.
Our corporate brokers attended one of our meetings to
presenton investor expectations regarding sustainability.
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Community and social impact
The Committee enjoyed hearing about the diverse charitable and
community engagement activities that have taken place across
Grainger’s property portfolio and offices and was particularly
pleased to see record levels of colleagues volunteering their time
to give something back in their local community. An overview
of the social impact generated from Grainger Trust was also
presented and the Committee was briefed on the successful
social impact pilots undertaken across Grainger’s supply chain.
ED&I
On behalf of the Board, the Committee oversees our ED&I
arrangements. ED&I sits at the heart of our People Strategy,
building an inclusive culture that celebrates the unique strengths
each colleague brings. Following the achievement of the leading
external benchmark, the National Equality Standard in 2024,
weremain committed to delivering best practice initiatives
whichenhance our culture.
The ED&I Network delivered a calendar of events and
awarenesssessions which were shaped by colleague feedback
and introduced new topics. Our interactive panel events
delivered a more conversational approach with colleagues
sharing their lived experiences. Wellbeing initiatives took
place where colleagues actively participated, such as
NationalWalking Month.
Following the launch of our first ED&I data questionnaire in
2022, we have since issued it for a fourth year and we now
holddiversity data for 90% of our colleagues.
We received positive feedback from colleagues who previously
participated in our internal Mentoring programme as Mentors
and Mentees. Recognising the value it brings to supporting
colleagues’ professional growth and development, we launched
our fourth cohort.
Voice of the Colleague
As Grainger’s designated Non-Executive Director for Workforce
Engagement, I lead our Voice of the Colleague programme.
During the year, I held two in-person roundtable events, one
in London and one in Newcastle. These were attended by
colleagues in a range of different roles. Our approach is to
empower colleagues to speak up and share their feedback
on our culture at Grainger, what they like best about working
at Grainger and what they would like to see us improve
on. Following the sessions the feedback is provided to the
leadershipteam and actions are put into place. This has included
our approach to cultural awareness, careers at Grainger and
further opportunities for cross team collaboration.
Our CPO delivered a comprehensive update on our colleague
engagement survey and shared detailed analysis of the
results and emerging themes. We have strong colleague
engagement, which is supported by departmental action
plans which are informed and updated by the feedback and
colleague suggestions.
Engagement initiatives which have been introduced include
an Executive Committee Induction to support new joiners and
bringing together ED&I and Wellbeing initiatives which are
delivered by the ED&I Network.
Looking ahead
The Committee’s key activities for 2026 will include:
• further monitoring of the progress of our
sustainability objectives;
• the LTIP carbon metrics and science-based target;
• reviewing the Company’s Net Zero Transition Plan and
associated investment required to deliver it;
• continue to deliver our approach to ED&I; and
• monitoring our social impact across ourcommunity and
charitable programmes.
Carol Hui OBE
Chair of the Responsible Business Committee
19 November 2025
Responsible Business Committee Report continued
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Audit & Risk Committee Report
Dear Shareholders,
I am pleased to present the Audit & Risk Committee
report for FY25.
The Committee’s role in the Group remains critical given
the continued macroeconomic and political uncertainty,
combinedwith significant changes to governance requirements.
Its role includes supporting the Board in risk management,
internal controls and financial reporting. The Committee
members are all independent Non-Executive Directors and in
line with the Code, the Chair of the Board is not a member.
This section of the Report provides an overview of the
significantissues the Committee has considered, and its
assessment of this Report as a whole, including how we have
reviewed the narrative reporting to ensure it is an accurate
reflection of the financial statements.
Terms of reference
Each year, the Committee considers its terms of reference,
takinginto account changes within Grainger and to external
governance requirements, including the Code. During the year,
we reviewed our terms of reference and recommended updates
to the Board, which were approved. This included revising our
name to include reference to our risk related responsibilities.
Our updated terms of reference ensures they align with the
2024 version of the Code which applies to Grainger from
1 October 2025.
We also assessed the Committee’s compliance with our existing
terms of reference and confirmed that we have discharged our
role and responsibilities as set out therein.
Governance
We continue to monitor and review developments in
corporate governance to ensure that our audit and assurance
arrangements continue to operate in line with best practice.
For example, in the year we reviewed the Company’s measures
to ensure compliance with the new “failure to prevent fraud”
offence introduced as part of the Economic Crime and
Transparency Act.
Risk and internal controls
Oversight of the Company’s risk and control framework is a key
responsibility of the Committee and this year we have continued
to ensure that risks are appropriately identified, assessed and
mitigated through regular risk reviews (including deep dives of
specific risks) and reporting on risk and internal controls.
Our principal risks and uncertainties were reviewed during the
year, and our programme of risk deep dives included reviewing
risk appetite statements for the risk under review.
The Company operates with defined processes and risk and
control matrixes which are owned by the relevant business area,
and we received regular reporting on any control issues that have
arisen in addition to the assurance received through the work of
our co-sourced Internal Audit team led by our PwC partner.
A key focus this year has been to oversee the Company’s
development of arrangements to ensure compliance with
the new Code, particularly planning for Provision 29 and the
new material controls declaration requirements which will
apply to Grainger from the reporting year commencing on
1 October 2026.
Membership and attendance table
During the year the Committee met four times. Set out
in the table below are details of the membership and
attendance at these meetings.
Members
Meetings
attended
Justin Read (Committee Chair) 4
Janette Bell 4
Michael Brodtman 4
Carol Hui 4
Simon Fraser was appointed to the Board as Chair
Designate on 1 October 2025, and he also joined the Audit
& Risk Committee. Subject to his election at the 2026
AGM, Simon will take over as Chair of the Board with effect
from close of the AGM and he will retire from the Audit &
Risk Committee.
Further details on our internal controls and risk
management, including our principal risks and
uncertaintiescan be found at page 61.
How the committee spent its time
Financial reporting
Internal control and
Risk management
Audit
Governance
22%
13%
30%
35%
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Audit & Risk Committee Report continued
We have defined what we consider to be the material controls
relevant to Provision 29 and Management have reported on the
development of our attestation and testing regime which will
provide assurance over the operation of those material controls.
This additional assurance regime will develop and evolve during
the next period and ensure that the required declarations can
bemade with confidence in our FY27 reporting.
For further details of the risk management framework,
principalrisks and uncertainties and key mitigations see
pages61 to 69.
Financial statements
One of the Committee’s other key responsibilities which we
carried out during the year is ensuring the Group’s published
financial statements show a true and fair view and are consistent
with accounting and governance requirements.
The going concern and viability statements were reviewed
closely, supported by financial modelling and scenario analysis
and the resilience of the business continues to be evident in this
review. In addition, we have concentrated on the fair, balanced
and understandable reporting requirements for the Report
supported by a number of appropriate papers from the CFO and
his Finance Team, and by the independent work of our Internal
and External Auditors.
We received regular updates on forthcoming changes to
reporting requirements and were pleased to note that the FRC
completed a review of the Company’s 2024 Annual Report
and Accounts and identified no issues requiring a substantive
response. We have reflected on the reviewer’s comments and
made minor changes to our disclosures where appropriate
1
.
External Auditors
KPMG LLP (KPMG) have continued as the Company’s External
Auditor and the team led by Craig Steven-Jennings engages
constructively with Management and the Committee.
The Committee conducts an audit effectiveness review annually,
including reviews of FRC reports on audit firm performance, in
order to gain assurance and has concluded consistently that
KPMG provide an effective audit with an appropriate level of
independence. Accordingly, we are recommending the re-
appointment of KPMG at the 2026 AGM.
I believe that our regular constructive challenge and
engagement with Management, the External Auditor and
the Internal Auditor and their teams, together with the
timely receipt of high-quality reports and information from
them, has enabled the Committee to discharge its duties
andresponsibilities effectively.
Justin Read
Chair of the Audit & Risk Committee
19 November 2025
Significant matters relating to the Group’s 2025
financial statements
The most significant matters considered by the Committee
and discussed with the External Auditor in relation to the
Group’s FY25 financial statements are detailed within
the Independent Auditor’s Report at page 125 and are
summarised in the table below:
Significant matter
Valuation of investment
properties
Overstatement or understatement
of valuation of investment
properties due to the judgemental
nature of inputs to theestimates.
Management override of
controls
Fraud risk related to management
override of controls may occur.
Revenue recognition
(cut-off revenue from the
sale of property)
Overstatement of revenue in year
due to premature recognition of
property sales. It should, however,
be noted that sales of property
involves low levels of judgement.
1. See here for the scope and limitations of the FRC review - www.frc.org.uk/library/supervision/
corporate-reporting-review/scope-and-limitations-of-a-crr-review
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Key responsibilities
The Committee's role and responsibilities include; financial
reporting, narrative reporting, whistleblowing and fraud,
internalcontrol and risk management systems, Internal Audit
andExternal Audit. These are set out in its Termsof Reference
which can be found on our corporate websitecorporate.
graingerplc.co.uk and these include the following matters which
the Board has delegated authority tothe Committee to oversee
and review:
• Group’s financial reporting process, including the
classificationof other adjustments.
• system of internal controls and the management of risks.
• whistleblowing policy, arrangements and reporting.
• internal and external audit process and relationship with
the auditors.
• Company’s process for monitoring compliance with applicable
laws and external regulations including the prevention of
fraud arrangements.
Ultimate responsibility for our financial reporting, compliance
with laws and regulations and risk management rests with the
Board, to which the Committee reports regularly.
The Board has determined that Justin Read has recent
and relevant financial experience as required by the Code.
Please refer to pages 74 and 75 for skills and experience of
the Directors and page 88 for the Nominations Committee
report which includes our reporting on Board and Committee
composition, skills and expertise.
Meetings
The Committee’s main work follows a structured programme
of activity agreed at the start of the year. Attendance at the
meetings is set out at page 95.
Valuations
• Received presentations from the independent external valuers
ofGrainger’s reversionary and market rented assets.
Internal control & risk
• Received Internal Audit reporting including reports on the audits
relating to cyber security and the Company’s BTR assets at The
Condor and The Mint.
Reporting
• Received reports on and considered matters relating to the
2024full year, including:
– the effectiveness of the Company’s internal controls;
– activities relating to the 2024 Code, including preparing for
the coming into effect of Provision 29 (material controls) on
1 October 2026;
– Management’s summary of the Company’s key accounting
positions and judgements;
– Management’s assessment of going concern and viability;
– the External Auditor’s year end audit report;
– the draft Annual Report and Accounts 2024 and the related
announcement (including recommending the drafts to the
Board for approval); and
– Considered KPMG’s independence.
November 2024
February 2025
Internal controls & risk
• Received Internal Audit reports on the new failure to prevent
fraud offence included in ECCTA and audits relating to Block
Management, H&S as well as reporting on progress against the
Internal Audit plan and progress on previous report findings.
• Received reporting on the planning of deep dives of principal risks
and uncertainties during the year.
• Received internal controls report including an update on the
Company’s planning for Provision 29 (material controls).
• Received the post completion review in relation to the BTR asset
at The Mint.
• Reviewed the Company’s whistleblowing policy and reporting in
order to assess its effectiveness on behalf of the Board.
Audit
• Assessed and confirmed to the Board the effectiveness of the
Internal Audit and External Audit arrangements.
• Considered the External Auditor’s plan for the review of the
2025half year results.
Key
activities
May 2025
Valuations
Received presentations from the independent external valuers
of Grainger’s reversionary and market rented assets ahead of the
release of the Company’s half-year results.
Considered and approved a request to the RICS for an exemption
to the valuer rotation rules in relation to the Company’s regulated
tenancy assets, which require specialist valuation.
Reporting
• Reviewed the outcome of the FRC’s review of the 2024 Report.
• Received reports on and considered matters relating to the 2025
half year, including:
– Management's review of accounting policies and any changes
tothe applicable standards;
– going concern review;
– review of the principal risks and uncertainties;
– KPMG’s 2025 half-year report; and
– a review of the draft half year financial statements and the
related announcement (including recommending the drafts to
the Board for approval).
Internal control & risk
• Received Internal Audit reports including in relation to Business
Continuity Planning, audits of the BTR sites at Millet Place and The
Barnum, Block Management and reporting on progress against
theInternal Audit plan.
• Received the post completion reviews in relation to the BTR assets
at The Condor and The Barnum.
• Received reporting on the deep dives of the sustainability/TCFD
principal risk and uncertainties.
• Received the internal controls report which included a review
of the Company’s AI Use Policy as well as an update on the
Whistleblowing Policy to include a route for reporting directly
tothe Senior Independent Director.
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Our risk culture promotes open communication and we have in
place whistleblowing arrangements which include an externally
provided whistleblowing hotline that our colleaguescan use
anonymously if they do not wish to use our other internal
processes for raising concerns. Our whistleblowing policy and
arrangements are reviewed annually.
This year we updated our policy to includereporting to the
Audit & Risk Committee Chair where a matter relates to an
Executive Director.
We will investigate whistleblowing reports and we have
a zero-tolerance policy for any retaliation arising from a
whistleblowing report.
Our whistleblowing arrangements also include training which
is completed by all colleagues plus regular reminders and
awareness campaigns.
Invitations to attend meetings
In accordance with Provision 24 of the Code, the Chair of the
Board is not a member of the Committee although there is a
standing invitation to both the Chair and the Executive Directors
to attend all of the Committee’s meetings during the year.
Simon Fraser is a member of the Committee since his
appointment to the Board on 1 October 2025. Subject to his
election at the 2026 AGM, Simon will take on the role of Chair
ofthe Board at the close of the 2026 AGM. At the same time,
hewill retire from the Committee. This will ensure that we
continue to comply with Provision 24 of the Code.
The Company Secretary acts as secretary to the Committee and
the Director of Group Finance and the Group Financial Controller
together with representatives of the Internal and External
Auditors also attend meetings. Both auditors also meet with the
Non-Executive Directors during the year without the Executive
Directors present. The Company’s property valuers also attend
some of the Committee meetings to explain their methodology,
processes and conclusions directly during the year.
Fair, balanced and understandable
The Committee has reviewed whether this Report (taken as
a whole) is fair, balanced and understandable, and whether it
provides the necessary information to Shareholders to assess
the Group’s position and performance, business model and
strategy. The Committee, and following the recommendation of
the Committee, the Board, were satisfied that, taken as a whole,
theReport is fair, balanced and understandable.
Going concern and financial viability
The Committee reviewed the appropriateness of adopting the
going concern basis of accounting in preparing the full year
financial statements and assessed whether the business was
viable, including a review of principal risks and uncertainties,
in accordance with the requirements of the Code. The Group’s
viability statement is on page 70.
Schedule of fees paid to KPMG
Year ended
30 September 2024
£
Year ended
30 September 2025
£
Statutory audit of Grainger Group 612,725 638,000
Total audit fees 612,725 638,000
Half year review 67,000 68,000
Total non-audit fees 67,000 68,000
Pages 97 and 98 include a non-exhaustive list highlighting the
Committee’s work during the year under review.
Whistleblowing
Our whistleblowing arrangements formpart of our
internal controls.
On behalf of the Board, the Audit & Risk Committee
monitorsourwhistleblowing arrangements ensuring
thatcolleagues are able to raise any matters of concern.
September 2025
Internal control & risk
• Received Internal Audit reports including the audit of the Astley,
reporting on progress against the 2025 Internal Audit plan as well
as approving the 2026 Internal Audit plan.
• Received the annual report on compliance including reporting
relating to training arrangements, ECCTA, tax evasion, data
protection, whistleblowing, modern slavery, anti-bribery and
corruption, fraud and financial crime, and UK MAR.
• Received a risk report which included updates to the principal risks
and uncertainties, the review of emerging and evolving risks as
well as a review of the Company’s risk arrangements against the
Raising Your Game best practice guidance.
• Received an update on the Company’s planning for Provision 29
(material controls).
• Considered the emerging and evolving risks and approved
updatesto the principal risks and uncertainties descriptions.
• Received the post completion review in relation to the BTR asset at
The Astley.
• Reviewed deep dives of the H&S and Supplier principalrisks
and uncertainties.
Reporting
• Received KPMG’s reporting including:
– the 2025 year-end audit and reporting plan and strategy; and
– review of the non-audit fee and work and the assessment of
their independence.
• Considered the 2025 draft going concern and viability
statementsand related analysis.
• Considered KPMG’s audit strategy memorandum and
engagementregarding the audit for the full year 2025.
Governance
• Reviewed the Committee’s compliance with its terms of reference
in 2025.
• Approved updates to the Committee’s terms of reference
effective1 October 2025 and recommended the same to the
Board for approval.
• Approved updates to the Auditor Independence Policy and
recommended the same to the Board for approval.
At the end of each meeting the Committee will consider items for
inclusion in the next scheduled meeting and the Non-Executive
Directors will meet with Internal Auditor and/or External Auditor
without the Executive Directors.
Audit & Risk Committee Report continued
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External Auditor objectivity and independence
The objectivity and independence of the External Auditor are
critical to the integrity of the Group’s audit. During the year, the
Committee reviewed the External Auditor’s own policies and
procedures for safeguarding its objectivity and independence.
On three occasions during the year the Audit Engagement Partner
made representations to the Committee as to the External
Auditor’s independence. This also confirmed that KPMG’s reward
and remuneration structure includes no incentives for the audit
partner to cross-sell non-audit services toaudit clients. KPMG duly
applies the requirement to rotate audit partners every five years.
Craig Steven-Jennings was appointed as Audit Engagement
Partner in 2024 and 2025 is hissecond year as audit partner.
The Committee appraised KPMG’s performance by assessing
its audit plan, the quality and consistency of its team and
reports received and discussions held with the Committee.
The Committee considered the FRC’s Guidance for Audit
Committees and noted the steps taken by KPMG in this regard.
In addition, we received feedback from the Grainger Finance
Team. We also considered the tone of KPMG’s relationship with
the Executive Directors, which we assessed as constructive and
professional yet independent and robust.
The Committee also approved updates to the Company’s
AuditorIndependence Policy which governs how we
ensure wemaintain auditor independence, including the
circumstancesin which the auditor can undertake non-audit
services. This policy substantially restricts the types of non-
audit services that can be rendered and specifies the limited
circumstances in which an engagement can be made and is
available on our website corporate.graingerplc.co.uk.
The non-audit services provided by KPMG were limited to
the half year review and, in approving this appointment, the
Committee applied the policy and were satisfied that the
appointment was in the best interests of the Company and its
stakeholders and that the overall levels of audit-related and
non-audit fees were not of a material level relative to the
incomeof the External Auditor firm as a whole.
External auditor tenure
Following this year’s audit, KPMG will have been the Group’s
auditor for eleven years. A tender process was undertaken
in 2023 which resulted in the re-appointment of KPMG for
a further term which cannot exceed Financial Year 2034.
These arrangements comply with the Competition and Markets
Authority Order on Statutory Audit Services.
The Committee monitors the performance of the External
Auditor annually before making a recommendation to the
Board for the following year’s appointment. We were satisfied
that we should recommend the re-appointment of KPMG to
Shareholders at the 2026 AGM.
Internal controls
On behalf of the Board, the Committee reviews the operation
and effectiveness of Grainger’s internal controls. This internal
controls system is designed to manage risks as far as possible,
acknowledging that no system can eliminate the risk of failure
to achieve business objectives entirely. Neither the Committee
nor the Board identified any significant failings or weaknesses in
the year.
The effectiveness of the internal controls is evaluated by a
combination of review by Grainger’s Executive and Management
Committees and Divisional Boards, as well as the Internal and
External Auditors.
We considered the control deficiency reported by KPMG in
respect of manual journal entries, reviewed compensating
controls the business has in place and concluded that those
compensating controls are appropriate and effective.
Provision 29
During the year the Committee has overseen the Company’s
preparations ahead of the implementation of Provision 29 of the
2024 Code which will require the Board to make a declaration
on the effectiveness of its material controls at the balance
sheet date. The Committee has received regular updates on the
implementation of an attestation programme that will support
the Board’s assessment and declaration. This includes discussion
and the identification of the material controls to which the
declaration will relate.
Internal Audit
PwC is appointed by the Company as Internal Auditor, working
with our in-house Internal Audit resource in a co-sourced model.
Internal Audit focuses on the areas of greatest risk to the
Company. Audits are considered during an annual audit planning
cycle. This is informed by the results of current and previous
audit testing, the Company’s strategy, performance and the risk
management process. Additional audits may be identified during
the year in response to changing priorities and requirements.
The Committee approves the plan and monitors progress.
All Internal Audit findings are graded, appropriate remedial
actions agreed, and progress monitored and reported to
the Committee.
The Internal Audit Team has a direct reporting line to the Chair
of the Committee. We assess the effectiveness of Internal
Audit by reviewing its reports, feedback from the CFO, auditees
and through meetings with the Internal Auditor without
Management present.
The Internal Audit programme for 2025 included reviews of:
• Procurement and contract management
• IT general controls
• Sustainability reporting
• Grainger Trust
• Building Safety Act
• H&S
• The rolling programme of site audits
The Internal Audit plan for 2026 has a particular focus on:
• Compliance with the updated Code
• Controls around supplier H&S compliance
• Acquisitions
• HR processes
• Cyber Penetration testing
• Financial Control
• Lease Renewals processes
Looking ahead
The Committee looks forward to continuing to support the
Board and Company in the coming year, and will continue
to focus on the Company’s reporting, risk management and
assurance activities.
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Directors’ Remuneration Report
This section of the Report includes the Annual Statement,
our proposed Directors’ Remuneration Policy (which will be
submitted to Shareholders for approval at the 2026 AGM),
and the Annual Report on Remuneration.
Annual Statement
Dear Shareholders,
As Chair of the Remuneration Committee, I am pleased
to present the Directors’ Remuneration Report for FY25
together with our proposed Directors’ Remuneration
Policy which we are submitting to Shareholders for
approval at the 2026 AGM.
As in previous years, this section of the Report is divided into
thefollowing three sections:
• The Annual Statement, which summarises the remuneration
outcomes for FY25, the key decisions taken by the
Remuneration Committee during the year;
• The Directors’ Remuneration Policy, which sets out
the proposed remuneration policy for Executive and
Non-Executive Directors and is subject to a binding
shareholder vote at the 2026 AGM; and
• The Annual Report on Remuneration, which describes how
the existing Policy was implemented in FY25 and how the
proposed Policy (which is subject to Shareholder approval)
willbe operated in FY26.
2025 business context
FY25 saw another year of strong growth across key metrics such
as net rental income and EPRA earnings. The management team
delivered an excellent operational performance with occupancy
at 98.1%, like-for-like rental growth at 3.6% with strong customer
retention at 61%.
This strong growth combined with successful delivery and lease
up of our new schemes saw net rental income increase by 12%.
EPRA earnings were also up 12%, as the business continues to
deliver strong compounding growth ensuring good progress
towards the FY29 Earnings guidance of £72m.
It was also another good year for sales with £169m of sales
delivered during the year, demonstrating both the value
and liquidity of our asset base. Despite the challenging
macroeconomic environment the portfolio continues to
demonstrate its resilience with valuations stable and EPRA NTA
resilient at 298p per share.
Adjusted earnings were broadly flat at £91.0m (FY24: £91.6m)
asthe sales profits from our reducing regulated tenancy
businessare replaced with rental income from our pipeline.
The lower sales profits were in line with the smaller and
decreasing size ofthe regulated tenancy portfolio.
The dividend per share also continues its strong growth
trajectory, increasing by 10.1% to 8.31p on a per share basis,
our20th consecutive period of growth.
Management have delivered on the long-term ambition of REIT
conversion during the year. This represents a landmark in the
major transformation of the business from a predominantly
trading focus to a focus on growing recurring rental income.
2025 incentive outcomes
The 2025 annual bonus comprised a combination of PRS net
rental income (35%), adjusted earnings (35%), and strategic
andESG targets (30%). These measures, consistent with
those used in prior years, ensured there remained a continued
focus on improving profit and rental income growth whilst
focusing on key non-financial deliverables (including ESG)
whichunderpinour strategy.
How the committee spent its time
Governance and reporting
Investor communication
Executive share plans
Performance monitoring
and review
Senior management
remuneration and retention
Directors’ Remuneration
Policy implementation
andreview
Wider employee
remuneration and cost
ofliving
Membership and attendance table
During the year the Remuneration Committee met
five times. Set out in the table below are details of the
membership and attendance at these meetings.
Members
Meetings
attended
Janette Bell (Committee Chair) 5
Justin Read 5
Mark Clare 5
Carol Hui 5
Michael Brodtman 5
Simon Fraser was appointed to the Board as Chair
Designate on 1 October 2025, and he also joined the
Remuneration Committee.
12%
10%
25%
12%
18%
8%
15%
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Annual Report and Accounts 2025
Stretching targets were set in the context of a period of
continued macro uncertainty and continued higher inflation
and interest rates. The adjusted earnings targets were higher
than those set for 2024 despite an expected smaller profit
contribution from our diminishing regulated tenancy portfolio.
Adjusted earnings of £91.0m was 7.9% ahead of the
budget setby the Board but below the maximum target.
This outcomewasmarginally lower than last year’s adjusted
earnings (£91.6m)and reflected the lower sales profit
contribution fromour diminishing regulated tenancy portfolio
and the exceptional yearof regulated sales achieved in 2024
(£38.7m salesin 2025 versus £47.9m in 2024).
PRS Net Rental Income of £111.6m was delivered and this was
14% higher than last year (£97.7m). This strong performance
delivered a bonus outcome which was also above target but
below maximum.
The 2025 strategic element covered clear objectives relating
to customer satisfaction, business resilience, funding and
investment, and sustainability. Performance in this area was
ahead of expectations and resulted in an outcome of 78.7%.
Overall, a bonus of 81.4% of maximum was earned by the
Executive Directors. The Committee considered whether the
financial bonus outcome was a fair representation of Company
and Management performance during the year and concluded
that no adjustment was required. In doing so, the Committee
was mindful of the level of customers’ affordability, noting that
like-for-like rental growth across the portfolio moved broadly in
line with national wage inflation and occupancy was at strong
levels of 98.1%. In addition, customer satisfaction as measured
by NPS is +42.
The LTIP award granted to the CEO and CFO on 12 December
2022 will vest on 11 December 2025 based on three
equally weighted performance metrics being relative Total
ShareholderReturn (TSR), Total Property Income Return (TPIR)
and Secured PRS Investment targets over the three years
ended30 September 2025.
The relative TSR measure was not achieved and the TPIR and
Secured PRS Investment targets were met in full resulting in
anoverall vesting of 66.7%.
The Committee believes these bonus and expected LTIP
outcomes are appropriate and reflect the strong operational
performance of the business over the relevant performance
periods. Therefore, no discretion has been applied to the
formulaic outcomes.
Fortunes Dock, Canning Town
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Review of the Directors’ Remuneration Policy (Policy)
During the year the Committee reviewed and consulted on
changes to the Policy ahead of submitting it for Shareholder
approval at the 2026 AGM.
Following its review, the Committee concluded that our existing
approach to Directors’ remuneration remains appropriate with
the following limited amendments:
• the Executive Director bonus potential is increased from
140%to 150% of salary to more closely align it to our sector
and to best practice; and
• the on-target bonus is reduced from 60% of maximum to
50%of maximum which further aligns us with best practice.
These proposed changes are considered broadly neutral
from a cost perspective as while bonus awards for maximum
performance levels will be higher, bonus awards for on-target
will be lower (with the cross-over point being broadly halfway
between on-target and maximum).
There are no other changes to the Policy that was approved
byShareholders in FY23.
Applying the Policy in financial year 2026
Details of the Committee’s proposed implementation of the
new Policy in respect of FY26 are set out below. This is subject to
Shareholder approval of the proposed Policy at the 2026 AGM.
Executive Director base salary levels
Executive Director base salaries will be increased by 3% effective
from 1 January 2026 which is aligned to the workforce average.
We will be increasing the hourly rate for our lowest paid
colleagues from 1 January 2026 which will be above the
3% increase applying to the rest of the workforce.
Annual bonus
Subject to shareholder approval of our new Policy, the annual
bonus potential will be 150% of salary for the CEO and CFO.
For both Directors, 75% of any bonus earned will be payable
incash and 25% deferred into shares.
70% of the bonus will continue to be based on financial
performance and 30% on a number of key strategic and
operational measures based on customer satisfaction,
business resilience, funding and investment, and sustainability
related objectives.
To ensure that the implementation of the new Policy remains
aligned to Grainger’s strategy and our conversion to the REIT
status (which took place on 8 September 2025), the Committee
is making changes to the financial annual bonus measures for
FY26, as follows:
• EPRA earnings (40%) – EPRA earnings will replace Adjusted
Earnings (previously weighted at 35%), and will be largely
driven by Net Rental Income growth which is also a key
performance indicator following our conversion to a REIT; and
• Asset recycling (30%) – Given that EPRA Earnings excludes
profits from the property sales, an asset recycling metric will
operate to incentivise the sale of the remainder of our low
yielding regulated tenancy properties, portfolios and land
to reinvest the capital into our BTR pipeline and new higher-
yielding BTR opportunities. This will replace PRS Net Rental
Income (previously weighted at 35%). It is anticipated that, over
time, the weighting of the asset recycling measure in future
bonus schemes will reduce as the size of our regulated tenancy
portfolio reduces.
The actual targets, and the performance against them, will be
disclosed in the 2026 Directors’ Remuneration Report.
Long Term Incentive Plan
It is expected that LTIP awards will continue to be granted
over shares equal in value of up to 200% of salary for the CEO
and 175% of salary for the CFO with the next award due to be
granted in December 2025.
The Committee has considered carefully the appropriate
measures for the next LTIP cycle in the context of our conversion
into a REIT.
The following measures and weightings will apply to the LTIP
award to be granted in December 2025:
• Absolute Total Accounting Return (TAR) (30%) – Reflecting the
Committee’s desire to reward absolute total returns following
our REIT conversion, absolute TAR, being the percentage
change in EPRA Net Tangible Assets per share plus dividends,
will replace Total Property (Income) Return for 30% of
the award.
• Relative Total Shareholder Return (TSR) (30%) – There is no
change. TSR will continue to be measured against our FTSE
350 sector peers (excluding agencies) with the weighting
unchanged at 30%.
• EBITDA margin (30%) – There is no change. We will continue to
incentivise an increase in the EBITDA Margin, which measures
operational leverage as it combines the benefits of growing
net rents with the need for central cost efficiency, with the
weighting unchanged at 30%.
• Sustainability – Environmental (10%) – We will include two
metrics that align to our SBTi validated targets: (a) Scope 1
and2 absolute reduction; and (b) Scope 3 intensity reduction.
The Committee believes the above mix of LTIP measures will
provide a robust assessment of performance over the next
three year period and ensures long term strategic alignment.
Further details of the LTIP targets are set out in the Annual
Report on Remuneration.
As well as the usual advisory vote on the Directors’
Remuneration Report, there will also be a binding Shareholder
vote on the proposed new Policy at the 2026 AGM and a
resolution to approve the LTIP rules which are due for renewal
ahead of their 10-year expiry in 2027. In line with the guidance
published by The Investment Association, the new LTIP rules will
include a single 10% in 10 years’ dilution limit to provide greater
flexibility in extending share plan participation across the Group.
Further details will also be included in our Notice of AGM.
We look forward to your support on these resolutions.
Janette Bell
Chair of the Remuneration Committee
19 November 2025
Directors’ Remuneration Report continued
102
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Annual Report and Accounts 2025
This part of the Report sets out the Directors’ Remuneration Policy (Policy) which, subject to Shareholder approval at the 2026
AGM, will take binding effect from the date of that meeting and will be in place for the next three-year period unless a replacement
Policy is presented to Shareholders before then.
Subject to approval by Shareholders, all payments to Directors during the Policy period will be consistent with the approved Policy.
The key differences between the existing Policy which was approved by Shareholders in 2023 and the proposed new Policy is the
increase in annual bonus opportunity from 140% to 150% of base salary and the inclusion of an ‘on-target’ payout of 50% of
maximum bonus opportunity.
The following table summarises the main elements of the proposed Policy as it applies to the Executive Directors, the key features
of each element, their purpose and linkage to our strategy.
Details of the remuneration arrangements for the Non-Executive Directors are set out on page 109.
Base salary
Purpose and link
tostrategy
To enable the recruitment and retention of individuals of the necessary calibre to execute the Company’s
business strategy.
Operation
Reviewed annually and typically effective from 1 January. Changes to salary levels will take into account the:
• role, experience, responsibilities and personal performance;
• average change in total workforce salary;
• total organisational salary budgets; and
• Company performance and other economic or market conditions.
Salaries are benchmarked periodically and are set by reference to companies of a similar size and complexity.
Opportunity
Salaries will be eligible for increases during the three-year period that the Policy operates.
During this time, salaries may be increased each year (in percentage of salary terms) and will take into account increases
granted to the wider workforce.
Increases beyond those granted to the wider workforce (in percentage of salary terms) may be awarded in certain
circumstances such as where there is a change in responsibility, experience or a significant increase in the scale of the
roleand/or size, value and/or complexity of the Company.
Where new joiners or recent promotions have been placed on a below market rate of pay initially, a series of increases
above those granted to the wider workforce (in percentage of salary terms) may be given over the following few years
subject to individual performance and development in the role.
Framework to
assess performance
The Committee considers individual salaries at the appropriate Committee meeting each year after having due regard
tothe factors noted in operating the Policy.
Benefits
Purpose and link
tostrategy
To aid recruitment and retention of high-quality executives.
Operation
Executive Directors receive a benefits package which includes a car allowance, private medical insurance, life assurance,
illhealth income protection, travel insurance and health check-up.
Other ancillary benefits (including relocation expenses) may be offered, as required.
Opportunity
There is no maximum as the value of benefits may vary from year-to-year depending on the cost to the Company from
third-party providers.
Framework to
assess performance
N/A
Pension
Purpose and link
tostrategy
To aid recruitment and retention of high-quality executives and enable long-term savings through pension provision.
Operation
The Company may contribute directly into an occupational pension scheme (an Executive Director’s personal pension)
orpay a salary supplement in lieu of pension. If appropriate, a salary sacrifice arrangement can apply.
Opportunity
Pension contributions shall be no higher than the general workforce rate which is currently 10% of salary.
Framework to
assess performance
N/A
Directors’ Remuneration Policy
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Financial statementsGover nanceStrategic report
Annual bonus
Purpose and link
tostrategy
To reward and incentivise the achievement of annual targets linked to the delivery of the Company’s strategic priorities
for the year.
Operation
Bonus measures and targets are reviewed annually and any payout is determined by the Committee after the end of the
financial year, based on performance against targets set for the financial period.
Up to 75% of any bonus that becomes payable is normally paid in cash with the remainder deferred into shares for three
years. Deferred bonus share awards typically vest subject to continued employment.
Individuals may be able to receive a dividend equivalent payment on deferred bonus shares at the time of vesting equal to
the value of dividends which would have accrued during the vesting period. The dividend equivalent payment may assume
the reinvestment of dividends on a cumulative basis.
Opportunity
150% of salary.
Framework to
assess performance
Bonus performance measures are set annually and will be predominantly based on challenging financial targets set in
line with the Group’s strategic priorities and tailored to each individual role as appropriate, for example, targets relating
toadjusted earnings. For a portion of the bonus, strategic and operational and/or sustainability objectives may operate.
The Committee has the discretion to vary the performance measures used from year to year depending on the economic
conditions and strategic priorities at the start of each year. Details of the performance measures used for the current
year and targets set for the year under review and performance against them will be provided in the Annual Report
on Remuneration.
For financial targets, and where practicable in respect of strategic and operational targets, bonus starts to accrue once
the threshold target is met rising on a graduated scale to 100% for stretch performance. Typically, on-target performance
will deliver a bonus of 50% of the maximum opportunity.
The Committee may adjust bonus outcomes, based on the application of the bonus formula set at the start of the
relevant year, if it considers the quantum to be inconsistent with the performance of the Company, business or individual
during the year. For the avoidance of doubt this can be to zero and bonuses may not exceed the maximum levels detailed
above. Any use of such discretion would be detailed in the Annual Report on Remuneration.
The Committee has discretion to apply malus or clawback to cash bonus payments and/or deferred bonus share awards
(see Malus and clawback section, opposite, for details).
Long Term Incentive Plan (LTIP)
Purpose and link
tostrategy
To incentivise and reward the delivery of strategic priorities and sustained performance over the longer term.
To provide greater alignment with Shareholders’ interests.
Operation
The LTIP provides for awards of free shares (i.e. either conditional shares or nil-cost options) normally on an annual
basis which are eligible to vest after three years subject to continued service and the achievement of challenging
performance conditions.
Vested awards are subject to a two-year post-vesting holding period. In exceptional circumstances such as due to
regulatory or legal reasons, vested awards may also be settled in cash.
Dividend equivalent payments may be made on vested LTIP awards and may assume the reinvestment of dividends,
on a cumulative basis.
Opportunity
• 200% of salary for the Chief Executive; and
• 175% of basic salary for other Executive Directors.
Framework to
assess performance
The Committee may set such performance conditions on LTIP awards as it considers appropriate (whether financial
or non-financial (including sustainability). The choice of measures and their weightings will be determined prior to
each grant.
25% of awards will vest for threshold performance with full vesting taking place for equalling, or exceeding, the maximum
performance targets. No awards vest for performance below threshold. A graduated vesting scale operates between
threshold and maximum performance levels.
The Committee may adjust LTIP vesting outcomes, based on the result of testing the performance condition, if it
considers the quantum to be inconsistent with the performance of the Company, business or individual during the
three-year performance period. For the avoidance of doubt, this can be to zero. Any use of such discretion would be
detailed in the Annual Report on Remuneration.
The Committee has discretion to apply malus or clawback to LTIP awards (see Malus and clawback section, opposite,
for details).
Directors’ Remuneration Report continued
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All-employee share schemes
Purpose and link
tostrategy
To encourage employees to make a long-term investment in the Company’s shares.
Operation
All employees, including the Executive Directors, are eligible to participate on the same terms in the Company’s Save
As You Earn (SAYE) scheme and Share Incentive Plan (SIP), both of which are approved by HMRC and subject to the
limits prescribed.
Opportunity
SAYE: Participants may invest up to £500 per month (or such other amount as may be permitted by HMRC from time to
time) for three or five-year periods in order to purchase shares at the end of the contractual period at a discount of up to
20% to the market price of the shares at the commencement of the saving period.
SIP: Participants can invest up to £150 per month (or such other amount as may be permitted by HMRC from time to
time) in shares in the Company, and the Company may then, subject to certain limits, double that investment.
The Company may also allocate free shares annually on a percentage of basic pay, subject to a maximum of £3,600
(or such other amount as may be permitted by HMRC from time to time).
Dividend payments on SIP shares are reinvested and must be held in trust for three years.
Framework to
assess performance
N/A
Shareholding guidelines
Under the shareholding guidelines, Executive Directors are expected to build up over time a shareholding equivalent to 200% of
their base salary. Executive Directors are required to retain all the after-tax number of vested LTIP and deferred bonus awards to
satisfy the guidelines. In addition, the Committee’s general expectation is that the guidelines will be met within five years of its
introduction, although the Committee reserves the right to take into account vesting levels and personal circumstances when
assessing progress against the guidelines.
A post cessation shareholding guideline operates. Executive Directors are expected to retain the lower of actual shares held and
shares equal to 200% of salary for two years post cessation in respect of shares which vest from grants of deferred bonus and LTIP
awards made since the approval of the Policy presented at the 2020 AGM. Buyout awards and own shares purchased are excluded
from this.
Notes to the future Policy for Executive Directors
Malus and clawback
Malus and clawback provisions apply to the Executive Directors’ incentive arrangements under the Grainger malus and clawback
policy, as amended from time to time.
Under the malus and clawback policy, the Committee may, at its discretion, reduce the size of any future bonus or share award
(potentially to nil), reduce the size of any granted but unvested share award (potentially to nil), or to require an Executive Director
tomake a payment to the Company.
The malus and clawback provisions may be invoked to the Executive Directors’ incentive arrangements in the event of:
• a misstatement of the Company’s results;
• a miscalculation or an assessment of any performance conditions that was based on an error or on inaccurate or misleading
information or assumptions;
• serious misconduct;
• the Company becomes insolvent or is put into administration;
• reputational damage to a Group company*; or
• a serious health and safety event*.
* In these circumstances the Committee will also consider the extent to which the relevant individual was involved (directly or through oversight) in such events.
The malus and clawback provisions may be invoked for three years from: (i) the date of payment of any cash bonus; (ii) the grant of
any deferred bonus share award; or (iii) the vesting of a LTIP award. These periods may be extended by the Committee for a further
two years to allow an investigation to take place.
Subject to compliance with the Directors’ Remuneration Policy, the Committee may amend the Grainger malus and clawback
policyfrom time to time where it considers that to be appropriate and in line with wider practice elsewhere.
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Choice of performance measures and approach to target setting
The annual bonus measures are selected to provide direct alignment with the short-term operational targets of the Company.
Care is taken to ensure that the short-term performance measures are always supportive of the long-term objectives. This is
especially important in a business which has a long-term investment horizon. The LTIP performance measures are selected
to ensure that the Executive Directors are encouraged in, and appropriately rewarded for, delivering against the Company’s
key long-term strategic goals so as to ensure a clear and transparent alignment of interests between Executive Directors and
Shareholders and the generation of long-term sustainable returns. The performance metrics that are used for annual bonus and
long-term incentive plans are normally a sub-set of the Group’s KPIs.
Discretion
The Committee operates the annual bonus plan, LTIP and all-employee plans according to their respective rules and in accordance
with the relevant UK Listing Rules and HMRC rules consistent with market practice. The Committee retains discretion, within
the confines and opportunity detailed above, in a number of respects with the operation and administration of these plans.
These include:
• the individual(s) participating in the plans;
• the timing of grant of award and/or payment;
• the size of an award and/or payment;
• the determination of vesting;
• dealing with a change of control (e.g. the timing of testing performance targets) or restructuring;
• determination of a ‘good/bad leaver’ for incentive plan purposes based on the rules of each plan and the appropriate
treatment chosen;
• adjustments required in certain circumstances (e.g. rights issues, corporate restructuring and special dividends);
• the annual review of performance conditions for the annual bonus plan and LTIP; and
• the ability to adjust incentive outcomes, based on the result of testing the performance condition, if it considers the quantum
tobe inconsistent with the performance of the Company, business or individual.
The Committee also retains the ability to adjust the targets, and/or set different measures and alter weightings for the annual
bonus plan and to adjust targets for the LTIP if events occur (e.g. material divestment of a Group business or a change in strategic
direction) which cause it to determine that the conditions are no longer appropriate and the amendment is required so that the
conditions achieve their originalpurpose and are not materially less difficult to satisfy.
Peer group
In assessing Grainger’s pay practices, including structure, quantum and performance metrics and remuneration policies, the
Committee’s primary reference point are the constituents of the FTSE 350 Real Estate companies (excluding agencies), which
comprised: British Land Company, Big Yellow Group, Derwent London, Great Portland Estates, Hammerson, Harworth Group,
LandSecurities Group, London Metric Property, Primary Health Properties, Safestore Holdings, SEGRO, Shaftesbury Capital,
SiriusReal Estate Limited , Supermarket REIT, Target Healthcare, The Unite Group, Warehouse REIT and Workspace Group.
Reward scenarios for Executive Directors
The Company’s Policy results in a significant proportion of remuneration received by Executive Directors being dependent on
Company performance. The composition and total value of the Executive Directors’ remuneration package for the financial year
2025/26 at minimum, on-target, maximum performance and maximum with share price growth scenarios are set out in the
charts below.
Min Target Max Max with
growth
£713
100%
£4,000
£000
£3,500
£3,000
£2,500
£2,000
£1,500
£1,000
£500
£0
36%
24%
40%
24% 20%
32% 27%
44% 36%
17%
£1,973
Chief Executive Officer
£2,918
£3,548
Min Target Max Max with
growth
£539
100%
£4,000
£3,500
£3,000
£2,500
£2,000
£1,500
£1,000
£500
£0
38%
25%
37%
26% 22%
34% 29%
40% 32%
17%
£1,415
Chief Financial Officer
£2,083
£2,498
£000
Directors’ Remuneration Report continued
Total fixed remuneration  LTIP
Annual bonus Share price growth
Total fixed remuneration  LTIP
Annual bonus Share price growth
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Annual Report and Accounts 2025
Assumptions used in determining the level of payout under given scenarios are as follows:
• Minimum = base salary at 1 January 2026, estimated FY26 benefits and pension contribution of 10% of salary (fixed pay).
• On-target = 50% payable of the 2026 annual bonus opportunity payable and 62.5% vesting of the 2026 LTIP awards vesting.
• Maximum = 100% payable of the 2026 annual bonus (based on a maximum of 150% of salary for the CEO and CFO) and 100%
ofthe 2026 LTIP awards vesting (based on a face value of 200% of salary for the CEO and 175% of salary for the CFO).
• Maximum with share price growth = as per maximum but with a 50% share price growth assumed on LTIP awards.
How the Policy relates to the wider Group
The Policy provides an overview of the structure that operates for the Executive Directors and Senior Management population.
However, it is highlighted that there are differences in quantum within this determined by the size and scope of individual positions.
The Committee is made aware of pay structures across the Group when setting the Policy. The key difference is that, overall, the
Policy for Executive Directors is more heavily weighted towards variable pay than for other employees.
Base salaries are operated under the same policy as detailed in the Policy table with any comparator groups used as a reference
point. The Committee considers the general basic salary increase for the broader Company (if any) when determining the annual
salary review for the Executive Directors.
The LTIP is operated at the most senior tiers of management, as this arrangement is reserved for those anticipated as having the
greatest potential to influence Company-level performance.
However, the Committee believes in wider employee share ownership and promotes this through the operation of the HMRC tax
approved all-employee share schemes which are open to all UK employees.
How the views of employees are taken into account
The Committee takes due account of remuneration structures elsewhere in the Group when setting pay for the Executive
Directors. For example, consideration is given to the overall salary increase budget and the incentive structures that operate across
the Company.
The CEO regularly holds ‘all-employee’ conference calls to give colleagues an overview of Company strategy and provide colleagues
with the opportunity to ask any questions. In addition, the CEO and Board members regularly visit offices and meet with our
people to gauge overall opinions. Carol Hui, the designated Non-Executive Director for workforce engagement, holds independent
roundtable meetings to listen directly to employee views. See Responsible Business Committee Report for further details at
page 92.
The CEO has regular meetings with our people including breakfast meetings with new employees. Annual employee engagement
surveys and half year pulse surveys are also carried out, the results of which are presented to the Board by the CPO.
In addition, the Board’s Responsible Business Committee provides oversight of the delivery of the Company’s Sustainability strategy
and its ED&I plans and reports on the same to the Board.
How the views of Shareholders are taken into account
The Committee considers Shareholder feedback received in relation to the AGM each year and guidance from Shareholder
representative bodies more generally. This feedback, plus any additional feedback received during any meetings held with
Shareholders from time to time, is then considered as part of the Committee’s on-going review of the Policy (as has been the case in
relation to the proposed Policy changes this year). In respect of the 2025 AGM, feedback received was positive and is reflected in the
voting outcome.
Major Shareholders and the main representative bodies were consulted on the proposed changes to the Remuneration Policy
and its implementation for FY26 and it was clear based on the feedback received that there were strong levels of support for the
proposals. No changes were required to the original proposals.
Approach to recruitment remuneration
When setting the remuneration package for a new Executive Director, the Committee will apply the same principles and implement
the Policy as set out in the Remuneration Policy table.
Base salary will be set at a level appropriate to the role and the experience of the Executive Director being appointed. In certain
cases, this may include setting a salary below the market rate but with an agreement on future increases up to the market
rate, in line with increased experience and/or responsibilities, subject to good performance, where it is considered appropriate.
Pension provision, in percentage of salary terms, will be aligned to the general workforce level.
The maximum level of variable remuneration which may be granted (excluding buyout awards as referred to below) is an annual
bonus of 150% of salary and LTIP award of 200% of salary (as per the limits in the Policy table).
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Financial statementsGover nanceStrategic report
In relation to external appointments, the Committee may offer compensation that it considers appropriate to take account of
awards and benefits that will or may be forfeited on resignation from a previous position. Such compensation would reflect the
performance requirements, timing and such other specific matters as the Committee considers relevant. This may take the form
of cash and/or share awards granted under existing schemes or under provision 9.3.2(2) of the UK Listing Rules. The Policy states
that the maximum payment under any such arrangements (which may be in addition to the normal variable remuneration) should
be no more than the Committee considers is required to provide reasonable compensation to the incoming Executive Director.
If the Executive Director will be required to relocate in order to take up the position, it is the Company’s policy to allow reasonable
relocation, travel and subsistence payments. Any such payments will be at the discretion of the Committee.
In the case of an employee who is promoted to the position of Executive Director, the Policy set out above would apply from
the date of promotion but there would be no retrospective application of the Policy in relation to existing incentive awards or
remuneration arrangements. Accordingly, prevailing elements of the remuneration package for an existing employee would be
honoured and form part of the on-going remuneration of the employee. These would be disclosed to Shareholders in the following
year’s Annual Report on Remuneration.
Non-Executive Director appointments will be through letters of appointment. Non-Executive Directors’ base fees, including those
of the Chair, will be set at a competitive market level, reflecting experience, responsibility and time commitment. Additional fees
are payable for the chairmanship of the Audit & Risk, Remuneration and Responsible Business Committees and for the additional
responsibilities of the Senior Independent Director and the Non-Executive Director designated for workforce engagement.
Directors’ service contracts and provision on payment for loss of office
Executive Directors’ service contracts are terminable by the Company on up to one year’s notice and by the Director on at least six
months’ notice.
If an Executive Director’s employment is to be terminated, the Committee’s policy in respect of the contract of employment,
in the absence of a breach of the service agreement by the Executive Director, is to agree a termination payment based on the
value of base salary and contractual pension amounts and benefits that would have accrued to the Executive Director during the
contractual notice period. The policy is that, as is considered appropriate at the time, the departing Executive Director may work,
or be placed on garden leave, for all or part of their notice period, or receive a payment in lieu of notice in accordance with the
service agreement. The Committee will also seek to apply the principle of mitigation where possible so as to reduce any termination
payment to a leaving Executive Director, having had regard to the circumstances.
In addition, the Committee may also make payments in relation to any statutory entitlements, to settle any claim against the
Company (e.g. in relation to breach of statutory employment rights or wrongful dismissal) or make a modest provision in respect of
legal costs or outplacement fees.
The Company has an enhanced redundancy policy allowing redundancy amounts to be calculated by reference to actual basic
weekly salary and the policy may be extended to Executive Directors where relevant.
With regard to annual bonus for a departing Executive Director, if employment ends by reason of redundancy, retirement with the
agreement of the Company, ill health or disability or death, or any other reason as determined by the Committee (i.e. the individual
is a ‘good leaver’), the Executive Director may be considered for a bonus payment. If the termination is for any other reason, any
entitlement to bonus would normally lapse. Under any circumstance, it is the Committee’s policy to ensure that any bonus payment
reflects the departing Executive Director’s performance and behaviour towards the Company.
Any bonus payment will normally be delayed until the performance conditions have been determined for the relevant period and be
subject to a pro rata reduction for the portion of the relevant bonus year that the individual was employed.
The treatment for share-based incentives granted to an Executive Director will be determined based on the relevant plan rules.
The default treatment will be for outstanding awards to lapse on cessation of employment. In relation to awards granted under the
LTIP, in certain prescribed circumstances, such as death, injury or disability, redundancy, transfer or sale of the employing company,
retirement with the Company’s agreement or other circumstances at the discretion of the Committee (reflecting the circumstances
that prevail at the time), ‘good leaver’ status may be applied.
If treated as a good leaver, awards will be eligible to vest subject to performance conditions, which will be measured over the
original performance period (unless the Committee elected to test performance to the date of cessation of employment), and be
subject to a pro rata reduction (unless the Committee considered it inappropriate to do so) to reflect the proportion of the vesting
period actually served. Where awards vest within two years of cessation, the post vesting holding period will continue to apply until
the second anniversary of cessation. There will be no holding period for awards vesting more than two years after cessation.
Any LTIP awards which vest pre-cessation but which are still subject to the two-year holding period will need to be retained by the
individual (either on a post-tax basis or as unexercised awards) post cessation, until the relevant two-year holding period has expired.
With regard to the deferral of annual bonus, deferred share bonus awards will normally lapse on cessation of employment other
than where an Executive Director is a ‘good leaver’ (as detailed above) with awards then vesting on the normal vesting date.
It is the Company’s policy to honour pre-existing award commitments in accordance with their terms.
Directors’ Remuneration Report continued
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Where the Executive Director participates in one or more of the Company’s HMRC approved share plans, awards may vest or be
exercisable on or following termination of employment in certain good leaver circumstances, where permissible, in accordance with
the rules of the plan and relevant legislation.
External appointments
Executive Directors are permitted to accept external non-executive appointments with the prior approval of the Board. It is normal
practice for Executive Directors to retain fees provided for non-executive appointments.
Non-Executive Directors’ letters of appointment
The Chair and Non-Executive Directors have letters of appointment for an initial fixed term of three years subject to earlier
termination by either party on written notice. In each case, this term can be extended by mutual agreement. Non-Executive
Directors have no entitlement to contractual termination payments. The dates of the initial appointments of the Non-Executive
Directors are set out in the Annual Report on Remuneration.
Non-Executive Directors’ fees
The policy on Non-Executive Directors’ fees is set out below:
Non-Executive Directors
Purpose and link
tostrategy
To provide a competitive fee which will attract those high-calibre individuals who, through their experience, can further
the interests of the Group through their stewardship and contribution to strategic development.
Operation
The fees for Non-Executive Directors (including the Chair) are typically reviewed every second year or more frequently
if required.
Fee levels are set by reference to the expected time commitment and responsibility and are periodically benchmarked
against relevant market comparators as appropriate, reflecting the size and nature of the role.
The Chair and Non-Executive Directors are paid an annual fee which is paid at least monthly and do not participate in any
of the Company’s incentive arrangements or receive any pension provision.
The Non-Executive Directors receive a basic Board fee, with additional fees payable for chairmanship of the Company’s
key Committees and for performing the Senior Independent Director role.
All Non-Executive Directors are reimbursed for travel and related business expenses reasonably incurred in performing
their duties.
The Committee recommends the remuneration of the Chairman to the Board.
The Chair’s fee is determined by the Committee (during which the Chair has no part in discussions) and recommended by
it to the Board. The Non-Executive Directors’ fees are determined by the Chair and the Executive Directors.
Opportunity
Fee levels will be eligible for increases during the period that the Remuneration Policy operates to ensure that they
continue to appropriately recognise the time commitment of the role, increases to fee levels for Non-Executive Directors
in general and fee levels in companies of a similar size and complexity.
Framework to
assess performance
N/A
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Financial statementsGover nanceStrategic report
The Annual Report on Remuneration, details how our existing Policy was implemented during the financial year ended
30 September 2025. This section of the Report has been prepared in accordance with the provisions of the Companies Act 2006 and
related Regulations.
An advisory resolution to approve the Annual Statement and the Annual Report on Remuneration will be put to Shareholders at the
2026 AGM.
1. Single total figure of remuneration for each Director
The remuneration of Directors showing the breakdown between components with comparative figures for 2024 is set out below.
This table and the details set out in Notes 1 to 6 on pages 110 to 115 to of this Report have been audited by KPMG.
2025
Salary
and fees
1
£’000
Taxable
benefits
2
£’000
Share
incentive
plan
£’000
Annual
bonus
3
£’000
LTIP
awards
4
£’000
Pension
benefits
5
£’000
Total
£’000
Total Fixed
Remuneration
6
£’000
Total Variable
Remuneration
7
£’000
Executive Directors
Helen Gordon 607 20 2 691 582 61 1,963 690 1,273
Rob Hudson 473 17 2 539 416 47 1,494 539 955
1,080 37 4 1,230 998 108 3,457 1,229 2,228
Non-Executive Directors
8
Mark Clare 221 – – – – – 221 221 –
Justin Read 78 – – – – – 78 78 –
Janette Bell 68 – – – – – 68 68 –
Carol Hui 68 – – – – – 68 68 –
Michael Brodtman 57 – – – – – 57 57 –
492 – – – – – 492 492 –
Totals 1,572 37 4 1,230 998 108 3,949 1,721 2,228
1. From 1 January 2025, the CEO’s and CFO’s salaries were increased by 3% to £611,685 and £477,203 respectively.
2. Taxable benefits comprised of a car allowance and private medical insurance.
3. 25% of the bonus is deferred into shares for three years.
4. See Note 3 on page 112 for information in respect of the LTIP awards that are due to vest in December 2025.
5. The amounts shown under pension benefits represent a salary supplement paid to the Directors in lieu of Company pension contributions.
6. Comprises the aggregate of total salary and fees, taxable benefits, share incentive plan awards and pension benefits.
7. Comprises the aggregate of annual bonus and LTIP awards.
8. The fees for Non-Executive Directors reflect payments in relation to any chairmanship roles (as applicable during the year under review or the preceding year and pro-rated where appropriate).
See Note 13 on page 118 in relation to the fees as at 1 January 2025 and 1 January 2026.
2024
Salary
and fees
1
£’000
Taxable
benefits
2
£’000
Share
incentive
plan
£’000
Annual
bonus
3
£’000
LTIP
awards
4
£’000
Pension
benefits
5
£’000
Total
£’000
Total Fixed
Remuneration
6
£’000
Total Variable
Remuneration
7
£’000
Executive Directors
Helen Gordon 583 16 2 808 359 58 1,826 659 1,167
Rob Hudson 456 16 2 631 257 46 1,408 519 889
1,039 32 4 1,439 616 104 3,234 1,178 2,056
Non-Executive Directors
8
Mark Clare 193 – – – – – 193 193 –
Justin Read 75 – – – – – 75 75 –
Janette Bell 66 – – – – – 66 66 –
Carol Hui 66 – – – – – 66 66 –
Michael Brodtman 55 – – – – – 55 55 –
455 – – – – – 455 455 –
Totals 1,494 32 4 1,439 616 104 3,689 1,633 2,056
1. The CEO’s salary increased by 6% (to £591,000) and the CFO’s salary by 5% (to £461,066) from 1 January 2024.
2. Taxable benefits comprised of a car allowance and private medical insurance.
3. 25% of the bonus is deferred into shares for three years.
4. The vesting values of the LTIP awards in last year’s report were estimated as the TSR performance period had not ended and the share price on the vesting date was not known. While the actual
vesting percentage was consistent with the estimate disclosed in last year’s report, these values have been updated to reflect the share price on the date of vesting being 226.5p and the value of
accrued dividends. Further details are provided in Note 3.
5. The amounts shown under pension benefits represent a salary supplement paid to the Directors in lieu of Company pension contributions.
6. Comprises the aggregate of total salary and fees, taxable benefits, share incentive plan awards and pension benefits.
7. Comprises the aggregate of annual bonus and LTIP awards.
8. The fees for Non-Executive Directors reflect payments in relation to any chairmanship roles (as applicable during the year under review or the preceding year and pro-rated where appropriate).
Annual Report on Remuneration
110
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Annual Report and Accounts 2025
2. Annual bonus awards – performance assessment for 2025
In determining the bonus outcomes for 2025, the Committee took into account the Company’s financial performance and
achievements against key strategic and operational objectives established at the beginning of the year.
70% of the bonus was based on adjusted earnings and PRS Net Rental Income (NRI) performance (with equal weightings) with the
remainder based on achievement against strategic objectives. The targets applying to each financial measure and performance
against the targets for 2025 are set out in the table below.
Financial performance (70% of the 2025 annual bonus opportunity)
Measure Weighting
Threshold
(0% out-turn)
Target
(60% out-turn)
Maximum
(100% out-turn)
2025
performance
Out-turn (% of
max element)
Adjusted earnings 35% £75.9m £84.3m £92.7m £91.0m 91.9%
PRS NRI 35% £104.3m £109.8m £115.3m £111.6m 73.3%
The 2025 annual bonus comprised a combination of PRS NRI (35%), adjusted earnings (35%), and strategic targets (30%).
These measures, consistent with those used in prior years, ensured there remained a continued focus on improving profit andrental
income growth whilst focusing on key non-financial deliverables (including sustainability) which underpin our strategy.
The key components of adjusted earnings are sales from our regulated portfolio and growth in NRI. As our regulated tenancy
portfolio reduces over time (and given the exceptional level of sales in the previous year) the expected contribution from sales in
2025 was forecast to be lower, partly offset by higher NRI.
Stretching targets were set against this backdrop in the context of a period of continued macro uncertainty. Outturn for the year
saw 12% growth in net rental income (£123.6m), with PRS net rents of £111.6m which represents 73.3% of the maximum target.
Adjusted earnings for the year were £91.0m, which represents 91.9% of the maximum target.
This strong performance was achieved through the in-house teams’ focus on occupancy, speed of lease up and cost efficiency as
well as the delivery of a large and diverse sales program which was executed despite a challenging environment.
The Committee considered whether the financial bonus outcome was a fair representation of Company and management
performance during the year and concluded that no adjustment was required. When combined with performance against the
strategic targets, annual bonus was calculated at 81.4% of the maximum available.
Non-financial performance (30% of the 2025 annual bonus opportunity)
In respect of the strategic targets set for the Executive Directors, the targets and Committee’s assessment of performance against
the targets was as follows.
Objective Measure Performance assessment
1. Customer
Satisfaction
(6%)
Maintain NPS score at +48 and improve PRS non-amenitised by 20% = 2% Achieved in part (1%) with NPS score at
+42 and PRS South score improved
Successful roll-out of new customer facing website, increasing the number of qualified
leads from 19% to 25% and improving conversion rate from 5% to 8% = 2%
Achieved in full (2%) with number of
qualified leads over 25% and conversion
rate at 7.8%
Improve complaints process (85% of all complaints resolved within 14 days) = 2% Achieved in full (2%). Over 85% of
complaints resolved within 14 days.
2. Business
Resilience
(8%)
Successful delivery of REIT ready for October 2025 conversion = 1% Achieved in full (1%) with conversion
achieved on 8 September 2025
Bring three viable opportunities of existing portfolios that would deliver a material
step change for the Company to the Board for approval, subject to financial and tax
due diligence = 3%
Achieved in full (3%)
Reposition business processes to deal with the changes from rental reform and
operate effectively = 2%
Achieved in full as far as able from the
draft Renters Rights Bill (2%)
Review CONNECT to establish if a reduction can be made to reduce existing running
costs. Design CONNECT 2.0 to deliver further cost efficiencies across the business and
service improvements going forward = 2%
Achieved in full (2%)
3. Funding and
Investment
(9%)
Prepare sales plan to deliver £170m to £250m of sales to achieve balance sheet
resilience (graduating scale) = 7%
Being able to start one TfL project. Put all consents in place (e.g. planning, building
consent). Subject to TfL approval = 2%
Achieved in part – delivered £196m
*
of
sales (3.6%) and Bollo site agreed subject
to TfL and BSR approvals (1%)
4. Community,
Environment,
Governance
and People
(inc. Health
and Safety)
(7%)
Implement the next phase of fire safety remediation work to achieve progress across
all schemes measured as a % of completion versus the full programme. All schemes to
be on site excluding those needing planning consent = 2%
Achieved in part with the remaining
schemes scheduled for completion (1%)
Achieve safety climate survey of 3.77 (ahead of industry benchmarks) = 1% Achieved in full (1%)
Colleague engagement survey to achieve at least 1* all company engagement score.
All departments to achieve 1* = 1%
Achieved in full (1%). Achieved overall 2*
and all departments 1* or above
H&S Restructure - successfully onboard Director of H&S. Restructure team and
embed new processes between Operations and Compliance providing the Board with
confidence on quality of H&S function = 2%
Achieved in full (2%)
To have completed the SBTi validation process by the end of the financial year = 1% Achieved in full (1%). Validation achieved
during the year
* £169m plus £27m unconditionally exchanged.
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Financial statementsGover nanceStrategic report
Pursuant to the above assessment the Committee determined that 23.6% of the maximum 30% of this part of the bonus would be
payable and was appropriate in the circumstances.
It is the Committee’s approach to view the performance in the round at the end of the year. The Committee determined a total
bonus of 81.4% of the maximum bonus opportunity is representative of our performance during the year.
Bonus opportunity
2025 bonus
payable (out of
100% maximum)
Bonus earned –
payable in cash
Bonus earned
– deferred
in shares for
three years
1
Helen Gordon 140% of salary 81.4% £518,468 £172,823
Rob Hudson 140% of salary 81.4% £404,481 £134,827
1. The deferred bonus share awards will be granted after the announcement of annual results.
3. LTIP awards performance assessment for 2025
LTIP awards vesting in December 2025
The LTIP awards granted to Helen Gordon and Rob Hudson on 12 December 2022 are due to vest on 11 December 2025.
These awards are based on a relative TSR condition, a Total Property Income Return (TPIR) condition, and a Secured PRS condition,
measured over a three-year period. Performance against the targets can be summarised as follows:
Measure Weighting
Threshold
(25% vesting)
Maximum
(100% vesting)
Actual
performance
Out-turn
(% of max
element)
Relative TSR
1
33.3% Median
ranking
Upper
quartile
ranking
TSR of -21.1%
places Grainger
below
median
0%
TPIR
2
33.3% 3.5% p.a 5.0% p.a 5.9% p.a 100%
Secured PRS
3
33.3% £500m £600m £600m 100%
Total vesting 100% 66.7%
1. Versus a bespoke group of real estate peers. The TSR peer group comprises Assura, Big Yellow Group, CLS Holdings, Derwent London, Great Portland Estates, Hammerson, Home REIT, LondonMetric
Property, Primary Health Properties, Safestore, SEGRO, Shaftesbury Capital, Sirius Real Estate, Supermarket Income REIT, Target Healthcare REIT, Tritax Big Box REIT, UNITE Group , Warehouse REIT
and Workspace Group.
2. The average like-for-like rental growth over the three-year period was 5.9% (2023: 7.7%, 2024 6.3%, 2025 3.6%). This resulted in performance above the threshold target.
3. The Secured PRS Investment metric is effectively a measure of the value of the Company’s pipeline of future development opportunities and provides a clear focus on driving growth in the long-term.
As set out in the 2023 Annual report, the targets were set during a period of significant uncertainty and as the first year of the 3 year performance period progressed, performance has been very
strong and the Committee felt it would be appropriate to increase the agreed targets from £250m to £350m to a cumulative threshold target of £500m and a maximum target of £600m for the
three-year period ended 30 September 2025. The targets were set on the assumption that funding for acquisition and development of potential sites is provided from the ongoing asset recycling
programme, operational cash flow generation of the Company and with continued focus on the loan-to-value position. The actual value of investment secured during the period was £600m and was
made up of:
• £427m in FY23 (Merrick Place, Southall; Southall (TfL, 51% share); Montford Place (TfL, 51% share); Arnos Grove (TfL, 51% share); and Nine Elms (TfL, 51% share))
• £138m in FY24 (Guildford Station; Hale Wharf 2, London; The Astley, Manchester)
• £35m in FY25 (Bollo Lane (TfL, 51% share))
4. The Committee evaluated the quality of investments in determining the PRS Investment vesting outcome. Firstly, the Committee considered the extent to which there was any material unapproved
variation from the basis upon which any individual scheme was initially approved. Secondly, a post-investment review for stabilised assets was undertaken with regular monitoring of schemes to
ensure that investments remained of sufficient quality in light of market conditions.
The vesting of the LTIP awards granted on 12 December 2022 is 66.7% of the total award. The estimated vesting value of these
awards shown in the single figure table are as follows:
Executive Director Shares granted
Number of
shares
expected
to lapse
Number of
shares
expected
to vest
Estimated value
of shares
vesting
1
£’000
Face value
of shares
expected
to vest
2
£’000
Impact of
share price
at vesting
3
£’000
Helen Gordon 417,297 139,273 278,024 582 689 (107)
Rob Hudson 298,616 99,663 198,953 416 493 (77)
1. Based on the average three-month share price to 30 September 2025 of 199p. No part of this value was attributable to share price growth between grant and 30 September 2025.
2. Based on the prevailing share price at the relevant grant date.
3. The difference between the value of the shares under awards vesting and the value of the shares at grant.
Vested awards are subject to a two-year post vesting holding period.
LTIP and recruitment awards vested in December 2024
The awards made to Helen Gordon and Rob Hudson on 16 December 2021 vested on 15 December 2024 and were based one-third
on relative TSR, one-third on TPR and the remaining one-third on Secured PRS Investment.
In aggregate, 44.7% of the December 2021 LTIP award vested in line with what was set out in last year’s report. The value of these
awards shown in the revised 2024 single figure table included in this Annual Report and Accounts is based on the share price at the
date of vesting (15 December 2024 (226.5p)) and also includes the value of dividend equivalents on vested awards.
Annual Report on Remuneration continued
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Annual Report and Accounts 2025
4. Share awards granted during the year
The following LTIP and DBSP awards were granted to the CEO and CFO in FY25:
LTIP share awards
(18 December 2024)
DBSP share awards
(18 December 2024)
Number
Face value
£’000 Number
Face value
£’000
Helen Gordon 515,032 1,182 88,673 202
Rob Hudson 351,575 807 69,336 158
LTIP
The face value of LTIP share awards for Helen Gordon (200% of salary) and Rob Hudson (175% of salary) is based on a price of
230p, being the average share price for the five business days immediately preceding the award being made on 18 December 2024.
The awards will vest three years after grant and a two-year holding period will apply.
Vesting of the awards is dependent upon continued employment and satisfying performance criteria.
Four measures apply, a relative TSR condition measured against a group of real estate companies (30% of awards), a TPIR condition
(30% of awards), a Secured PRS Investment condition (30% of awards) and an ESG condition (carbon reduction based) (10%
of awards).
The relative TSR performance condition requires Grainger’s three-year relative TSR performance versus the comparator group to be
at least at median for 25% of this part of the award to vest, with vesting then increasing on a straight-line basis to 100% for upper
quartile performance.
TPIR continued to be used in place of TPR due to the uncertainty affecting capital values at the time the awards were granted.
The targets are based on annual average like-for-like rental growth over the three-year performance period. For this part
of the award, threshold (25% vesting) has been set at 2.5% annual average growth, and the maximum target at 5% annual
average growth).
The targets for the EBITDA margin condition were based on performance in 2027 with 25% of this part of the award vesting
delivering 56% margin and 100% vesting for 58% or higher.
The ESG targets were based 5% on operational carbon reduction and 5% on embodied carbon with both measures requiring an
8% reduction for threshold vesting and a 14% reduction or more for full vesting. Towards the end of FY25, the Committee, with
support from the Responsible Business Committee, considered the relevance of the embodied carbon measure in the context
of the impact of planning delays to our direct development projects resulting from changes to the building safety regulations.
The RBC and Remuneration Committee concluded that the embodied carbon targets (based on the intensity of carbon per square
meter of development projects in design) were no longer appropriate. Therefore, the Committee agreed to reallocate the 5%
embodied carbon weighting to the operational carbon measure for the December 2024 awards. The operational carbon metric
covers Grainger’s Scope 1-3 emissions associated with our buildings (emissions from communal electricity and gas consumption
and customer emissions) and therefore remains appropriate and measurable. The same reallocation has also been taken for the
2023 awards which are due to vest in December 2026. This ensures the carbon metrics, weighting and targets remain appropriately
challenging and relevant to Grainger’s transition to net zero.
DBSP
The deferred bonus share plan (DBSP) awards relate to a 25% deferral of the FY24 annual bonus into Company shares and is based
on a price of 228p, being the average share price for the three business days immediately preceding the award being made on
18 December 2024. The awards will be eligible to vest after three years subject to continued employment.
5. Payments for loss of office and to past Directors
No payments for loss of office or payments to past Directors were made in FY25.
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Financial statementsGover nanceStrategic report
6. Directors’ shareholdings and share interests
Past share awards
Awards
granted
Maximum
award
Number
Awards
vested
Number
1
Awards
lapsed
Number
Maximum
outstanding
awards at
30 Sep 2025
Number
Market price
at date of
vesting
(p)
Vesting
date
Helen Gordon LTIP shares 16-Dec-21 325,665 145,637 180,028 – 226.5 15-Dec-24
LTIP shares 12-Dec-22 417,297 – – 417,297 – 11-Dec-25
LTIP shares 11-Dec-23 423,954 – – 423,954 – 10-Dec-26
LTIP shares
2
18-Dec-24 515,032 – – 515,032 – 17-Dec-27
DBSP 16-Dec-21 38,238 38,238 – – 226.5 15-Dec-24
DBSP 12-Dec-22 71,609 – – 71,609 – 11-Dec-25
DBSP 11-Dec-23 70,844 – – 70,844 – 10-Dec-26
DBSP 18-Dec-24 88,673 – – 88,673 – 17-Dec-27
Rob Hudson LTIP shares 16-Dec-21 233,045 104,218 128,827 – 226.5 15-Dec-24
LTIP shares 12-Dec-22 298,616 – – 298,616 – 11-Dec-25
LTIP shares 11-Dec-23 292,183 – – 292,183 – 10-Dec-26
LTIP shares
2
18-Dec-24 351,575 – – 351,575 – 17-Dec-27
DBSP 16-Dec-21 2,233 2,233 – – 226.5 15-Dec-24
DBSP 12-Dec-22 50,197 – – 50,197 – 11-Dec-25
DBSP 11-Dec-23 48,257 – – 48,257 – 10-Dec-26
DBSP 18-Dec-24 69,336 – – 69,336 – 17-Dec-27
1. LTIP and DBSP share options vested but are unexercised at the date of this report. These will remain capable of exercise in accordance with the scheme rules.
2. Details of the December 2024 LTIP awards are set out in Note 4 (Share awards granted during the year) above.
The December 2023 LTIP awards include a PRS secured investment measure for 30% of the total award. Following the Board’s
decision during 2025 to focus on deleveraging, the Committee has reflected this in the targets to ensure the targets are
appropriately aligned with the change in strategic direction for the remainder of the 3-year performance period.
All-employee share options under SAYE
Granted
in year
Lapsed
during
year
Exercised
during
year
Exercise
price
(p)
Market
price on
exercise
(p)
Gains on
exercise
of share
options
(£)
Share
options
at 30 Sep
2025
Exercise
price
(p)
Earliest
exercise
date
Latest
exercise
date
Share
options at
1 Oct
2024 Number
Grant
price
(p) Number Number
Helen
Gordon
SAYE 8,866 – 203.0 – – – – – 8,866 203.0 01-Sep-26 01-Mar-27
Rob
Hudson
SAYE 14,778 10,606 203.0 14,778 – – – – 10,606 173.0 01-Sep-28 01-Mar-29
The closing trade share price on 30 September 2025 was 194p. The highest trade share price during the year was 249p and the
lowest was 179p.
All-employee share awards under the SIP
Ordinary shares of 5p each
30 Sept 2024
shares
30 Sept 2025
1
shares
Executive Directors
Helen Gordon 11,786 13,452
Rob Hudson 2,922 4,588
1. Since 30 September 2025, Helen Gordon and Rob Hudson acquired shares in the Company through the Grainger Employee Share Incentive Scheme (320 ordinary 5p shares each).
Annual Report on Remuneration continued
114
Grainger plc
Annual Report and Accounts 2025
Shareholding at 30 September 2025
Directors’ share interests and shareholding requirements are set out below. In order that their interests are aligned with those of
Shareholders, Executive Directors are expected to build up and maintain a personal shareholding equal to 200% of basic salary in
the Company. The table below sets out the Directors’ interests in shares.
Owned shares at
30 Sep 2025
1
Vested but
unexercised
share awards
Unvested
share awards
Total interests
held at
30 Sep 2025
2
Total interests
held at
30 Sep 2024
Shareholding
as % of basic
salary
3
Executive Directors
Helen Gordon 812,381 256,903 1,587,409 2,656,693 2,399,474 300.8
Rob Hudson 260,095 190,561 1,110,164 1,560,820 1,374,373 146.8
Non-Executive Directors
Mark Clare 161,333 – – 161,333 161,333 N/A
Justin Read 20,534 – – 20,534 20,534 N/A
Janette Bell 1,636 – – 1,636 1,636 N/A
Carol Hui 5,000 – – 5,000 5,000 N/A
Michael Brodtman 20,164 – – 20,164 20,164 N/A
1. Owned shares include shares as shown on the Company’s Register, beneficially owned shares including shares held in a nominee account and shares held in the SIP trust.
2. The total interests include beneficially owned shares, shares held in the SIP trust, include Owned shares, vested but unexercised shares and unvested share awards.
3. The value of shares held (calculated as at 30 September 2025 when the share price was 194p) includes Owned shares, vested but unexercised share awards (on a post-tax basis) and those purchased
under the SIP. If unvested DBSP awards (which vest subject to continued employment only) and the December 2022 LTIP due to vest in December 2025 (for which performance has already been
tested) were to be included, the value of shares held (on a post-tax basis) would rise to 386.4% of basic salary in the case of Helen Gordon and 225.8% in the case of Rob Hudson. The shareholding as
% of basic salary is calculated using the total interests as at the year-end date and does not include SAYE related options which have not been exercised.
7. Performance graph
Total Shareholder Return
This graph shows the percentage change by 30 September 2025 of £100 invested in Grainger plc on 30 September 2015
compared with the value of £100 invested separately in both the FTSE 250 Index and the FTSE 350 Real Estate Supersector Index.
These indices have been chosen as Grainger is a constituent in each.
30/09/202330/09/2022 30/09/2024 30/09/202530/09/202130/09/202030/09/201930/09/201830/09/201730/09/2 01630/09/2015
Source: Datastream (a Refinitiv product)
0
20
40
60
80
100
140
120
160
180
200
Grainger plc FTSE 250 Total Index FTSE 350 Real Estate Supersector Index
8. Chief Executive single figure
Chief Executive
single figure of
total remuneration £’000
Annual variable element
award rates against
maximum opportunity
%
Long-term incentive vesting
rates against maximum
opportunity
%
2025 Helen Gordon
1
1,963 81 67
2024 Helen Gordon
1
1,826 99 45
2023 Helen Gordon
2
1,683 98 32
2022 Helen Gordon 2,022 98 83
2021 Helen Gordon 1,631 67 48
2020 Helen Gordon 1,688 70 67
2019 Helen Gordon 1,185 27 36
2018 Helen Gordon 1,174 72 8
2017 Helen Gordon 985 61 N/A
2016
3
Helen Gordon (from 4 January 2016) 882 73 N/A
2016 Andrew Cunningham (to 4 January 2016) 376 – –
1. The total remuneration and long-term incentive vesting figures for 2025 are estimated.
2. The total remuneration for 2024 was restated following the update to the 2024 single figure table.
3. Helen Gordon’s single figure of total remuneration includes a period when she was Chief Executive designate, during which Andrew Cunningham was Chief Executive. Accordingly, there is an element
of double counting in her single figure of total remuneration for 2016.
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Financial statementsGover nanceStrategic report
9. Percentage change in remuneration of Directors and employees
The annual percentage change in remuneration over the last five years, excluding LTIP and pension contributions, for the Chief
Executive, Chief Financial Officer, Non-Executive Directors and for the average of all other employees in the Group is set out in the
table below.
Executive Directors Non-Executive Directors Employee
Helen
Gordon
Vanessa
Simms
1
Rob
Hudson
2
Mark
Clare
Andrew
Carr-
Locke
3
Justin
Read
3
Janette
Bell
3
Rob
Wilkinson
4
Carol Hui
5
Michael
Brodtman
6
Percentage change
2020-21
Base salary 1.5% 1.5% – 1.5% 1.5% 1.5% 1.5% 1.5% N/A N/A 2.0%
Taxable benefits (0.2)% (43.1)% – N/A N/A N/A N/A N/A N/A N/A (0.7)%
Annual bonus (3.6)% – – N/A N/A N/A N/A N/A N/A N/A 33.3%
Percentage change
2021-2022
Base salary 2.0% – 2.0% 2.0% – 16.4% 10.8% 2.0% N/A N/A 2.5%
Taxable benefits (0.2)% – (0.4)% N/A N/A N/A N/A N/A N/A N/A (0.8)%
Annual bonus 50.2% – 50.2% N/A N/A N/A N/A N/A N/A N/A 4.6%
Percentage change
2022-2023
Base salary 9.0% – 5.0% 6.0% N/A 6.0% 6.0% 6.0% 6.0% N/A 5.3%
Taxable benefits (0.4)% – (0.9)% N/A N/A N/A N/A N/A N/A N/A (1.7)%
Annual bonus 6.8% – 3.8% N/A N/A N/A N/A N/A N/A N/A 2.6%
Percentage change
2023-2024
Base salary 6.0% – 5.0% 5.0% N/A 5.0% 5.0% N/A 5.0% 5.0% 5.2%
Taxable benefits 0.5% – 5.0% N/A N/A N/A N/A N/A N/A N/A (9.8)%
Annual bonus 7.9% – 23.9% N/A N/A N/A N/A N/A N/A N/A 4.1%
Percentage change
2024-2025
Base salary 3.5% – 3.5% 3.5% N/A 3.5% 3.5% 3.5% 3.5% 3.5% 3.6%
Taxable benefits 25.6% – 4.0% N/A N/A N/A N/A N/A N/A N/A 14.2%
Annual bonus (14.4)% – (14.6)% N/A N/A N/A N/A N/A N/A N/A (10.2)%
1. No bonus was payable to Vanessa Simms due to her resignation in October 2020.
2. Rob Hudson joined Grainger on 31 August 2021. The growth rates for base salary, taxable benefits and annual bonus have been annualised to reflect changes on a like-for-like basis.
3. Andrew Carr-Locke stepped down from the Board in February 2022. Justin Read was appointed Senior Independent Director and Chair of the Audit & Risk Committee, and Janette Bell has taken over
as Chair of the Remuneration Committee.
4. Rob Wilkinson stepped down from the Board in February 2023.
5. Carol Hui was appointed to the Board on 1 October 2021 and Chair of the Responsible Business Committee.
6. Michael Brodtman joined the Board on 1 January 2023.
10. Chief Executive pay ratio
The table below compares the FY25 single total figure of remuneration for the CEO as shown in Note 1 on page 110 with the
Group’s employees paid at the 25th, 50th and 75th percentiles:
Financial year Method 25th percentile 50th percentile (median) 75th percentile
2025 A 56:1
Total pay and benefits £34,761
Salary £32,671
36:1
Total pay and benefits £54,052
Salary £31,103
23:1
Total pay and benefits £85,410
Salary £69,357
2024 A 56:1
Total pay and benefits £32,299
Salary £25,542
37:1
Total pay and benefits £48,831
Salary £39,425
22:1
Total pay and benefits £83,331
Salary £66,779
2023 A 51:1
Total pay and benefits £31,830
Salary £26,882
33:1
Total pay and benefits £49,900
Salary £44,447
19:1
Total pay and benefits £85,792
Salary £63,495
2022 A 60:1
Total pay and benefits £31,831
Salary £25,241
40:1
Total pay and benefits £47,521
Salary £38,500
23:1
Total pay and benefits £81,690
Salary £72,116
2021 A 48:1
Total pay and benefits £32,711
Salary £25,000
33:1
Total pay and benefits £48,540
Salary £42,923
20:1
Total pay and benefits £80,586
Salary £64,720
Annual Report on Remuneration continued
116
Grainger plc
Annual Report and Accounts 2025
Our calculations were made on 14 November 2025 using Option A as the most statistically accurate method.
In undertaking our calculations, no adjustments were made to the figures other than determining the FTE remuneration for all
employees within the Group over the financial year. No non-salary employee remuneration components have been omitted. Joiners,
leavers, employees on a period of statutory leave (such as maternity, paternity and shared parental leave) and long-term absences
during the financial year were excluded.
Total FTE remuneration was calculated on the same basis as the CEO single figure table and includes annual base salary, taxable
benefits (private medical insurance, car allowance), matching shares under our Share Incentive Plan, annual bonus for performance
delivered in the financial year and paid in December 2025, employer pension contributions, and taxable share plans.
The Committee considers that the median CEO pay ratio is consistent with the pay, reward and progression policies available to
our employees. We operate an in-house service model, directly employing colleagues for onsite roles in our growing portfolio
of developments and our employee population at this level will continue to increase as we resource appropriately. It is therefore
difficult to compare our ratios with those in the property industry who do not operate under a similar model.
11. Relative importance of spend on pay
The difference in actual expenditure between 2024 and 2025 on remuneration for all employees, in comparison to profit before
tax and distributions to Shareholders by way of dividend, is set out in the charts below. Profit before tax is considered to be an
appropriate financial metric as it is not impacted by changes in tax rates which are outside of the direct control of the Company.
Profit before tax
£102.6m
+153%
(2024: £40.6m)
Dividend
£61.5m
+10%
(2024: £55.8m)
Total employee pay
£34.4m
+7%
(2024: £32.1m)
12. Statement of implementation of Remuneration Policy for 2026
Base salary
Executive Director base salaries will be increased by 3% effective 1 January 2026, aligned with the increase for the general
workforce. The CEO’s salary will be £630,036 and the CFO’s will be £491,520.
Pension
A workforce aligned 10% of salary pension contribution will continue to be payable to the CEO and CFO.
Annual bonus
Subject to Shareholder approval of the new Policy at the 2026 AGM, the annual bonus potential will continue to be capped at 150%
of salary. The table below sets out the performance measures and their respective weightings for 2025:
Metric Weighting Rationale and description
EPRA Earnings 40% EPRA earnings will be largely driven by Net Rental Income growth and is a key performance indicator
for Grainger post REIT conversion.
Asset Recycling 30% Given that EPRA Earnings will exclude profits from the property sales, an asset recycling metric will
operate to incentivise the sale of the remainder of our low yielding regulated tenancy properties,
portfolios and land to reinvest the capital into our BTR pipeline and new higher-yielding BTR
opportunities.
Strategic and
Operational
objectives
22% Specific objectives relating to Customer Satisfaction, Business Resilience, Funding and Investment
will apply. Due to matters of commercial sensitivity it would not be in the interests of the Company to
disclose the precise operational targets for the annual bonus at the date of production of this Report.
Details of the objectives and the performance achieved will be disclosed retrospectively in the 2026
Annual Report.
Sustainability/ESG 8% Incentivises delivery of Grainger’s corporate strategy and commitments in respect of Community,
Environment, Governance and People (including H&S).
In line with our existing and proposed Policy, 25% of any bonus earned will be delivered as a deferred bonus share award which will
vest after three years.
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Financial statementsGover nanceStrategic report
LTIP
It is intended that the LTIP awards to be made to the Executive Directors in December 2025 will be at the levels detailed below and
subject to a two-year holding period:
• Chief Executive: 200% of salary
• Chief Financial Officer: 175% of salary
The performance measures to apply for the next LTIP grant are expected to be as follows:
Metric Weighting Targets
Relative TSR
(versus a bespoke group
ofreal estate peers)
30% Performance level Ranking Vesting (of this part of an award)
Below threshold Below median 0%
Threshold Median 25%
Maximum Upper quartile 100%
Absolute TAR 30% TAR is based on growth over the 3-year period to 30 September 2028.
Performance level Absolute TAR growth Vesting (of this part of an award)
Below threshold Below 4% p.a. 0%
Threshold 4% p.a. 25%
Maximum 8% p.a. 100%
EBITDA Margin
1
30% Based on the EBITDA Margin delivered in FY28.
Performance level EBITDA Margin Vesting (of this part of an award)
Below threshold Below 58% 0%
Threshold 58% 25%
Maximum 60% 100%
Sustainability/ESG
– Carbon
2
10% (i) Scope 1 and 2 emissions (5% weighting) whereby 25% of this part of the award will vest for a 28%
reduction in absolute Scope 1 and 2 emissions by 2028 (from a FY23 baseline) increasing pro-rata to
100% vesting for a 32% reduction; and (ii) Scope 3 emissions (5% weighting) whereby 25% of this part
of the award will vest for a 35% reduction in Scope 3 emissions from capital goods and downstream
leased assets per m
2
residential GIA by 2028 (from a FY23 baseline) increasing pro-rata to 100%
vesting for a 39% reduction.
1. EBITDA Margin is defined as earnings before interest, depreciation, amortisation and tax, excluding liquidated and ascertained damages, divided by Revenue.
2. The carbon targets include a number of assumptions, including in respect of Government policy and progress in decarbonisation of the grid. To the extent that the underlying assumptions change
materially, the Committee reserves the flexibility to revisit the performance metrics, weightings and targets to ensure that they remain appropriately challenging andrelevant to Grainger’s transition
to Net Zero.
The Committee will retain the right to reduce overall pay outcomes if it considers the variable pay result does not reflect broader
Company performance over the relevant performance periods.
13. Non-Executive Directors’ fees
The Non-Executive Directors’ (NED) fee levels will be increased in line with the typical employee population increase by 3% with
effect from 1 January 2026. Current fee levels and those which will apply from 1 January 2026 are as follows:
Executive Director
1 January
2026
1 January
2025
Basic Non-Executive Director fee £59,179 £57,455
Additional fee for chairing Board committee £11,962 £11,614
Additional fee for Senior Independent Director duties £10,072 £9,779
Chairman’s fee £236,900 £230,000
Simon Fraser joined the Board as Chair Designate on 1 October 2025 and has received the basic Non-Executive Director fee from
this date. It is intended that Simon will take on the role of Chair with effect from the close of the 2026 AGM and his fee will be
£250,000. The Committee has agreed this fee level based on the likely level of time commitment involved in the role and following
areview of Chair fee rates in the market.
14. Directors’ service agreements and letters of appointment
Executive Directors Contract commencement date Notice period
Helen Gordon 3 November 2015 12 months
Rob Hudson 31 August 2021 6 months
Non-Executive Directors Contract commencement date Notice period
Mark Clare 13 February 2017 3 months
Simon Fraser 1 October 2025 3 months
Justin Read 13 February 2017 3 months
Janette Bell 7 February 2019 3 months
Carol Hui 1 October 2021 3 months
Michael Brodtman 1 January 2023 3 months
Annual Report on Remuneration continued
118
Grainger plc
Annual Report and Accounts 2025
15. Remuneration Committee Governance Arrangements
Key responsibilities
The key responsibilities of the Committee include:
• Setting the remuneration frameworks for Directors, Executives and the Board Chair.
• Designing policies that link pay to long-term strategy and sustainable success.
• Overseeing employee pay arrangements and benefit structures.
• Approving performance-related pay schemes with stretching targets.
• Reviewing share plans and determining awards.
• Setting pension policies for executives.
• Ensuring fair termination terms.
• Reviewing remuneration policies for appropriateness.
• Ensuring compliance with governance codes and disclosure requirements.
• Appointing remuneration consultants and obtaining market information.
Terms of reference
The Committee’s terms of reference are reviewed each year and recommended to the Board for approval. We assessed our
compliance with our terms of reference during the year and we also updated our terms of reference to take intoaccount the
requirements of the new Code which applies to Grainger from 1 October 2025. We confirmed that the Committee had complied
with our terms of reference during the year. The Committee terms of reference arepublished on our website (corporate.graingerplc.
co.uk).
Meetings
The Committee’s main work follows a structured programme of activity agreed at the start of the year. Attendance at the
meetingsis set out at the beginning of this section of the Report.
Invitations to attend meetings
The CEO, the CPO and other members of the senior management team may be invited to attend Committee meetings as
appropriate. No Directors are involved in deciding their own remuneration. The Company Secretary acts as secretary to
the Committee.
Remuneration Committee Advisors, FIT Remuneration Consultants LLP were appointed by the Remuneration Committee to provide
advice on executive remuneration matters. Total fees paid or payable (as applicable) to FIT for services during FY25 were £59,000
(2024: £48,000). The fees for 2025 are higher than the previous year and this reflects the work connected to the Policy review and
Shareholder consultation. FIT also provides share plan implementation services and related technical support. FIT are signatories to
the Remuneration Consultants’ Group Code of Conduct and any advice provided is governed by that code. The Committee reviews
the adviser relationship periodically and remains satisfied that the advice it receives from its advisers is independent and objective.
16. Statement of voting at general meeting
The votes received from Shareholders in respect of the Directors’ Remuneration Report for FY24 (2025 AGM) and the 2023 Policy
(2023 AGM) are set out below.
Directors’ Remuneration report (2024) Remuneration Policy (2023)
Total number
of votes
% of
votes cast
Total number
of votes
% of
votes cast
For 583,563,592 96.40 599,740,550 95.06
Against 21,796,786 3.60 31,191,167 4.94
Total votes cast (for and against) 605,360,378 – 630,931,717 100
Votes withheld 11,146,577 – 3,667
NB Votes withheld are not counted.
The Directors’ Remuneration Report is approved by and signed on behalf of the Board of Directors.
Janette Bell
Chair of the Remuneration Committee
19 November 2025
119
Financial statementsGover nanceStrategic report
Employee reporting
Employee reporting as required by the Companies Act is set
out below.
Employee numbers
The total number of employees as at the end of FY25 was
372 and the average monthly number of employees for the
year was 370. The Sustainability Report (page 40) contains
details including gender and ethnicity data at the end of FY25.
See also note 10 of the financial statements for average monthly
employee reporting.
Employment of disabled persons
The Group gives full and fair consideration to applications for
employment made by disabled persons, including those with
hidden disabilities and neurodiversity, having regard to their
particular aptitudes and abilities. In the event of a colleague
becoming disabled, every effort is made to ensure their
employment within the Group continues, and that we arrange
appropriate training where necessary. It is Company policy that
the training, career development and promotion of disabled
persons should, as far as possible, be identical to that
of other employees.
Employee engagement
The Group places considerable value on the engagement with
colleagues and has continued its practice of keeping them
informed on and involved in business and strategic matters,
for example through colleague surveys, meetings with the
Board, team meetings, presentations by senior management
and regular all-colleague conference calls hosted by the
Executive Directors. The Responsible Business Committee,
chaired by Carol Hui who is also the designated Non-Executive
Director for workforce engagement, has responsibility for
monitoring our colleague engagement and the Voice of the
Colleague engagements. For more information on our people
and the activities of the Responsible Business Committee,
see pages 37 (Sustainability) and 92 (Responsible Business
Committee Report).
Share capital
Details of the Company’s share capital are included in note 29 of
the financial statements. During the year shares are allotted to
satisfy SAYE exercises. No repurchase of shares took place.
Political donations
While we do not make any monetary contributions to political
campaigns or organisations, or other tax exempt groups we may
from time to time engage the services of lobbying organisations
in relation to a specific issue. We may also join trade associations
which may be involved in political or lobbying activities. We do
not consider that these activities amount to engagement in,
or contribution to, political activities. Therefore, in accordance
with the Company’s standard approach, we made no political
donations in FY25 (FY24: £nil).
Grainger plc is a public limited company incorporated in England
and Wales under the Companies Act 2006 with registered
number 00125575.
The Directors present this Report, which includes the
consolidated financial statements for FY25. For the purposes
of DTR 4.1.8R, the Strategic Report on pages 1 to 70 is also the
Management Report for FY25.
The Report of the Directors’ comprises the Governance Report
(pages 71 to 123), and includes this Directors Report and the
Shareholder Information section (page 185). Related information
can also be found in our Sustainability Report and the
Governance Report which includes the Committee reports.
The Companies Act 2006 requires us to prepare a Strategic
Report and this is included at pages 1 to 70. As permitted by
Section 414C(11) of the Companies Act 2006, some matters
required to be included in the Directors’ Report have instead
been included in the Strategic Report and are incorporated by
reference in this Directors’ Report. The Strategic Report provides
information on the Group’s operations and the business model.
The following information required to be included in the
Directors’ Report is provided in other sections of the Report and
is incorporated into this Directors’ Report by reference in the
table below:
Information Pages
Principal activities during the year 5 to 8
Review of business performance 31 to 35
Likely future developments affecting the Company 35
Statement of directors’ responsibilities
regarding financial statements
122
Employee engagement initiatives 94
Section 172 statement and engagement with
Shareholders, suppliers, customers and other stakeholders
80
Greenhouse gas (GHG) emissions and energy efficiency
(SECR)
48 to 52
Financial instruments 159 to
165
Going concern
The Directors consider it appropriate to adopt the going concern
basis of accounting in preparing the financial statements.
The Directors’ going concern assessment is discussed in Note 1
of the financial statements.
Directors
Details of the Directors can be found on page 74 and 75.
The Governance Report also includes details about our
governance arrangements, including appointments to the Board.
Directors’ interests in significant contracts
No Directors were materially interested in any contract
of significance.
Directors’ indemnities and insurance
The Company has in place contractual entitlements for
the Directors of the Company and its subsidiaries to claim
indemnification by the Company for certain liabilities they might
incur in the course of their duties. We have established these
arrangements, which constitute qualifying third-party indemnity
provision and qualifying pension scheme indemnity provision,
in compliance with the relevant provisions of the Companies
Act 2006. They include provision for the Company to fund the
costs incurred by Directors in defending certain claims against
them in relation to their duties. The Company also maintains an
appropriate level of Directors’ & Officers’ liability insurance.
Directors’ Report
120
Grainger plc
Annual Report and Accounts 2025
Takeover directive
On a change of control, the main bank facilities (included in Note
26 to the financial statements) will become repayable should
alternative terms for continuing the facilities not be agreed with
the lenders within 45 days. In addition, the corporate bonds
(also referred to in Note 26) may become repayable following a
change of control. There are no other material matters relating
to a change of control of the Company following a takeover bid.
AGM
The AGM is scheduled for 4 February 2026 and the Notice of
AGM will be issued in December 2025. We will announce its
publication and make it available on our website as well as file
acopy with the National Storage Mechanism.
Substantial Shareholders
Details of the interests disclosed to the Company at the end of
FY25 and at 18 November 2025 (being the latest practicable
date prior to the date of this Report) is set out at page 82.
The information is reported in accordance with DTR 5 and as
required by LR 6.6.6. The table details interests with voting
rights(direct and indirect) amounting to 3% or more and the
data included is derived from analysts’ reports and replies
received from Shareholders.
The Directors’ Report has been approved by and is signed on
behalf of the Board of Directors.
Sapna FitzGerald
Company Secretary
19 November 2025
Disclosures required by UK LR 6.6.1(1) to (13)R:
Listing
Rule Information required Disclosure
(1) Interest capitalised by Group Refer to note 12
in the financial
statements
(2) Unaudited financial information
(LR 9.2.18R)
None
(3) Long-term incentive schemes
information relating to Board Directors
(LR 9.3.3R)
Directors’
Remuneration
Report (page 112)
(4) Waiver of emoluments by a Director None
(5) Waiver of future emoluments by
a Director
None
(6) Non pre-emptive issues of equity
for cash
None
(7) Non pre-emptive issues of equity for
cash in relation to a major subsidiary
undertaking
None
(8) Listed company is a subsidiary
of another company
Not applicable
(9) Contracts of significance involving
a Director of a controlling shareholder
None
(10) Contracts for the provision of services
by a controlling shareholder
None
(11) Shareholder waiver of dividends None
(12) Shareholder waiver of future dividends None
(13) Agreement with controlling Shareholder Not applicable
121
Financial statementsGover nanceStrategic report
Statement of Directors’ responsibilities in respect of the
Annual Report and Accounts 2025
The Directors are responsible for preparing the Annual Report
and Accounts 2025 including the Group and parent Company
financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare Group and parent
Company financial statements for each financial year. Under that
law they are required to prepare the Group financial statements
in accordance with UK-adopted international accounting
standards (IFRS) and applicable law and have elected to prepare
the parent Company financial statements in accordance with
UK accounting standards and applicable law, including FRS 101
Reduced Disclosure Framework.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and parent Company
and of the Group’s profit or loss for that period. In preparing each
of the Group and parent Company financial statements, the
Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and estimates that are reasonable, relevant,
reliable and prudent;
• for the Group financial statements, state whether they have
been prepared in accordance with UK-adopted international
accounting standards (IFRS);
• for the parent Company financial statements, state whether
applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in
the parent Company financial statements;
• assess the Group and parent Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern; and
• use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to
cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the parent Company and
enable them to ensure that its financial statements comply with
the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The Company is required to include these financial statements
in an annual financial report prepared under Disclosure
Guidance and Transparency Rule 4.1.17R and 4.1.18R.
The auditor’s report provides no assurance over whether the
annual financial report has been prepared in accordance with
those requirements.
Directors’ declaration in relation to the relevant
audit information
The Directors who were on the Board during the year under
review each confirm that to the best of their knowledge::
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole; and
• the Strategic report includes a fair review of the development
and performance of the business and the position of the
Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
Directors’ responsibility statement
The Directors consider this Report taken as a whole, is fair,
balanced and understandable and provides the information
necessary for Shareholders to assess the Group’s position and
performance, business model and strategy. Independent auditor
and disclosure of information to auditor In accordance with
section 418 of the Companies Act 2006, each Director confirms
that: (a) in so as far he/she is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
(b) each Director has taken the steps they ought to have taken
as Directors, to make themselves aware of any relevant audit
information, and to establish that the Company’s auditor is
aware of that information.
The Statement has been approved by and is signed on behalf
of the Board of Directors.
Sapna FitzGerald
Company Secretary
19 November 2025
122
Grainger plc
Annual Report and Accounts 2025
Alternative performance measures
For FY25
Performance measure Definition
Loan to Value (LTV) Ratio of net debt to the market value of properties and property related assets. This is a key metric for the
Group as part of measuring gearing at both an overall Group and individual facility level, linked to both our
riskappetite and individual facility covenants.
2025
£m
2024
£m
Gross debt 1,590.1 1,592.9
Cash (85.8) (93.2)
Restricted deposits (57.7) (63.3)
Less restricted client cash 16.9 16.4
Net debt 1,463.5 1,452.8
Market value of properties 3,665.3 3,648.4
Investment in associates 15.2 14.9
Investment in joint ventures 77.5 76.4
Financial interest in property assets 48.6 57.4
Treasury shares 2.9 3.8
Total market value of properties and property related assets 3,809.5 3,800.9
LTV 38.4% 38.2%
Total Property Return (TPR) A performance measure which represents the change in gross asset value, net of capital expenditure
incurred, plus property related net income, expressed as a percentage of opening gross asset value. This
is a key metric for the Group in measuring the overall performance of property returns on the Group’s
property assets, with LTIP conditions linked to the performance of this metric as outlined in the Directors’
Remuneration report.
2025
£m
2024
£m
Net rental income 123.6 110.1
Liquidated and ascertained damages ‘LADs’ 3.6 5.2
Profit on disposal of trading property 38.9 49.4
Previously recognised profit through EPRA market value measures (42.4) (54.2)
Profit on disposal of investment property (1.6) (5.8)
Income from financial interest in property assets 1.1 (1.3)
Net valuation gains/(losses) on investment property 29.5 (32.5)
Net valuation (losses)/gains on trading property (3.8) 0.6
Property return 148.9 71.5
Investment property – opening balance 3,028.3 2,948.9
Financial interest in property assets – opening balance 57.4 67.0
Inventories – trading property – opening balance 620.1 734.3
Total opening gross assets 3,705.8 3,750.2
TPR 3.9% 1.9%
123
Financial statementsGover nanceStrategic report
Glasshouse Square, Bristol
Financial
statements
Independent Auditor’s Report
125
Consolidated income statement
132
Consolidated statement
ofcomprehensiveincome
133
Consolidated statement
of financial position
134
Consolidated statement
of changes in equity
135
Consolidated statement of cash flows
136
Notes to the financial statements
137
Parent company statement
offinancial position
174
Parent company statement ofchangesinequity
174
Notes to the parent company
financialstatements
175
EPRA performance measures (unaudited)
180
Five year record (unaudited)
184
124
Grainger plc
Annual Report and Accounts 2025
Independent auditor's report to the members of Grainger plc
1. Our opinion is unmodified
We have audited the financial statements of Grainger plc (“the Company”) for the year ended 30 September 2025 which comprise
the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of
Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows, the Parent
Company Statement of Financial Position and Statement of Changes in Equity, and the related notes, including the accounting
policies in Note 1 of both the Group (Page 137 to 139) and Parent Company financial statements (Page 175 to 176).
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at
30 September 2025 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the parent Company financial statements have been properly prepared in accordance with UK accounting standards, including
FRS 101 Reduced Disclosure Framework; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis
for our opinion. Our audit opinion is consistent with our report to the Audit and Risk Committee.
We were first appointed as auditor by the shareholders on 5 February 2015. The period of total uninterrupted engagement is for
the11 financial years ended 30 September 2025. We have fulfilled our ethical responsibilities under, and we remain independent
of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest
entities. No non-audit services prohibited by that standard were provided.
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. We summarise below the key audit matters, in decreasing order of audit significance, in arriving
at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest
entities, our results from those procedures. These matters were addressed, and our results are based on procedures undertaken,
inthe context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon,
and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.
The risk Our response
Valuation of
properties
Investment properties,
including held for
sale assets held at
fair value: (£3,124.3m;
2024: £3,028.3m).
Refer to page
95 (Audit & Risk
Committee Report),
pages 139–142 (critical
accounting estimates
and judgements) and
page 152 (accounting
policies and financial
disclosures).
Subjective valuation of investment
properties, including held for sale assets:
The valuation approach adopted by the
directors varies between portfolios:
– For properties let into the private rental
market, and affordable housing properties,
the valuation is derived by applying a gross
initial yield to the estimated rental value
of the property. Yield is based on market
evidence and is an inherently judgemental
input. There is a risk that applying an
inappropriate yield could lead to a material
difference in the valuation. Where relevant,
valuations are reduced to reflect the
estimated costs of planned remedial works
relating to fire safety. There is a risk that not
all works are identified or that cost estimates
are insufficient.
– For properties under construction which
are to be let into the private rental market,
a consistent valuation methodology to
the one mentioned above, is adopted.
Additional adjustments are then made for
capital expenditure not yet incurred, and
development and stabilisation risk. There
is an additional risk that these adjustments
could be inappropriate and result in a
material difference in the valuation.
We performed the tests below rather than seeking to rely on any of the
Group’s controls because the nature of the balances are such that we
would expect to obtain audit evidence primarily through the detailed
procedures described.
Our procedures in respect of all property types identified included:
– Methodologies: we have challenged the methodologies used for
the specific portfolios with reference to market practice, with the
assistance of our property valuation specialists.
– Sensitivity analysis: we have performed sensitivity analysis over
the key assumptions and considered the outcomes with reference
tobenchmarks.
– Assessing valuers’ credentials: we assessed the objectivity,
professional qualifications, independence and experience of the
external valuers engaged by the Group, through research, discussion
with them and by reading their valuation reports and terms of
engagement letter for fee arrangements and other incentive terms.
– Attendance at Group valuation meetings: we attended the
Group’s meetings with their external valuers and challenged the
market evidence presented by the valuers with the help of our own
property valuation specialists.
– Historical comparisons: we compared the 2024 year end valuation
with the sales price achieved for property sales in the current year.
– Assessing transparency: we assessed whether the Group’s
disclosure about the sensitivity of fair value changes in key
assumptions reflected the uncertainties inherent in the
investmentproperty valuations.
125
Financial statementsGovernanceStrategic report
The risk Our response
– For individual properties, the valuation
is determined by estimating a vacant
possession (VP) value and applying a
discount to reflect the fact that the property
is tenanted. The VP value and the discount
applied are estimated with reference to
evidence from comparable property sales,
which in some cases may be limited. This
means the valuation is inherently subjective
and susceptible to misstatement.
– For the Tricomm portfolio and shared
ownership affordable housing, the valuation
is based on a discounted cash flow model
produced by an external valuer. There is
a risk that the house price inflation (HPI)
and discount rate assumptions could be
inappropriate which could lead to a material
misstatement in valuation.
– The effect of these matters is that, as part
of our risk assessment, we determined that
the valuation of investment properties held
at fair value has a high degree of estimation
uncertainty, with a potential range of
outcomes greater than our materiality for
the financial statements as a whole, and
possibly many times that amount. The
financial statements note 2 disclose the
sensitivity estimated by the Group.
– We continue to perform procedures over
Valuation of Trading Properties. However,
given the declining volume of trading
property holdings and the consistently
immaterial nature of the net realisable value
(‘NRV’) provision we have not assessed this
area as one of the most significant risks in
the current year audit. Accordingly, it has
not been separately identified as a key audit
matter in our auditreport this year.
Our additional procedures in respect of private rental sector properties
and affordable housing properties included:
– Yield rates: we have challenged the yield rates applied using our
understanding of the assets and compared to available market data,
with the assistance of our property valuation specialists.
– Fire safety works: we assessed the completeness of the list of
properties requiring remedial works with reference to the Group’s
records supporting compliance with the Building Safety Act,
including inspecting fire risk assessment reports. We inspected
correspondence with third parties in respect of responsibility
for the costs of remedial works and compared remediation cost
adjustments to third party evidence, including tenders received.
Our additional procedures in respect of properties under construction
which are to be let into the private rental market, included:
– Test of details: for a sample of properties, we agreed the
adjustments made for capital expenditure not yet incurred to the
latest third party supplier funding assessment.
– Our valuation expertise: using our property valuation specialists,
we critically assessed the adjustments made for development and
stabilisation risk with reference to sector practice.
Our additional procedures in respect of individual properties included:
– Comparing valuations: we challenged the inputs used in valuations
and compared valuations to recent comparable transactions.
Our additional procedures in respect of the Tricomm portfolio and the
shared ownership affordable housing properties included:
– Benchmarking assumptions: we compared the Housing Price Index
assumption included in the discounted cash flow model to market
indices and discount rates to market information including gilts and
benchmarked risk premiums.
Our Results
– We found the valuation of investment properties held at fair value in
Note 16 to be acceptable (2024: acceptable).
Recoverability of
Parent company’s
investment in
subsidiaries
Investment in
subsidiaries:
(£ 2,5 67.2m; 2024:
£2,594.0m
Net impairment
of investment in
subsidiaries:
(£31.9m; 2024:
£224.7m)
Refer to page 175
(critical accounting
estimates and
judgements) and
page 176 (accounting
policies and financial
disclosures).
Low risk, high value
The carrying amount of the parent
Company’sinvestments in subsidiaries
represents 94% (2024: 95%) of the parent
Company’s total assets.
Their recoverability is not at a high risk of
material misstatement or subject to significant
judgement. However, due to their materiality
in the context of the parent Company financial
statements, this is considered to be the area
that had the greatest effect on our overall
parent Company audit.
We performed the tests below rather than seeking to rely on any of the
parent Company’s controls because the nature of the balance is such
that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Our procedures included:
– Tests of detail: We compare the carrying amount of 100% of
investments with the relevant subsidiaries’ draft balance sheet as
of 30 September 2025 to identify whether their net assets, being an
approximation of their minimum recoverable amount, were in excess
of their carrying amount and assessing whether those subsidiaries
have historically been profit-making.
– Assessing subsidiary balances: Considering the results of our
workon all of those subsidiaries’ profits and net assets.
Our results:
We found the parent company's investment in subsidiaries balance,
and the related net impairment recognised, to be acceptable
(2024: acceptable).
Independent auditor's report to the members of Grainger plc continued
126
Grainger plc
Annual Report and Accounts 2025
3. Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £35.0m (2024: £34.0m), determined with reference to a
benchmark of Group total assets of which it represents 0.95% (2024: 0.93%).
Materiality for the parent Company financial statements as a whole was set at £30.0m (2024: £30.0m), determined with reference
to a benchmark of Company net assets, of which it represents 1.62% (2024: 1.62%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in
individual account balances add up to a material amount across the financial statements as a whole.
Performance materiality was set at 75% (2024: 75%) of materiality for the financial statements as a whole, which equates to £26.2m
(2024: £25.5m) for the Group and £22.5m (2024: £22.5m) for the parent Company. We applied this percentage in our determination
of performance materiality because we did not identify any factors indicating an elevated level of risk.
We agreed to report to the Audit and Risk Committee any corrected or uncorrected identified misstatements exceeding £1.75m
(2024: £1.70m), in addition to other identified misstatements that warranted reporting on qualitative grounds.
In addition, we applied materiality of £3.9m (2024: £3.5m) and performance materiality of £2.9m (2024: £2.6m) to specific relevant
Group income statement balances, namely net rental income, profit on disposal of investment property, profit on disposal of
trading property, finance costs, fees and other income, for which we believe misstatements of lesser amounts than materiality
for the financial statements as a whole could be reasonably expected to influence the primary users’ assessment of the financial
performance of the Group. In relation to these balances, we agreed to report to the Audit and Risk Committee any corrected
or uncorrected identified misstatements exceeding £0.19m (2024: £0.17m), in addition to other identified misstatements that
warranted reporting on qualitative grounds.
The Group team performed the audit of the Group as if it were a single aggregated set of financial information. The Group team
performed the Parent Company audit. The audit was performed using the materiality levels set out above.
Impact of controls on our group audit
We identified the main finance IT system used by the Group as pertinent to our audit. Our IT auditors assisted us in gaining an
understanding of this system.
We did not plan to rely on any of the Group’s automated or manual controls in any areas of our audit and instead took a fully
substantive approach. This approach was adopted after considering the efficiency and effectiveness of approaches to obtain
the appropriate audit evidence. Given we did not rely on controls, a direct testing approach was used over the completeness and
reliability of data used in auditing key areas such as certain inputs into the valuation of properties.
In line with previous audits, we identified a control deficiency in relation to manual journal entries that are not subject to approval
prior to entry in the system. We responded by adjusting our audit approach to manual journal entries, increasing the extent of our
direct testing of the completeness and reliability of system information used in our audit of journal entries.
£35.0m
Total assets
£3,771.8m (2024: £3,742.7m)
Group Materiality
£35.0m (2024: £34.0m)
£1.75m
Misstatements reported
to the Audit and Risk Committee
(2024: £1.70m)
Group total assets
£3,771.8m
Group materiality £35.0m
Whole financial
statements materiality
(2024: £34.0m)
The scope of the audit work performed was predominately substantive as we placed limited reliance upon the Group’s internal
control over financial reporting.
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4. The impact of climate change on our audit
In planning our audit, we have considered the potential impacts of climate change on the Group’s business and its financial
statements. Climate change impacts the Group in a number of ways: through its own operations (including potential reputational
risk associated with the Group’s delivery of its climate related initiatives), through its portfolio of properties and the greater
emphasis on climate related narrative and disclosure in the Annual Report. The Group’s main potential exposure to climate change
in the financial statements is primarily through the carrying value of its properties as the estimated valuation may need to be
adjusted to the impact of climate transition risk related factors.
As part of our audit, we have made enquiries of directors and the Group’s Corporate Sustainability team to understand the extent
of the potential impact of climate change risk on the Group’s financial statements and the Group’s preparedness for this. We have
performed a risk assessment of how the impact of climate change may affect the financial statements and our audit, in particular
with respect to the valuation of properties. Given that these valuations are largely based on comparable market evidence we
assessed that the impact of climate change was not a significant risk for our audit, nor does it constitute a key audit matter.
We held discussions with our own climate change professionals to challenge our risk assessment.
We have also read the Group’s disclosure of climate related information in the front half of the Annual Report as set out on pages
36 to 60, and considered consistency with the financial statements and our audit knowledge. We have not been engaged to provide
assurance over the accuracy of these disclosures.
5. Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or
theCompany or to cease their operations, and as they have concluded that the Group’s and the Company’s financial position means
that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over
their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going
concern period”).
In our evaluation of the directors’ conclusions, we used our knowledge of the Group, its industry, and the general economic
environment to identify the inherent risks to its business model and analysed how those risks might affect the Group and Parent
Company’s financial resources or ability to continue operations over the going concern period.
The risks that we considered most likely to adversely affect the Group and parent Company’s available financial resources over
thisperiod were:
• Macroeconomic pressures (energy costs, inflation, interest rates) may reduce demand in the private rental sector, leading to
reduced rental levels.
• A downturn in the property market could lead to reduced sales activity.
• Declining property valuations may increase LTV ratios and reduce covenant headroom.
• Sustained cost inflation and elevated interest rates may impact development viability.
• Changes in fiscal policy could adversely affect property market conditions.
We considered whether these risks could plausibly affect the liquidity or covenant compliance in the going concern period by
comparing severe, but plausible downside scenarios that could arise from these risks individually and collectively against the level
ofavailable financial resources and covenants thresholds indicated by the Group’s financial forecasts.
We also assessed the completeness of the going concern disclosure.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements
is appropriate;
• we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or
conditions that, individually or collectively, may cast significant doubt on the Group’s or Company's ability to continue as a going
concern for the going concern period;
• we have nothing material to add or draw attention to in relation to the directors’ statement in note 1 to the financial statements
on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the
Group and Company’s use of that basis for the going concern period, and we found the going concern disclosure in note 1 to be
acceptable; and
• the related statement under the UK Listing Rules is materially consistent with the financial statements andour audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that
theGroup or the Company will continue in operation.
Independent auditor's report to the members of Grainger plc continued
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6. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
• Enquiring of directors and the Audit and Risk Committee, as to the Group’s high-level policies and procedures to prevent
and detect fraud, including the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual,
suspected or alleged fraud;
• Reading Board minutes and attending Group Audit and Risk Committee meetings;
• Considering remuneration incentive schemes and performance targets for directors and management including the adjusted
earnings and total property return targets; and
• Using analytical procedure to identify any unusual or unexpected relationships.
• Involvement of forensic specialists in the process of identifying potential fraud risks.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout
the audit.
As required by auditing standards and taking into account possible pressures to meet profit targets, we perform procedures to
address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular:
• the risk that disposals of trading property are recorded in the wrong accounting period;
• the risk that Group management may be in a position to make inappropriate accounting entries; and
• the risk of bias in accounting estimates and judgements such as significant assumptions used in the valuation of investment
properties, including estimated rental values and market based yields.
On this audit we do not believe there is a fraud risk related to revenue recognition, other than to the sales made close to the year
end as these could be recorded in the incorrect period, because of the relative simplicity of revenue streams. We did not identify any
additional fraud risks.
We also performed procedures including:
• Identifying journal entries to test using data analytical tools based on risk criteria and comparing the identified entries to
supporting documentation. These included those posted to unusual account combinations and those posted by senior finance
management; and
• Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
• Assessing whether sales close to year- have been recorded in the correct accounting period based on supporting documentation.
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements
from our general commercial and sector experience, through discussion with the directors and other management (as required by
auditing standards), and from inspection of the Group’s regulatory and legal correspondence and discussed with the directors and
other management the policies and procedures regarding compliance with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the
entity’s procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance
throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting
legislation (including related companies’ legislation), distributable profits legislation, taxation legislation and REIT legislation
and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial
statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation.
We identified the following areas as those most likely to have such an effect: health and safety, data protection laws, anti-bribery,
environmental and sustainability legislation, landlord and tenant legislation, fire safety legislation, property laws and building
legislations, social housing regulation and certain aspects of company legislation recognising the nature of the Group’s activities and
its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the
directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational
regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
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Financial statementsGovernanceStrategic report
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in accordance
with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards
would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material
misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance
with all laws and regulations.
7. We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with the financial statements.
Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion
or, except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work,
the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on
that work we have not identified material misstatements in the other information.
Strategic Report and Directors’ Report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic report and the directors’ report;
• in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ Remuneration Report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in
respect of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
• the directors’ confirmation within the Viability Statement on page 70 that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those that would threaten its business model, future performance,
solvency and liquidity;
• the Principal Risks and uncertainties disclosures describing these risks and how emerging risks are identified, and explaining how
they are being managed and mitigated; and
• the directors’ explanation in the Viability Statement of how they have assessed the prospects of the Group, over what period they
have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable
expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their
assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to review the Viability Statement, set out on page 70 under the UK Listing Rules. Based on the above
procedures, we have concluded that the above disclosures are materially consistent with the financial statements and our
audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit.
As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the absence of anything to report on these statements is not a
guarantee as to the Group’s and Company’s longer-term viability.
Independent auditor's report to the members of Grainger plc continued
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Annual Report and Accounts 2025
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporate
governance disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and
our audit knowledge:
• the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced
and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance,
business model and strategy;
• the section of the annual report describing the work of the Audit and Risk Committee, including the significant issues that the
Audit and Risk Committee considered in relation to the financial statements, and how these issues were addressed; and
• the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal
control systems.
We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions
of the UK Corporate Governance Code specified by the UK Listing Rules for our review. We have nothing to report in this respect.
8. We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 122, the Directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing
the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern;
and using the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of
assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report prepared under Disclosure Guidance
and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides no assurance over whether the annual financial report has
been prepared in accordance with those requirements.
10. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for
the opinions we have formed.
Craig Steven-Jennings (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square,
Canary Wharf,
London,
E14 5GL
19 November 2025
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Consolidated income statement
For the year ended 30 September
20252024
Notes£m£m
Group revenue
5
262.7
290.1
Net rental income
6
123.6
110.1
Profit on disposal of trading property
7
38.9
49.4
Loss on disposal of investment property
8
(1.6)
(5.8)
Gain/(loss) from financial interest in property assets
20
1.1
(1.3)
Fees and other income
9
6.1
8.1
Administrative expenses
(36.7)
(35.3)
Other expenses
(4.0)
(6.0)
Reversal of impairment/(impairment) of inventories to net realisable value
22
0.6
(0.1)
Operating profit
128.0
119.1
Net valuation gains/(losses) on investment property
16
29.5
(32.5)
Hedge ineffectiveness under IFRS 9
(8.5)
(6.6)
Finance costs
12
(45.4)
(41.8)
Finance income
12
2.7
3.0
Share of profit/(loss) of associates after tax
18
0.6
(0.4)
Share of loss of joint ventures after tax
19
(4.3)
(0.2)
Profit before tax
11
102.6
40.6
Tax charge
13
(23.6)
(9.4)
Tax credit arising from REIT conversion
13
123.6
–
Profit for the year attributable to the Shareholders of the Company
202.6
31.2
Basic earnings per share
15
27.4p
4.2p
Diluted earnings per share
15
27.3p
4.2p
The notes on pages 137 to 173 form part of the financial statements.
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Annual Report and Accounts 2025
Consolidated statement of comprehensive income
For the year ended 30 September
2025 2024
Notes£m£m
Profit for the year
3
202.6
31.2
Items that will not be transferred to the consolidated income statement:
Remeasurement of BPT Limited defined benefit pension scheme
28
(0.3)
(3.1)
Items that may be or are reclassified to the consolidated income statement:
Changes in fair value of cash flow hedges
(2.3)
(20.8)
Other comprehensive expense for the year before tax
(2.6)
(23.9)
Tax relating to components of other comprehensive income:
Tax relating to items that will not be transferred to the consolidated income statement
13
0.1
0.8
Tax relating to items that may be or are reclassified to the consolidated income statement
13
0.6
5.2
Total tax relating to components of other comprehensive income
0.7
6.0
Other comprehensive expense for the year after tax
(1.9)
(17.9)
Total comprehensive income for the year attributable to the Shareholders oftheCompany
200.7
13.3
The notes on pages 137 to 173 form part of the financial statements.
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Financial statementsGovernanceStrategic report
Consolidated statement of financial position
As at 30 September
2025 2024
Notes£m£m
ASSETS
Non-current assets
Investment property
16
3,059.4
2,996.8
Property, plant and equipment
17
9.2
10.6
Investment in associates
18
15.2
14.9
Investment in joint ventures
19
77.5
76.4
Financial interest in property assets
20
48.6
57.4
Retirement benefits
28
6.2
6.5
Deferred tax assets
13
4.6
6.1
Intangible assets
21
2.9
1.8
3,223.6
3,170.5
Current assets
Inventories – trading property
22
298.6
331.6
Investment property – held for sale
16
64.9
31.5
Trade and other receivables
23
79.2
90.9
Derivative financial instruments
27
14.1
19.8
Current tax assets
5.6
5.2
Cash and cash equivalents
27
85.8
93.2
548.2
572.2
Total assets
3,771.8
3,742.7
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings
26
1,515.1
1,592.9
Trade and other payables
25
5.7
6.3
Provisions for other liabilities and charges
24
0.7
1.0
Deferred tax liabilities
13
8.2
121.5
1,529.7
1,721.7
Current liabilities
Interest-bearing loans and borrowings
26
75.0
–
Trade and other payables
25
115.3
114.1
Provisions for other liabilities and charges
24
12.0
13.2
202.3
127.3
Total liabilities
1,732.0
1,849.0
NET ASSETS
2,039.8
1,893.7
EQUITY
Issued share capital
29
37.2
37.2
Share premium account
817.9
817.9
Merger reserve
31
20.1
20.1
Capital redemption reserve
0.3
0.3
Cash flow hedge reserve
31
2.7
4.4
Retained earnings
32
1,161.6
1,013.8
TOTAL EQUITY
2,039.8
1,893.7
The financial statements on pages 132 to 173 were approved by the Board of Directors on 19 November 2025 and were signed on
their behalf by:
Helen Gordon Rob Hudson
Director Director
Company registration number: 00125575
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Annual Report and Accounts 2025
Consolidated statement of changes in equity
Issued Share Capital Cash flow
share premium Merger redemption hedge Retained Total
capital account reserve reserve reserve earnings equity
Notes£m£m£m£m£m£m£m
Balance as at 1 October 2023
37.2
817.8
20.1
0.3
20.0
1,033.2
1,928.6
Profit for the year
–
–
–
–
–
31.2
31.2
Other comprehensive expense fortheyear
–
–
–
–
(15.6)
(2.3)
(17.9)
Total comprehensive income
–
–
–
–
(15.6)
28.9
13.3
Award of SAYE shares
–
0.1
–
–
–
–
0.1
Purchase of own shares
–
–
–
–
–
(0.1)
(0.1)
Share-based payments charge
–
–
–
–
–
2.8
2.8
Dividends paid
–
–
–
–
–
(51.0)
(51.0)
Total transactions with Shareholders recorded
directlyin equity
–
0.1
–
–
–
(48.3)
(48.2)
Balance as at 30 September 2024
37.2
817.9
20.1
0.3
4.4
1,013.8
1,893.7
Profit for the year
3
–
–
–
–
–
202.6
202.6
Other comprehensive expense fortheyear
–
–
–
–
(1.7)
(0.2)
(1.9)
Total comprehensive income
–
–
–
–
(1.7)
202.4
200.7
Purchase of own shares
29
–
–
–
–
–
(0.1)
(0.1)
Share-based payments charge
30
–
–
–
–
–
3.6
3.6
Dividends paid
14
–
–
–
–
–
(58.1)
(58.1)
Total transactions with Shareholders recorded
directlyin equity
–
–
–
–
–
(54.6)
(54.6)
Balance as at 30September2025
37.2
817.9
20.1
0.3
2.7
1,161.6
2,039.8
The notes on pages 137 to 173 form part of the financial statements.
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Financial statementsGovernanceStrategic report
Consolidated statement of cash flows
For the year ended 30 September
2025 2024
Notes£m£m
Cash flow from operating activities
Profit for the year
202.6
31.2
Depreciation and amortisation
11
1.7
1.5
Net valuation (gains)/losses on investment property
16
(29.5)
32.5
Net finance costs
12
42.7
38.8
Hedge ineffectiveness under IFRS 9
8.5
6.6
Share of loss of associates and joint ventures
18, 19
3.7
0.6
Loss on disposal of investment property
8
1.6
5.8
Share-based payments charge
30
3.6
2.8
Gain/(loss) from financial interest in property assets
20
(1.1)
1.3
Provisions for liabilities and charges
24
1.6
4.5
Tax (credit)/charge
13
(100.0)
9.4
Cash generated from operating activities before changes in working capital
135.4
135.0
Decrease/(increase) in trade and other receivables
6.2
(3.8)
Increase in trade and other payables
12.9
6.9
Decrease in inventories – trading property
33.0
60.6
Cash generated from operating activities
187.5
198.7
Interest paid
(53.3)
(52.6)
Interest received
2.7
3.0
Cash outflow from fire safety remediation work
(3.1)
–
Ta x p aid
(11.4)
(12.5)
Net cash inflow from operating activities
122.4
136.6
Cash flow from investing activities
Proceeds from sale of investment property
85.9
90.2
Proceeds from financial interest in property assets
20
9.9
8.3
Dividends received from associates
18
0.3
0.5
Investment in joint ventures
19
(3.7)
–
Loans advanced to joint ventures
19
(1.7)
(1.4)
Acquisition of investment property
16
(148.4)
(261.0)
Acquisition of property, plant and equipment and intangible assets
(1.4)
(4.3)
Net cash outflow from investing activities
(59.1)
(167.7)
Cash flow from financing activities
Award of SAYE shares
29
–
0.1
Purchase of own shares
29
(0.1)
(0.1)
Proceeds from new loans and borrowings
186.0
244.0
Payment of loan costs
(2.3)
(2.8)
Cash flows relating to new derivatives/settlement of derivatives
(5.0)
(1.9)
Repayment of loans and borrowings
(191.2)
(185.0)
Dividends paid
14
(58.1)
(51.0)
Net cash (outflow)/inflow from financing activities
(70.7)
3.3
Net decrease in cash and cash equivalents
(7.4)
(27.8)
Cash and cash equivalents at the beginning of the year
27
93.2
121.0
Cash and cash equivalents at the end of the year
27
85.8
93.2
The notes on pages 137 to 173 form part of the financial statements.
136
Grainger plc
Annual Report and Accounts 2025
1. Accounting policies
Accounting policies applicable throughout the financial statements are shown below. Accounting policies that are specific to a
component of the financial statements have been incorporated in the relevant note.
(a) Basis of preparation
Grainger plc is a company incorporated and domiciled in the UK. It is a public limited liability company listed on the London
Stock Exchange. The Group financial statements consolidate those of the Company and its subsidiaries, together referred to as
the ‘Group’, and equity account the Group’s interest in joint ventures and associates. The parent company financial statements
present information about the Company and not the Group. The Group elected to adopt REIT status from 8 September 2025.
As a consequence of the Group’s REIT status, UK corporation tax is not levied on the Group’s qualifying property rental business
profits, or gains from the sale of qualifying investment properties.
The Group financial statements have been prepared under the historical cost convention except for the following assets and
liabilities, and corresponding income statement accounts, which are stated at their fair value: investment property; derivative
financial instruments; and financial interest in property assets.
The Group financial statements have been prepared and approved by the Directors in accordance with UK-adopted international
accounting standards (IFRS) and applicable law. The Company has elected to prepare its parent company financial statements in
accordance with FRS 101 reduced disclosure framework; these are presented on pages 174 to 179.
The Group and Company financial statements are presented in millions of Pounds Sterling (£m) because that is the currency of
the principal economic environment in which the Group operates.
In preparing the financial statements, management has considered the potential impacts, risks and opportunities of climate
change, taking into account the relevant disclosures in the Strategic report, including those made in accordance with TCFD, and
considered the impact of the issues identified to ensure they are appropriately reflected into the financial statements. The impact
of climate change and of climate change related changes in markets and regulation are considered in the valuation of investment
properties. These issues are also considered when projecting future cash flows of the Group and in sensitivity analysis.
Management feel that climate-related issues are appropriately considered in these financial statements.
Going concern
The Directors are required to make an assessment of the Group’s ability to continue to trade as a going concern for the
foreseeable future. Given the macroeconomic conditions in which the Group is operating, the Directors have placed a particular
focus on the appropriateness of adopting the going concern basis in preparing the financial statements for the year ended
30 September 2025.
The financial position of the Group, including details of its financing and capital structure, is set out in the financial review
on pages 31 to 35. In making the going concern assessment, the Directors have considered the Group’s principal risks and
uncertainties (see pages 61 to 69) and their impact on financial performance. The Directors have assessed the future funding
commitments of the Group and compared these to the level of committed loan facilities and cash resources over the medium
term. In making this assessment, consideration has been given to compliance with borrowing covenants along with the
uncertainty inherent in future financial forecasts and, where applicable, severe but plausible sensitivities have been applied to
the key factors affecting financial performance for the Group.
The going concern assessment covers at least a year from the date of approval of the financial statements. It uses the same
forecasts considered by the Group for the purposes of the Viability Statement. The assessment considers a severe but plausible
downside scenario, reflecting the following key assumptions:
• Reducing PRS occupancy to 90%
• Rental growth reduced by 100bps to 2.0%
• Reducing property valuations by 10%, driven by rents yield, expansion or house price deflation
• Operating and development cost inflation of 10% p.a.
• An increase in SONIA of 2%.
The Group’s forecasts incorporate the likely impact of climate change and sustainability requirements including costs to deliver
our climate-related targets. This includes EPC upgrades and investing in energy efficient solutions for central heating systems.
No new financing is assumed in the assessment period, but existing facilities are assumed to remain available. Even in this severe
but plausible downside scenario, the Group has sufficient cash reserves, with the loan-to-value covenant remaining no higher
than 46% (facility maximum covenant ranges between 70% – 75%) and interest cover no lower than 2.69x (facility minimum
covenant ranges between 1.35x – 1.75x) for the period.
Based on these considerations, together with available market information and the Directors’ experience of the Group’s property
portfolio and markets, the Directors continue to adopt the going concern basis in preparing the accounts for the year ended
30 September 2025.
Notes to the financial statements
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Financial statementsGovernanceStrategic report
1. Accounting policies continued
(b) Basis of consolidation
i) Subsidiaries – Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date control ceases.
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to
the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
ii) Joint ventures and associates – Joint ventures are those entities over whose activities the Group has joint control, established
by contractual agreement. Associates are all entities over which the Group has significant influence but not control. Where the
Group owns less than 50% of the voting rights but acts as property and/or asset manager an assessment is made as to whether
or not the Group has de facto control over an investee. This includes a review of the Group’s rights relative to those of another
investor or investors and the ability the Group has to direct the investees’ relevant activities (further details are provided in Note
18 and Note 19).
Investments in joint ventures and associates are accounted for by the equity method of accounting and are initially recognised
at cost, and the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss after the date of
acquisition, less any distributions received. The joint venture and associate results for the 12 months to 30 September 2025 and
the financial position as at that date have been equity accounted in these financial statements.
The Group’s share of its joint ventures’ and associates’ post-acquisition profits or losses is recognised in the income statement,
and its share of post-acquisition movements in reserves is recognised in other comprehensive income. Where the Group’s interest
has been reduced to £nil, additional losses are provided for, and a liability is recognised, only to the extent that the Group has
incurred legal or constructive obligations or made payments on behalf of the joint venture or associate. The cumulative post-
acquisition movements are adjusted against the carrying amount of the investment.
Unrealised gains on transactions between the Group and its joint ventures and associates are eliminated to the extent of the
Group’s interest in joint ventures and associates. The accounting policies of joint ventures and associates have been changed
where necessary to ensure consistency with the policies adopted by the Group.
iii) Business combinations – At the time of acquisition, the Group considers whether each acquisition represents the acquisition of
a business or the acquisition of an asset. The Group accounts for an acquisition as a business combination where an integrated set
of activities are acquired in addition to the property. Consideration is also given to the concentration test permitted under IFRS 3
Business Combinations.
When the acquisition of a subsidiary does not represent a business, it is accounted for as an acquisition of assets and liabilities.
The cost of acquisition is allocated to the assets and liabilities acquired based on their fair values, and no goodwill or deferred tax
is recognised.
A business combination may also require the recognition of identifiable intangible assets by the Group. An intangible asset is
deemed to be identifiable if it is able to be separated or divided from the other assets acquired in the business combination and
sold, licensed or exchanged for something else of value, even if the intention to do so is not present on behalf of the Group.
Where an intangible asset is not individually separable, it may still meet the separability criterion if it is separable in combination
with a related contract, identifiable asset or liability.
Business combinations are accounted for using the acquisition method. The cost of the acquisition is measured as the fair value
of the assets given and equity instruments issued. Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair values at the date of acquisition. Goodwill represents the excess of
the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets, including intangible assets, of the
acquired entity at the date of acquisition. If the cost of the acquisition is less than the fair value of the net assets of the subsidiary
acquired, the difference is recognised directly in the income statement. Costs attributable to an acquisition of a business are
expensed in the consolidated income statement under the heading ‘Other expenses’.
Goodwill on acquisition of subsidiaries is included within this caption in the consolidated statement of financial position.
Goodwill on acquisition of joint ventures and associates is included in investments in joint ventures and associates.
Goodwill is allocated to cash generating units for the purpose of impairment testing and is tested annually for impairment and
carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the
disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Notes to the financial statements continued
138
Grainger plc
Annual Report and Accounts 2025
(c) Adoption of new and revised International Financial Reporting Standards and interpretations
The following new standards and amendments to standards were issued and adopted in the year and have no material impact
on the financial statements:
• Amendments to IAS 1 – Classification of liabilities as current or non-current;
• Amendments to IAS 1 – Non-current Liabilities with Covenants;
• Amendments to IAS 7 and IFRS 7 – Disclosures: Supplier finance arrangements;
• Amendments to IFRS 16 – Lease liability in a sale and leaseback;
The following new standards and amendments to standards have been issued but are not yet effective for the Group and have
not been early adopted:
• Amendments to IAS 21 – Lack of exchangeability;
• Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments;
• Annual Improvements to IFRS Accounting Standards – Volume 11;
• Amendments to IFRS 9 and IFRS 7 – Contracts Referencing Nature-dependent Electricity;
• IFRS 18 – Presentation and Disclosure in Financial Statements;
• IFRS 19 – Subsidiaries without Public Accountability: Disclosures;
• Amendments to IFRS 10 Consolidated Financial Statements;
• Amendments to IAS 28 Investments in Associates and Joint Ventures.
With the exception of IFRS 18, which the Group is still assessing and the impact to the financial statements is not yet
known, the application of these new standards and amendments are not expected to have a material impact on the Group’s
financial statements.
2. Critical accounting estimates and judgements
The Group’s significant accounting policies are stated in the relevant notes to the Group financial statements. The preparation of
financial statements requires management to exercise judgement in applying the Group’s accounting policies. It also requires the
use of estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and
assumptions, including those associated with climate change, are reviewed on an ongoing basis with revisions recognised in the
period in which the estimates are revised and in any future periods affected. The areas involving a higher degree of judgement or
complexity are set out below.
Estimates
1) Valuation of property assets
Residential trading property is carried in the statement of financial position at the lower of cost and net realisable value and
investment property is carried at fair value. The Group does, however, in its principal non-GAAP net asset value measures, EPRA
NRV, EPRA NTA and EPRA NDV, include trading property at market value. The adjustment in the value of trading property is the
difference between the statutory book value and its market value as set out in Note 4. For investment property, market value is the
same as fair value. In respect of trading properties, market valuation is the key assumption in determining the net realisable value of
those properties.
The results and the basis of each valuation and their impact on both the statutory financial statements and market value for the
Group’s non-GAAP net asset value measures are set out below. This includes details of key estimates and assumptions, along with
which an independent professional adviser has been utilised to determine valuations for each asset category. In all cases, forming
these valuations inherently includes elements of judgement and subjectivity with regard to the selection of unobservable inputs.
The methodology for the year end valuation process for capitalised yield-based valuations is consistent with the prior year. This is
considered to be the most appropriate method for valuing assets that are likely to be held as long-term investments and represents
81% of our property assets relating primarily to PRS blocks, including new build PRS assets. The remaining 19% of property assets
are valued based on current house prices, reflecting the prevailing market conditions as at the reporting date.
Where appropriate, sustainability and environmental matters are an integral part of the valuation approach. ‘Sustainability’ is taken
to mean the consideration of such matters as environment and climate change, health and wellbeing and corporate responsibility
that can or do impact on the valuation of an asset. In a valuation context, sustainability encompasses a wide range of physical,
social, environmental, and economic factors that can affect value. The range of issues includes key environmental risks, such as
flooding, energy efficiency and climate, as well as matters of design, configuration, accessibility, legislation, management, and
fiscal consideration.
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Financial statementsGovernanceStrategic report
2. Critical accounting estimates and judgements continued
When determining property asset values, management have included an estimate for fire safety works where there is a legal or
constructive obligation or where required works affect the market value of the property. Property asset values reflect the best
estimate of the cost of the required works based on known costs and quotations where available. They do not take into account any
potential recovery of costs from third parties.
% of properties for
PRS Reversionary Other Total which external valuer
Notes £m £m £m
£m
Valuer
provides valuation
Trading property
1.6
265.7
31.3
298.6
Investment property
1
3,110.1
14.2
–
3,124.3
Financial asset (CHARM)
–
48.6
–
48.6
Total statutory book value
3,111.7
328.5
31.3
3,471.5
Trading property
Residential
(i)
1.6
489.2
–
490.8
Allsop LLP
77%
Developments
(ii)
–
–
50.2
50.2
CBRE Limited
94%
Total trading property at market value
1.6
489.2
50.2
541.0
Investment property Allsop LLP/
Residential
(i)
603.7
14.2
–
617.9
CBRE Limited
99%
Developments
(ii)
46.0
–
–
46.0
CBRE Limited
94%
New build PRS
(iii)
2,086.5
–
–
2,086.5
CBRE Limited
100%
Affordable housing
(iv)
229.0
–
–
229.0
Allsop LLP
100%
Tricomm Housing
(v)
144.9
–
–
144.9
Allsop LLP
100%
Total investment property
3,110.1
14.2
–
3,124.3
Financial asset (CHARM)
2
(vi)
–
48.6
–
48.6
Allsop LLP
100%
Total assets at market value
3,111.7
552.0
50.2
3,713.9
Statutory book value
3,111.7
328.5
31.3
3,471.5
Market value adjustment
3
–
223.5
18.9
242.4
Total assets at market value
4
3,111.7
552.0
50.2
3,713.9
Net revaluation gain recognised in the income
statement for wholly-owned properties
29.5
Net revaluation loss relating to joint ventures
and associates
5
(vii)
(3.5)
Net revaluation gain recognised in the year
5
26.0
1. Includes investment property – held for sale.
2. Allsop LLP provide vacant possession values used by the Directors to value the financial asset in accordance with the accounting policy set out in Note 20.
3. The market value adjustment is the difference between the statutory book value and the market value of the Group’s properties. Refer to Note 4 for market value net asset measures.
4. Excludes £92.7m (2024: £91.3m) of investments in JV's and associates.
5. Includes the Group’s share of joint ventures and associates revaluation loss after tax.
i) Residential
Trading property: The Group’s own in-house qualified team provided a vacant possession value for the majority of the Group’s
residential properties as at 30 September 2025. A structured sample of these in-house valuations was reviewed by Allsop LLP,
an external independent valuer. Valuing the large number of properties in this portfolio is a significant task. For this reason it is
undertaken on an external inspection basis only. Invariably, when the in-house valuations are compared with those of the external
valuer, around 84% (2024: 70%) of the valuations are within a small acceptable tolerance. Where the difference is more significant,
this is discussed with the valuer to determine the reasons for the difference. Typically, the reasons vary, but it could be, for
example, that further or better information about internal condition is available or that respective valuers have placed a different
interpretation on comparable sales. Once such reasons have been identified, the Group and the valuer agree the appropriate
valuation that should be adopted as the Directors’ Valuation.
Allsop LLP has provided the Directors with the following opinion on the Directors’ Valuation:
Property held in the residential portfolio was valued as at 30 September 2025 by Grainger’s in-house surveyors. These valuations
were reviewed and approved by the Directors. Allsop LLP has undertaken a comprehensive review of the Directors’ Valuation
and they are satisfied with the process by which the in-house valuations were conducted. Allsop LLP valued approximately 85%
(2024: 86%) of the residential portfolio, independently of the Group. Based on the results of that review, Allsop LLP has concluded
that they have a high degree of confidence in those Directors’ Valuations.
Allsop LLP also recommends a discount to apply to the vacant possession valuations to establish the market value of each property,
with the discounts ranging from 5.0% to 17.5% (2024: 5.0% to 17.5%). The discounts are established by tenancy type and region and
are based on evidence gathered by Allsop LLP from recent transactional market evidence. The Directors have adopted the discounts
recommended by Allsop LLP.
Notes to the financial statements continued
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Grainger plc
Annual Report and Accounts 2025
Investment property: PRS blocks are valued on an income capitalisation basis, having regard to prevailing market conditions
and evidence, and with close regard to the relativity between the market value and the aggregate vacant possession value.
The valuation has been prepared in accordance with RICS Professional Valuation Standards where fair value is the same as
market value. CBRE Limited valued 55% (2024: 56%) of residential investment property, with Allsop LLP valuing 11% (2024: 9%).
Gross yields adopted in the valuations broadly range from 5.5% to 9.3% (2024: 5.7% to 8.8%).
The remaining 34% (2024: 35%) of residential property is valued in line with the trading property approach, with older properties
and groups of individual units valued by Allsop LLP on a discount to vacant possession value basis on the assumption these assets
would be sold individually. Residential reversionary assets discounts adopted ranged from 10.0% to 17.5% (2024: 10.0% to 17.5%),
whilst the residential PRS discount to vacant possession value was 5% (2024: 5%).
ii) Developments
Trading property: Development trading property of £50.2m (2024: £41.6m) relates to the Group’s legacy strategic land assets.
The current market value has been assessed by CBRE Limited. Their valuation, representing 94% (2024: 94%) of total value, is
on the basis of fair value as defined in the RICS Professional Valuation Standards where fair value is the same as market value.
The remaining 6% (2024: 6%) of the portfolio is a Directors’ Valuation.
Investment property: CBRE Limited assessed the fair value of the direct development schemes in the course of construction.
These schemes are valued on an income capitalisation basis, with gross yields adopted in the valuations ranging from 5.9% to
6.1% (2024: 5.1% to 6.2%). As the assets are under construction, the valuation takes into account estimated costs required to
reach completion.
iii) New build PRS – CBRE Limited assessed the fair value of the completed assets and assets in the course of construction.
The principal approach was to value the properties on an income capitalisation basis, having regard to prevailing market conditions
and evidence, and with close regard to the relativity between the market value and the aggregate vacant possession value.
Where applicable, estimated costs required to complete construction have been taken into account. The valuation has been
prepared in accordance with RICS Professional Valuation Standards where fair value is the same as market value.
The primary unobservable input within the valuation relates to assumptions for gross yields adopted with respect to comparable
market evidence, with gross yields ranging from 6.0% to 7.1% (2024: 6.0% to 7.2%) across the portfolio. For assets under
construction, a discount to market value to reflect stabilisation and construction risk in the remaining build process is applied on an
asset by asset basis depending on stage of completion.
iv) Affordable housing – For properties let on affordable rents, social rents or sold on shared ownership leases, Allsop LLP valued
the assets on the basis of Existing Use Value for Social Housing (‘EUV-SH’) in line with RICS Global Standards. Properties subject to
intermediate rents have been valued at market value as these assets are not restricted as social housing in perpetuity.
The primary unobservable input within the valuation relates to assumptions for the income capitalisation rate of net rent, which is
determined on a tenure basis. The gross yields adopted for 30 September 2025 valuations range from 4.8% to 5.8% (2024: 4.5% to
5.6%).
v) Tricomm Housing – Allsop LLP provided an investment valuation as at 30 September 2025 for the property assets owned by
the Group and let under a long-term lease arrangement with the Secretary of State for Defence under a PFI project agreement.
The investment valuation is in accordance with RICS Professional Valuation Standards, and is based on a discounted cash
flow model.
Significant unobservable inputs within the valuation relate to assumptions for house price inflation and the discount rates to apply
to the cash flows. The assumptions adopted for house price inflation are: 2.5% in 2026, 3.4% in 2027, and 4.2% in 2028. The discount
rates applied to the cash flows range between 4.9% (2024: 4.9%) non-core MOD income and 9.0% (2024: 7.5%) on reversion.
vi) Financial asset (CHARM) – The valuation methodology adopted for the CHARM asset is set out in Note 20 to the financial
statements. CHARM is valued using projected cash flows and applies key unobservable inputs being house price inflation and
discount rates.
As such it is classified as a level 3 asset (Note 27). The assumptions used to value the asset reflect an increase in house prices of
between 2.1% and 3.7% p.a. (2024: 3.5% and 4.2%). A discount rate of 5.0% (2024: 4.5%) has been applied to the interest income
and a rate of 7.25% (2024: 7.5%) has been applied to the projected proceeds from sales of the underlying properties, reflecting the
risk profile of each individual income stream.
Credit risk arises from the credit exposure relating to cash receipts from the financial instrument. All of the cash receipts are payable
by the Church Commissioners, a counterparty considered to be low risk as they have no history of past due or impaired amounts
and there are no past due amounts outstanding at the year end.
vii) Joint ventures and associates – For Vesta LP, CBRE Limited valued the asset on the same basis described for completed new
build PRS assets. Property assets in other joint ventures including the Connected Living London Group are held at fair value and
Lewisham Grainger Holdings LLP are held at cost reflecting the current early stages of each development.
The Directors consider the valuations provided by external valuers to be representative of fair value.
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Financial statementsGovernanceStrategic report
2. Critical accounting estimates and judgements continued
As required by RICS Professional Valuation Standards, the external valuers in the UK mentioned above have made full disclosure
of the extent and duration of their work for, and fees earned by them from, the Group, which in all cases are less than 5% of their
total fees.
Sensitivity analysis
Changes to key assumptions could impact both the income and financial position of the Group. The impact of changes to key
assumptions on the valuation of property assets and the net realisable value of trading property is considered using a range of
reasonable changes. The Group measures its market risk exposure internally by running various sensitivity analyses. The Directors
consider that the range of potential movements set out in the table below represent reasonably possible changes.
Increase
Decrease
Statement of Statement of
Income financial Income financial
statement position statement position
impact impact impact impact
£m £m £m £m
Residential (trading property)
10.0% change in house prices
(NRV provision impact)
2.3
2.3
(3.8)
(3.8)
Residential (investment property)
1
0.50% change in gross yield
(28.5)
(28.5)
33.1
33.1
Residential (investment property)
1
5.0% change in net rental income
20.7
20.7
(20.7)
(20.7)
Developments (investment property)
1
0.50% change in gross yield
(21.4)
(21.4)
37.1
37.1
Developments (investment property)
1
5.0% change in net rental income
20.4
20.4
(20.4)
(20.4)
New build PRS
0.50% change in gross yield
(158.5)
(158.5)
185.8
185.8
New build PRS
5.0% change in net rental income
108.3
108.3
(108.3)
(108.3)
Affordable housing
0.50% change in gross yield
(20.6)
(20.6)
25.1
25.1
Affordable housing
5.0% change in net rental income
11.5
11.5
(11.5)
(11.5)
Joint ventures and associates
2
0.50% change in gross yield
(26.2)
(26.2)
30.8
30.8
Joint ventures and associates
2
5.0% change in net rental income
17.3
17.3
(17.3)
(17.3)
Tricomm Housing
10.0% change in house prices
1.7
1.7
(1.7)
(1.7)
Tricomm Housing
0.75% change in discount rate
(2.8)
(2.8)
2.8
2.8
Financial asset (CHARM)
10.0% change in house prices
4.0
4.0
(4.0)
(4.0)
Financial asset (CHARM)
0.75% change in discount rate
(1.9)
(1.9)
2.7
2.7
1. Includes investment property – held for sale.
2. Joint ventures and associates includes the Group’s share of property revaluation movements.
Judgements
1) Distinction between investment and trading property
The Group considers the intention at the outset when each property is acquired in order to classify the property as either an
investment or a trading property. Where the intention is either to trade the property or where the property is held for immediate
sale upon receiving vacant possession within the ordinary course of business, the property is classified as trading property.
Where the intention is to hold the property for its long-term rental yield and/or capital appreciation, the property is classified as an
investment property. The classification of the Group’s properties is a significant judgement which directly impacts the statutory net
asset position, as trading properties are held at the lower of cost and net realisable value, whilst investment properties are held at
fair value, with gains or losses taken through the consolidated income statement.
The Group continually reviews properties for changes in use that could change the classification. A change in use occurs if property
meets, or ceases to meet, the definition of investment property which is more than a change in management’s intentions. The fact
patterns associated with changes in the way in which properties are utilised are considered on a case by case basis and to the extent
that a change in use is established, property reclassifications are reflected appropriately.
There have been no property reclassifications in the year.
Notes to the financial statements continued
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Annual Report and Accounts 2025
3. Analysis of profit before tax
The table below details adjusted earnings. The metric is utilised as a key measure to aid understanding of the performance of the
continuing business and excludes valuation movements and other adjustments, which do not form part of the normal ongoing
revenue or costs of the business and, either individually or in aggregate, are material to the reported Group results.
2025
2024
Other Adjusted Other Adjusted
£m
Statutory
Valuation
adjustments
earnings
Statutory
Valuation
adjustments earnings
Group revenue
262.7
–
–
262.7
290.1
–
–
290.1
Net rental income
123.6
–
–
123.6
110.1
–
–
110.1
Profit on disposal of trading property
38.9
–
–
38.9
49.4
–
–
49.4
Loss on disposal of investment property
(1.6)
–
–
(1.6)
(5.8)
–
–
(5.8)
Income/(expense) from financial interest
in property assets
1.1
3.2
–
4.3
(1.3)
5.9
–
4.6
Fees and other income
6.1
–
–
6.1
8.1
–
–
8.1
Administrative expenses
(36.7)
–
–
(36.7)
(35.3)
–
–
(35.3)
Other expenses
(4.0)
–
3.3
(0.7)
(6.0)
–
5.0
(1.0)
Reversal of impairment/(impairment) of
inventories to net realisable value
0.6
(0.6)
–
–
(0.1)
0.1
–
–
Operating profit
128.0
2.6
3.3
133.9
119.1
6.0
5.0
130.1
Net valuation gains/(losses)
on investment property
29.5
(29.5)
–
–
(32.5)
32.5
–
–
Hedge ineffectiveness under IFRS 9
(8.5)
–
8.5
–
(6.6)
–
6.6
–
Finance costs
(45.4)
–
–
(45.4)
(41.8)
–
–
(41.8)
Finance income
2.7
–
–
2.7
3.0
–
–
3.0
Share of profit/(loss) of associates after tax
0.6
(0.2)
–
0.4
(0.4)
0.9
–
0.5
Share of loss of joint ventures after tax
(4.3)
3.7
–
(0.6)
(0.2)
–
–
(0.2)
Profit before tax
102.6
(23.4)
11.8
91.0
40.6
39.4
11.6
91.6
Tax credit/(charge)
100.0
(9.4)
Profit for the year attributable
to the owners of the Company
202.6
31.2
Basic adjusted earnings per share
9.3p
9.3p
Diluted adjusted earnings per share
9.3p
9.3p
Profit before tax in the adjusted earnings columns above of £91.0m (2024: £91.6m) is the adjusted earnings of the Group.
Adjusted earnings per share assumes tax of £22.2m (2024: £22.9m) in line with the Group's current year tax rate of 24.4%, adjusted
for the effect of REIT conversion on 8 September 2025 (2024: 25.0%), divided by the weighted average number of shares as
shown in Note 15. The Group’s IFRS statutory earnings per share is also detailed in Note 15. The classification of amounts as other
adjustments is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior to
issuing the financial statements. Included in other adjustments are £1.9m of fire safety provisions (2024: £5.0m), REIT conversion
costs of £0.6m (2024: £nil), aborted acquisition costs of £0.8m (2024: £nil) and hedge ineffectiveness under IFRS 9 of £8.5m
(2024: £6.6m).
4. Segmental information
(a) Accounting policy
IFRS 8, Operating Segments requires operating segments to be identified based upon the Group’s internal reporting to the Chief
Operating Decision Maker (‘CODM’) so that the CODM can make decisions about resources to be allocated to segments and
assess their performance. The Group’s CODM are the Executive Directors.
The two significant segments for the Group are PRS and Reversionary. The PRS segment includes stabilised PRS assets as well as
PRS under construction through direct development and forward funding arrangements, both for wholly-owned assets and the
Group’s interest in joint ventures and associates as relevant. The Reversionary segment includes regulated tenancies, as well as
CHARM. The Other segment includes legacy strategic land and development arrangements, along with administrative expenses.
The key operating performance measure of profit or loss used by the CODM is adjusted earnings before tax, valuation and
other adjustments.
The principal net asset value (NAV) measure reviewed by the CODM is EPRA NTA which is considered to be the most relevant,
and therefore the primary NAV measure for the Group. EPRA NTA reflects the tax that will crystallise in relation to the trading
portfolio, whilst excluding the volatility of mark to market movements on fixed rate debt and derivatives which are unlikely to be
realised. Other NAV measures include EPRA NRV and EPRA NDV which we report alongside EPRA NTA. A full description and
reconciliation of these measures is included in the EPRA performance measures section on pages 180 to 183 of this report.
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Financial statementsGovernanceStrategic report
4. Segmental information continued
Information relating to the Group’s operating segments is set out in the tables below. The tables distinguish between adjusted
earnings on a segmental basis. Valuation and other adjustments are not reviewed by the CODM on a segmental basis and should be
read in conjunction with Note 3.
2025 Income statement
£m
PRS
Reversionary
Other
Total
Group revenue
162.0
98.7
2.0
262.7
Segment revenue – external
Net rental income
111.6
10.9
1.1
123.6
Profit on disposal of trading property
0.2
38.7
–
38.9
Loss on disposal of investment property
(1.7)
0.1
–
(1.6)
Income from financial interest in property assets
–
4.3
–
4.3
Fees and other income
5.6
–
0.5
6.1
Administrative expenses
–
–
(36.7)
(36.7)
Other expenses
(0.1)
–
(0.6)
(0.7)
Net finance costs
(35.8)
(6.2)
(0.7)
(42.7)
Share of trading loss of joint ventures and associates after tax
0.2
–
(0.4)
(0.2)
Adjusted earnings
80.0
47.8
(36.8)
91.0
Valuation movements
26.6
(3.2)
–
23.4
Other adjustments
(1.9)
–
(9.9)
(11.8)
Profit before tax
104.7
44.6
(46.7)
102.6
The 'Other' category incorporates non-core operating activity and the cost of support functions.
A reconciliation from adjusted earnings to EPRA earnings is detailed in the table below, with further details shown in the EPRA
performance measures on page 180:
£m
PRS
Reversionary
Other
Total
Adjusted earnings
80.0
47.8
(36.8)
91.0
Profit on disposal of trading property
(0.2)
(38.7)
–
(38.9)
Loss on disposal of investment property
1.7
(0.1)
–
1.6
EPRA earnings
81.5
9.0
(36.8)
53.7
2024 Income statement
£m
PRS
Reversionary
Other
Total
Group revenue
150.3
112.5
27.3
290.1
Segment revenue – external
Net rental income
97.6
11.5
1.0
110.1
Profit on disposal of trading property
(1.3)
48.1
2.6
49.4
Loss on disposal of investment property
(5.9)
0.1
–
(5.8)
Income from financial interest in property assets
–
4.6
–
4.6
Fees and other income
7.5
–
0.6
8.1
Administrative expenses
–
–
(35.3)
(35.3)
Other expenses
(0.4)
–
(0.6)
(1.0)
Net finance costs
(31.3)
(6.6)
(0.9)
(38.8)
Share of trading profit of joint ventures and associates after tax
0.3
–
–
0.3
Adjusted earnings
66.5
57.7
(32.6)
91.6
Valuation movements
(33.5)
(5.9)
–
(39.4)
Other adjustments
(5.0)
–
(6.6)
(11.6)
Profit before tax
28.0
51.8
(39.2)
40.6
A reconciliation from adjusted earnings to EPRA earnings is detailed in the table below:
£m
PRS
Reversionary
Other
Total
Adjusted earnings
66.5
57.7
(32.6)
91.6
Profit on disposal of trading property
1.3
(48.1)
(2.6)
(49.4)
Loss on disposal of investment property
5.9
(0.1)
–
5.8
EPRA earnings
73.7
9.5
(35.2)
48.0
Notes to the financial statements continued
144
Grainger plc
Annual Report and Accounts 2025
Segmental assets
The net asset value measures reviewed by the CODM are EPRA NRV, EPRA NTA and EPRA NDV. These measures reflect the
current market value of trading property owned by the Group rather than the lower of historical cost and net realisable value.
These measures are considered to be a more relevant reflection of the value of the assets owned by the Group.
EPRA NRV is the Group’s statutory net assets plus the adjustment required to increase the value of trading stock from its statutory
accounts value of the lower of cost and net realisable value to its market value. In addition, the statutory statement of financial
position amounts for both deferred tax on property revaluations and derivative financial instruments net of deferred tax, including
those in joint ventures and associates, are added back to statutory net assets. Finally, the market value of Grainger plc shares owned
by the Group are added back to statutory net assets.
EPRA NTA assumes that entities buy and sell assets, thereby crystallising certain levels of deferred tax liabilities. For the Group,
deferred tax in relation to revaluations of its trading portfolio is taken into account by applying the expected rate of tax to the
adjustment that increases the value of trading stock from its statutory accounts value of the lower of cost and net realisable value,
to its market value. The measure also excludes all intangible assets on the statutory balance sheet, including goodwill.
EPRA NDV reverses some of the adjustments made between statutory net assets, EPRA NRV and EPRA NTA. All of the
adjustments for the value of derivative financial instruments net of deferred tax, including those in joint ventures and associates,
are reversed. The adjustment for the deferred tax on investment property revaluations excluded from EPRA NRV and EPRA NTA
are also reversed, as is the intangible adjustment in respect of EPRA NTA, except for goodwill which remains excluded. In addition,
adjustments are made to net assets to reflect the fair value, net of deferred tax, of the Group’s fixed rate debt.
Total Accounting Return of 2.6% is calculated from the closing EPRA NTA of 298p per share plus the dividend paid of 7.55p per share
in the year, divided by the opening EPRA NTA of 298p per share.
These measures are set out below by segment along with a reconciliation to the summarised statutory statement of financial
position. Additional EPRA disclosures are included on pages 180 to 183.
2025 Segment net assets
£m
PRS
Reversionary
Other
Total
Pence per share
Total segment net assets (statutory)
1,911.1
104.3
24.4
2,039.8
274
Total segment net assets (EPRA NRV)
1,915.1
327.5
40.5
2,283.1
307
Total segment net assets (EPRA NTA)
1,912.1
271.7
32.8
2,216.6
298
Total segment net assets (EPRA NDV)
1,911.1
271.7
95.2
2,278.0
307
2025 Reconciliation of EPRA NAV measures
Adjustments to Adjustments to Adjustments
market value, deferred and to derivatives,
Statutory deferred tax EPRA NRV contingent tax EPRA NTA fixed rate debt EPRA NDV
£m balance sheet and derivatives balance sheet and intangibles balance sheet and intangibles balance sheet
Investment property
1
3,124.3
–
3,124.3
–
3,124.3
–
3,124.3
Investment in joint ventures and
associates
92.7
–
92.7
–
92.7
–
92.7
Financial interest in property assets
48.6
–
48.6
–
48.6
–
48.6
Inventories – trading property
298.6
242.4
541.0
–
541.0
–
541.0
Cash and cash equivalents
85.8
–
85.8
–
85.8
–
85.8
Other assets
121.8
(3.1)
118.7
(2.9)
115.8
(3.3)
112.5
Total assets
3,771.8
239.3
4,011.1
(2.9)
4,008.2
(3.3)
4,004.9
Interest-bearing loans and borrowings
(1,590.1)
–
(1,590.1)
–
(1,590.1)
65.7
(1,524.4)
Deferred and contingent tax liabilities
(8.2)
4.0
(4.2)
(63.6)
(67.8)
(1.0)
(68.8)
Other liabilities
(133.7)
–
(133.7)
–
(133.7)
–
(133.7)
Total liabilities
(1,732.0)
4.0
(1,728.0)
(63.6)
(1,791.6)
64.7
(1,726.9)
Net assets
2,039.8
243.3
2,283.1
(66.5)
2,216.6
61.4
2,278.0
1. Includes investment property – held for sale.
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Financial statementsGovernanceStrategic report
4. Segmental information continued
In order to provide further analysis, the following table sets out EPRA NTA by segment:
£m
PRS
Reversionary
Other
Total
EPRA NTA
Investment property
1
3,110.1
14.2
–
3,124.3
Investment in joint ventures and associates
75.0
–
17.7
92.7
Financial interest in property assets
–
48.6
–
48.6
Inventories – trading property
1.6
489.2
50.2
541.0
Cash and cash equivalents
71.9
12.4
1.5
85.8
Other assets
59.9
6.0
49.9
115.8
Total segment EPRA NTA assets
2
3,318.5
570.4
119.3
4,008.2
Interest-bearing loans and borrowings
(1,331.8)
(230.2)
(28.1)
(1,590.1)
Deferred and contingent tax liabilities
(3.0)
(55.8)
(9.0)
(67.8)
Other liabilities
(71.6)
(12.7)
(49.4)
(133.7)
Total segment EPRA NTA liabilities
(1,406.4)
(298.7)
(86.5)
(1,791.6)
Net EPRA NTA assets
1,912.1
271.7
32.8
2,216.6
1. Includes investment property – held for sale.
2. Within EPRA NTA assets are £3,806.6m relating to property.
2024 Segment net assets
£m
PRS
Reversionary
Other
Total
Pence per share
Total segment net assets (statutory)
1,757.6
117.5
18.6
1,893.7
255
Total segment net assets (EPRA NRV)
1,873.5
386.9
35.5
2,295.9
309
Total segment net assets (EPRA NTA)
1,870.3
319.1
28.7
2,218.1
298
Total segment net assets (EPRA NDV)
1,757.3
319.1
118.5
2,194.9
295
2024 Reconciliation of EPRA NAV measures
Adjustments to Adjustments to Adjustments
market value, deferred and to derivatives,
Statutory deferred tax EPRA NRV contingent tax EPRA NTA fixed rate debt EPRA NDV
£m balance sheet and derivatives balance sheet and intangibles balance sheet and intangibles balance sheet
Investment property
1
3,028.3
–
3,028.3
–
3,028.3
–
3,028.3
Investment in joint ventures
and associates
91.3
–
91.3
–
91.3
–
91.3
Financial interest in property assets
57.4
–
57.4
–
57.4
–
57.4
Inventories – trading property
331.6
288.5
620.1
–
620.1
–
620.1
Cash and cash equivalents
93.2
–
93.2
–
93.2
–
93.2
Other assets
140.9
(3.2)
137.7
(1.8)
135.9
21.1
157.0
Total assets
3,742.7
285.3
4,028.0
(1.8)
4,026.2
21.1
4,047.3
Interest-bearing loans and borrowings
(1,592.9)
–
(1,592.9)
–
(1,592.9)
98.1
(1,494.8)
Deferred and contingent tax liabilities
(121.5)
116.9
(4.6)
(76.0)
(80.6)
(142.4)
(223.0)
Other liabilities
(134.6)
–
(134.6)
–
(134.6)
–
(134.6)
Total liabilities
(1,849.0)
116.9
(1,732.1)
(76.0)
(1,808.1)
(44.3)
(1,852.4)
Net assets
1,893.7
402.2
2,295.9
(77.8)
2,218.1
(23.2)
2,194.9
1. Includes investment property – held for sale.
In order to provide further analysis, the following table sets out EPRA NTA by segment:
£m
PRS
Reversionary
Other
Total
EPRA NTA
Investment property
1
3,011.9
16.4
–
3,028.3
Investment in joint ventures and associates
73.3
–
18.0
91.3
Financial interest in property assets
–
57.4
–
57.4
Inventories – trading property
3.9
574.6
41.6
620.1
Cash and cash equivalents
75.4
15.9
1.9
93.2
Other assets
67.2
6.7
62.0
135.9
Total segment EPRA NTA assets
2
3,231.7
671.0
123.5
4,026.2
Interest-bearing loans and borrowings
(1,287.5)
(271.2)
(34.2)
(1,592.9)
Deferred and contingent tax liabilities
(3.2)
(67.8)
(9.6)
(80.6)
Other liabilities
(70.7)
(12.9)
(51.0)
(134.6)
Total segment EPRA NTA liabilities
(1,361.4)
(351.9)
(94.8)
(1,808.1)
Net EPRA NTA assets
1,870.3
319.1
28.7
2,218.1
1. Includes investment property – held for sale.
2. Within EPRA NTA assets are £3,797.1m relating to property.
Notes to the financial statements continued
146
Grainger plc
Annual Report and Accounts 2025
5. Group revenue
Accounting policy
Revenue is measured at the fair value of the consideration received or receivable and is stated net of incentives, sales taxes and
value added taxes. Gross proceeds from disposal of trading property and fees and other income are recognised in accordance
with IFRS 15. Gross rental income is recognised in accordance with IFRS 16.
2025 2024
£m £m
Gross rental income (Note 6)
170.2
154.8
Gross proceeds from disposal of trading property (Note 7)
86.4
127.2
Fees and other income (Note 9)
6.1
8.1
262.7
290.1
6. Net rental income
Accounting policy
Gross rental income is recognised on a straight-line basis over the lease term on an accruals basis. Directly attributable property
management, repair and maintenance costs are deducted from gross rental income to determine net rental income.
2025 2024
£m £m
Gross rental income
170.2
154.8
Property operating expenses
(46.6)
(44.7)
123.6
110.1
Net rental income presented above reflects the total net rental income across all assets of the Group. Within this, gross rental
income of £149.1m and property operating expenses of £37.3m generating gross to net performance of 25.0% related to the
Group’s stabilised assets (2024: gross rental income of £140.8m and property operating expenses of £35.2m generating stabilised
gross to net performance of 25.0%).
7. Profit on disposal of trading property
Accounting policy
Property is regarded as sold when performance obligations have been met and control has been transferred to the buyer. This is
generally deemed to be on legal completion as at this point the buyer is able to control the use of the property and has rights
to any cash inflows or outflows in respect of the property. Profits or losses are calculated by reference to the carrying value of
the property sold. For a development property, this is assessed through the use of a gross margin for the site as a whole or such
other basis that provides an appropriate allocation of costs.
2025 2024
£m £m
Gross proceeds from disposal of trading property
86.4
127.2
Selling costs
(2.0)
(2.3)
Net proceeds from disposal of trading property
84.4
124.9
Carrying value of trading property sold (Note 22)
(45.5)
(75.5)
38.9
49.4
Nil contract revenue has been recognised in the period (2024: £nil).
8. Loss on disposal of investment property
Accounting policy
Investment property is regarded as sold when the recipient obtains control of the property, which is generally deemed to be on
legal completion. Profits or losses are calculated by reference to the carrying value of the property sold.
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8. Loss on disposal of investment property continued
2025 2024
£m £m
Gross proceeds from disposal of investment property
82.5
147.1
Selling costs
(2.2)
(3.8)
Net proceeds from disposal of investment property
1
80.3
143.3
Carrying value of investment property sold (Note 16)
(81.9)
(149.1)
(1.6)
(5.8)
1. Net proceeds from disposal of investment property include amounts held as restricted deposits at the reporting date. Where disposals are made of properties which are included in facility covenant
arrangements the funds cannot be released until certain covenant tests are met at the next test date.
9. Fees and other income
2025 2024
£m £m
Property and asset management fee income
2.3
2.6
Other sundry income
3.8
5.5
6.1
8.1
Included within other sundry income in the current year is £3.6m (2024: £5.2m) liquidated and ascertained damages (‘LADs’)
recorded to compensate the Group for lost rental income resulting from the delayed completion of construction contracts.
10. Employees
2025 2024
£m £m
Wages and salaries
26.0
24.8
Social security costs
2.9
2.8
Other pension costs – defined contribution scheme (Note 28)
1.9
1.7
Share-based payments (Note 30)
3.6
2.8
34.4
32.1
The average monthly number of Group employees during the year (including Executive Directors) was:
2025 2024
Number Number
Operations
255
248
Shared services
102
105
Group
13
13
370
366
Details of Directors’ remuneration, including pension costs, share options and interests in the LTIP, are provided in the audited
section of the Remuneration Committee report on pages 110 to 115.
Information about benefits of Directors
The following amounts are disclosed in accordance with Schedule 5 of the Large and Medium-Sized Companies and Groups
(Accounts and Reports) Regulations 2008.
2025 2024
£’000 £’000
Aggregate Directors’ remuneration
2,951
3,155
Aggregate amount of gains on exercise of share options
(303)
–
Aggregate amount of money or assets received or receivable under scheme interests
602
553
3,250
3,708
None of the Directors (2024: none) were members of the Group defined benefit scheme or the defined contribution scheme.
Key management compensation
2025 2024
£m £m
Short-term employee benefits
8.8
8.3
Post-employment benefits
0.6
0.6
Share-based payments
3.3
2.6
12.7
11.5
Key management figures shown above include Executive and Non-Executive Directors and all internal Directors
of specific functions.
Notes to the financial statements continued
148
Grainger plc
Annual Report and Accounts 2025
11. Profit before tax
2025 2024
£m £m
Profit before tax is stated after charging:
Depreciation of property, plant and equipment
1.5
1.5
Amortisation of IT software
0.2
0.1
Bad debt expense
0.6
0.6
Operating lease payments
0.2
0.1
Auditor’s remuneration (see below)
0.7
0.7
The remuneration paid to KPMG, the Group’s auditor, is disclosed below:
Auditor’s remuneration
2025 2024
£’000 £’000
Services as auditor to the Company
378
363
Services as auditor to Group subsidiaries
260
250
Group audit fees
638
613
Audit related assurance services
68
67
Non-audit fees
68
67
Total fees
706
680
The relevant proportion of amounts paid to the auditor for the audit of the financial statements of joint ventures is £24,000
(2024: £23,000).
12. Finance costs and income
2025 2024
£m £m
Finance costs
Bank loans and mortgages
20.3
18.6
Non-bank financial institution
8.4
8.4
Corporate bond
22.9
22.9
Interest capitalised under IAS 23
(10.4)
(11.6)
Other finance costs
4.2
3.5
45.4
41.8
Finance income
Interest receivable from joint ventures (Note 34)
(0.9)
(1.2)
Other interest receivable
(1.8)
(1.8)
(2.7)
(3.0)
Net finance costs
42.7
38.8
The weighted average interest rate applicable to capitalised interest is 3.81% (2024: 3.59%).
13. Tax
Accounting policy
The taxation (credit)/charge for the year represents the sum of the tax currently payable and deferred tax. The (credit)/charge
is recognised in the income statement and statement of comprehensive income according to the accounting treatment of the
related transaction.
The Group converted to REIT status with effect from 8 September 2025. As a consequence of the Group’s REIT status, income tax
is not levied on the Group’s qualifying Property Rental Business profits, or gains from the sale of qualifying investment properties.
Instead, UK withholding tax must be deducted from distributions of these tax exempt profits and gains (Property Income
Distributions (PIDs)) paid by the Group to Shareholders, unless a Shareholder is entitled to be paid gross. Any income or gains
which are not exempt from UK corporation tax due to the Group’s REIT status are subject to tax within the Group in the usual way.
This includes profits on property trading activity, property related fee income and interest income.
Current tax payable or receivable is based on the taxable income for the period and any adjustment in respect of prior periods
and is calculated using the tax rate in force for the relevant period.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantively enacted at the end of the reporting period and are expected to apply
when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets
are recognised only to the extent that it is probable that taxable profit will give rise to a future tax liability against which the
deferred tax assets can be recovered.
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Financial statementsGovernanceStrategic report
Accounting policy continued
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the
timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will
not reverse in the foreseeable future.
Deferred income tax assets and liabilities may be offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same
tax authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on
a net basis.
The tax (credit)/charge for the year of £(100.0)m (2024: £9.4m) recognised in the consolidated income statement comprises:
2025 2024
£m £m
Current tax
Corporation tax on profit
12.9
14.5
Adjustments relating to prior years
(1.8)
(7.8)
11.1
6.7
Deferred tax
Origination and reversal of temporary differences
(111.7)
(4.0)
Adjustments relating to prior years
0.6
6.7
(111.1)
2.7
Total tax (credit)/charge for the year
(100.0)
9.4
The 2025 current tax adjustments relating to prior years reflect adjustments which have been included in submitted tax returns and
primarily relate to financing costs and capital allowances.
The Group works in an open and transparent manner and maintains a regular dialogue with HM Revenue and Customs.
This approach is consistent with the 'low risk' rating we have been awarded by HM Revenue and Customs and to which the Group
is committed.
The tax (credit)/charge for the year is lower (2024: lower) than the charge for the year derived by applying the standard rate of
corporation tax in the UK of 25.0% (2024: 25.0%) to the profit before tax. The differences, which lead to an effective tax rate of
(97.5)% (2024: 23.2%) are explained below:
2025 2024
£m £m
Profit before tax
102.6
40.6
Income tax at a rate of 25.0% (2024: 25.0%)
25.6
10.2
Expenses not deductible for tax purposes
(1.7)
0.2
Share of joint ventures and associates after tax
0.9
0.1
Tax credit arising from REIT conversion
(123.6)
–
Adjustment in respect of prior years
(1.2)
(1.1)
Amounts recognised in the income statement
(100.0)
9.4
As a result of conversion to REIT status, the Group has released £123.1m of deferred tax in respect of its Property Rental Business
activities, including that related to unrealised gains on qualifying investment properties and capital allowances in respect of those
properties. In addition, a £0.5m current tax saving has arisen in the period since conversion to REIT status, from the tax exempt
income arising in that period.
At 30 September 2025 the Group had unrecognised capital losses of £13.3m (2024: £nil) available to offset against future
chargeable gains, but which are not expected to be used, giving rise to an unrecognised deferred tax asset calculated at 25%
of £3.3m (2024: £nil).
In addition to the above, a deferred tax credit of £0.7m (2024: £6.0m) was recognised within other comprehensive
income comprising:
2025 2024
£m £m
Remeasurement of BPT Limited defined benefit pension scheme
(0.1)
(0.8)
Fair value movement in cash flow hedges
(0.6)
(5.2)
Amounts recognised in other comprehensive income
(0.7)
(6.0)
Notes to the financial statements continued
13. Tax continued
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Deferred tax balances comprise temporary differences attributable to:
2025 2024
£m £m
Deferred tax assets
Short-term temporary differences
4.6
6.1
4.6
6.1
Deferred tax liabilities
Trading property uplift to fair value on business combinations
(3.0)
(3.9)
Investment property revaluation
(1.0)
(93.8)
Short-term temporary differences
(2.4)
(21.9)
Fair value movement in financial interest in property assets
(0.7)
(0.2)
Actuarial gain on BPT Limited defined benefit pension scheme
(0.2)
(0.2)
Fair value movement in derivative financial instruments
(0.9)
(1.5)
(8.2)
(121.5)
Total deferred tax
(3.6)
(115.4)
In addition to the tax amounts shown above, contingent tax based on EPRA market value measures, being tax on the difference
between the carrying value of trading properties in the statement of financial position and their market value, has not been
recognised by the Group. This contingent tax amounts to £60.6m, calculated at 25.0% (2024: £72.1m, calculated at 25.0%), and will
be realised as the properties are sold.
It is not possible for the Group to identify the timing of movements in deferred tax between those expected within one year and
those expected in a period greater than one year. This is because movements in the main balances, both assets and liabilities, will be
determined by factors outside the control of the Group, namely the vacation date of properties and interest yield curve movements.
However, we anticipate that the balance will predominantly be crystallised in a period greater than one year.
14. Dividends
Accounting policy
Dividends are recognised through equity when approved by the Company’s Shareholders or on payment, whichever is earlier.
Dividends paid in the year are shown below:
2025 2024
£m £m
Ordinary dividends on equity shares:
Final dividend for the year ended 30 September 2023 – 4.37p per share
–
32.2
Interim dividend for the year ended 30 September 2024 – 2.54p per share
–
18.8
Final dividend for the year ended 30 September 2024 – 5.01p per share
37.0
–
Interim dividend for the year ended 30 September 2025 – 2.85p per share
21.1
–
58.1
51.0
Subject to approval at the AGM, the final dividend of 5.46p per share (gross) amounting to £40.4m will be paid on 20 February
2026 to Shareholders on the register at the close of business on the record date, 16 January 2026 (the shares will go ex-dividend
on 15 January 2026). Shareholders will again be offered the option to participate in a dividend reinvestment plan and the last day
for election is 30 January 2026. An interim dividend of 2.85p per share amounting to a total of £21.1m was paid to Shareholders on
7 July 2025.
15. Earnings per share
Accounting policy
Basic
Basic earnings per share is calculated by dividing the profit or loss attributable to the owners of the Company by the weighted
average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Group and held both in
Trust and as treasury shares to meet its obligations under which the dividends are being waived.
Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of shares in issue by the dilutive effect of
ordinary shares that the Company may potentially issue relating to its share option schemes and contingent share awards under
the share based payment schemes, based upon the number of shares that would be issued if 30 September 2025 was the end
of the contingency period. Where the effect of the above adjustments is antidilutive, they are excluded from the calculation of
diluted earnings per share.
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Financial statementsGovernanceStrategic report
15. Earnings per share continued
30 September 2025
30 September 2024
Weighted Weighted
average average
Profit for number of Earnings Profit for number of Earnings
the year shares per share the year shares per share
£m (millions) (pence) £m (millions) (pence)
Basic earnings per share
Profit attributable to equity holders
202.6
738.8
27.4
31.2
738.2
4.2
Effect of potentially dilutive securities
Share options and contingent shares
–
3.5
(0.1)
–
3.3
–
Diluted earnings per share
Profit attributable to equity holders
202.6
742.3
27.3
31.2
741.5
4.2
16. Investment property
Accounting policy
Property that is held for long-term rental yields or for capital appreciation, or both, and that is not occupied by the companies
in the consolidated Group, is classified as investment property. Investment property is measured initially at its cost, including
related transaction costs.
After initial recognition, investment property is carried at fair value. Fair value is based on active market prices, adjusted, if
necessary, for any difference in the nature, location or condition of the specified asset. If this information is not available, the
Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections.
Investment property falls within Level 3 of the fair value hierarchy as defined by IFRS 13. Further details are given in Note 27.
Subsequent expenditure is included in the carrying amount of the property when it is probable that the future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and
maintenance costs are charged to the consolidated income statement during the financial period in which they are incurred.
Gains or losses arising from changes in the fair value of the Group’s investment properties are included in the consolidated
income statement of the period in which they arise.
When the Group begins to redevelop an existing trading property for continued future use as an investment property, the
property is transferred to investment property and held as a non-current asset. The property is remeasured to fair value as at
the date of the transfer with any gain or loss being taken to the income statement.
Investment property – held for sale
Where specific investment properties are expected to sell within the next 12 months, their fair value is shown under assets held
for sale within current assets.
2025 2024
£m £m
Opening balance
3,028.3
2,948.9
Acquisitions
20.0
85.9
Capital expenditure – completed assets
17.2
13.9
Capital expenditure – assets under construction
111.2
161.2
Total additions
148.4
261.0
Disposals (Note 8)
(81.9)
(149.1)
Net valuation gains/(losses) on investment properties
1
29.5
(32.5)
3,124.3
3,028.3
Reclassifications to investment property – held for sale
(64.9)
(31.5)
Closing balance
3,059.4
2,996.8
1. Within the above are provisions for fire safety works. No potential recovery of these costs has been accounted for.
The basis of valuation of investment property, the use of external independent valuers, and the judgements and assumptions
adopted by management are set out in Note 2 ‘Critical accounting estimates and judgements’. The valuation of investment
property takes into account the prevailing market conditions as at the reporting date, including sustainability and climate related
considerations associated with the properties.
The historical cost of the Group’s investment property as at 30 September 2025 is £2,762.4m (2024: £2,700.9m). Direct repair and
maintenance costs arising from investment property that generated rental income during the year were £5.8m (2024: £5.8m).
Within investment property are a number of assets held for sale at the reporting date, valued at £64.9m (2024: £31.5m). Held for
sale properties are those that are for sale, where solicitors have been instructed, or where contracts have been exchanged.
All investment properties which are held for sale are included within our PRS segment.
Notes to the financial statements continued
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Annual Report and Accounts 2025
17. Property, plant and equipment
Accounting policy
Property, plant and equipment are stated at cost less residual value and depreciation and comprise office leases, fixtures, fittings
and equipment. Depreciation is charged to the income statement on a straight-line basis over the estimated useful life ranging
from 3–5 years, with office leases depreciated over the life of the lease.
18. Investment in associates
2025 2024
£m £m
Opening balance
14.9
15.8
Share of profit/(loss) for the year
0.6
(0.4)
Dividends paid in the year
(0.3)
(0.5)
Closing balance
15.2
14.9
The closing balance comprises share of net assets of £0.7m (2024: £0.4m) and net loans due from associates of £14.5m
(2024: £14.5m). At the balance sheet date, there is no expectation of any material credit losses on loans due. As at 30 September
2025, the Group’s interest in active associates was as follows:
% of ordinary share
capital held
Country of incorporation
Accounting period end
Vesta LP
20.0
UK
30 September
In relation to the Group’s investment in associates, the aggregated assets, liabilities, revenues and profit or loss of associates is
shown below:
2025 Summarised income statement
£m
Vesta LP
Net rental income and other income
2.6
Administration and other expenses
(0.5)
Operating profit
2.1
Revaluation loss on investment property
0.8
Profit before tax
2.9
Ta x
–
Profit after tax
2.9
2025 Summarised statement of financial position
£m
Vesta LP
Investment property
74.4
Current assets
2.5
Total assets
76.9
Current liabilities
(1.1)
Non-current liabilities
(72.5)
Total liabilities
(73.6)
Net assets
3.3
2024 Summarised income statement
£m
Vesta LP
Net rental income and other income
2.7
Administration and other expenses
(0.5)
Operating profit
2.2
Revaluation gains on investment property
(4.5)
Loss before tax
(2.3)
Ta x
–
Loss after tax
(2.3)
2024 Summarised statement of financial position
£m
Vesta LP
Investment property
72.7
Current assets
3.2
Total assets
75.9
Current liabilities
(1.2)
Non-current liabilities
(72.5)
Total liabilities
(73.7)
Net assets
2.2
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Financial statementsGovernanceStrategic report
19. Investment in joint ventures
2025 2024
£m £m
Opening balance
76.4
75.2
Share of loss for the year
(4.3)
(0.2)
Further investment
1
3.7
–
Loans advanced to joint ventures
1.7
1.4
Closing balance
77.5
76.4
1. Grainger invested £3.7m into Connected Living London (BTR) Limited in the year (2024: £nil).
The closing balance comprises share of net assets of £46.1m (2024: £46.7m) and net loans due from joint ventures of £31.4m
(2024: £29.7m). At the balance sheet date, there is no expectation of any material credit losses on loans due.
At 30 September 2025, the Group’s interest in active joint ventures was as follows:
% of ordinary share
capital held
Country of incorporation
Accounting period end
Connected Living London (BTR) Limited
51
UK
30 September
Curzon Park Limited
50
UK
31 March
Lewisham Grainger Holdings LLP
50
UK
30 September
In relation to the Group’s investment in joint ventures, the aggregated assets, liabilities, revenues and profit or loss are shown below:
2025 Summarised income statement
Connected Lewisham
Living London Curzon Park Grainger
£m (BTR) Limited Limited
Holdings LLP
Total
Administration and other expenses
(0.3)
(0.8)
(0.1)
(1.2)
Revaluation loss on investment property
(7.3)
–
–
(7.3)
Loss before tax
(7.6)
(0.8)
(0.1)
(8.5)
Ta x
–
–
–
–
Loss after tax
(7.6)
(0.8)
(0.1)
(8.5)
2025 Summarised statement of financial position
Investment property
89.7
–
13.9
103.6
Current assets
2.8
37.7
–
40.5
Total assets
92.5
37.7
13.9
144.1
Current liabilities
(0.6)
(38.6)
(14.3)
(53.5)
Net assets
91.9
(0.9)
(0.4)
90.6
2024 Summarised income statement
Connected Lewisham
Living London Curzon Park Grainger
£m (BTR) Limited Limited
Holdings LLP
Total
Administration and other expenses
(0.2)
(0.1)
(0.1)
(0.4)
Loss before tax
(0.2)
(0.1)
(0.1)
(0.4)
Ta x
–
–
–
–
Loss after tax
(0.2)
(0.1)
(0.1)
(0.4)
2024 Summarised statement of financial position
Investment property
90.5
–
11.8
102.3
Current assets
2.6
36.6
–
39.2
Total assets
93.1
36.6
11.8
141.5
Current liabilities
(0.8)
(36.8)
(12.1)
(49.7)
Net assets
92.3
(0.2)
(0.3)
91.8
20. Financial interest in property assets (‘CHARM’ portfolio)
Accounting policy
The CHARM portfolio is a financial interest in equity mortgages held by the Church of England Pensions Board as mortgagee.
It is accounted for under IFRS 9 and is measured at fair value through profit and loss.
It is initially recognised at fair value and subsequently carried at fair value. Subsequent to initial recognition, the net change in
value recorded is as follows: i) cash received from the instrument in the year is deducted from the carrying value of the assets;
and ii) the carrying value of the assets is revised to the net present value of the updated projected cash flows arising from the
instrument using a market discount rate at the reporting date. The change in value arising from ii) above is recorded through the
consolidated income statement and is shown on the line ‘Income from financial interest in property assets’.
Notes to the financial statements continued
154
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Annual Report and Accounts 2025
2025 2024
£m £m
Opening balance
57.4
67.0
Cash received from the instrument
(9.9)
(8.3)
Amounts taken to income statement
1.1
(1.3)
Closing balance
48.6
57.4
The CHARM portfolio is considered to be a Level 3 financial asset as defined by IFRS 13. The key assumptions used to value the
asset are set out within Note 2 ‘Critical accounting estimates and judgements’, and the financial asset is included within the fair
value hierarchy within Note 27.
21. Intangible assets
Accounting policy
Intangible assets comprise computer software and goodwill.
Costs incurred in relation to computer software that the Group has exclusive right of use to are capitalised and amortised on
a straight-line basis over the estimated useful lives of the assets from the date they are available for use. The effective life is
assessed in accordance with the period that the Group expects benefits from its investment in technology to be consumed.
Amortisation is charged to the consolidated income statement.
Costs incurred in relation to computer software that the Group does not have exclusive right of use to, including its Software
as a Service (‘SaaS’) arrangements, are not accounted for as intangible assets. Configuration and customisation costs incurred
prior to receiving services are prepaid and expensed to the Consolidated income statement once the service is in use. All other
expenditure in relation to non-exclusive SaaS is expensed to the Consolidated income statement as incurred.
Goodwill is tested for impairment based on a value in use calculation at each reporting date.
22. Inventories – trading property
Accounting policy
Tenanted residential properties held-for-sale in the normal course of business within the PRS and Reversionary segments
are shown in the financial statements as a current asset at the lower of cost and net realisable value. Cost includes legal and
surveying charges and introducer fees incurred during acquisition together with improvement costs.
Legacy land and development property held within the Other segment of the business are shown in the financial statements at
the lower of cost and net realisable value.
Cost represents the acquisition price including legal and other professional costs associated with the acquisition together with
subsequent development costs net of amounts transferred to costs of sale.
Net realisable value is the expected sales proceeds that the Group expects on sale of a property or current market value net of
associated selling costs.
2025 2024
£m £m
Opening balance
331.6
392.2
Additions
11.9
15.0
Disposals (Note 7)
(45.5)
(75.5)
Reversal of impairment/(impairment) of inventories to net realisable value
0.6
(0.1)
Closing balance
298.6
331.6
The closing balance above reflects the lower of historical cost and net realisable value of inventory owned by the Group rather than
the current market value. Market value is considered to be a more relevant reflection of the value of inventory owned by the Group.
The valuation of trading property in our EPRA NAV metrics take into account the prevailing market conditions as at the reporting
date, including sustainability and climate related considerations associated with the properties.
The segmental allocation of PRS, Reversionary and Development inventory, as well as additional information including their market
value is detailed in Note 4.
Information relating to the judgements and assumptions adopted by management in relation to inventories is set out in Note 2
‘Critical accounting estimates and judgements’. It is not possible for the Group to identify which properties will be sold within the
next 12 months. The size of the Group’s property portfolio does result in a relatively predictable vacancy rate. However, it is not
possible to predict in advance the specific properties that will become vacant. As the Group expects to realise trading property in
its ordinary operating cycle, it is shown as a current asset in the consolidated statement of financial position.
Amounts relating to inventories that have been recognised as an expense in the consolidated income statement are as follows:
2025 2024
£m £m
Carrying value of trading property sold (Note 7)
45.5
75.5
Reversal of impairment/(impairment) of inventories to net realisable value
(0.6)
0.1
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Financial statementsGovernanceStrategic report
23. Trade and other receivables
Accounting policy
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment. A provision for impairment in trade receivables is established when there is an expectation
of cash shortfalls over the expected life of the amounts due. The movement in the provision is recognised in the consolidated
income statement.
2025 2024
£m £m
Rent and other tenant receivables
4.5
4.8
Deduct: Provision for impairment
(1.6)
(1.5)
Rent and other tenant receivables – net
2.9
3.3
Restricted deposits
57.7
63.3
Other receivables
12.7
19.3
Prepayments
5.9
5.0
Closing balance
79.2
90.9
The Group’s assessment of expected credit losses involves estimation given its forward-looking nature. This is not considered to be
an area of significant judgement or estimation due to the balance of gross rent and other tenant receivables of £4.5m (2024: £4.8m).
Assumptions used in the forward-looking assessment are continually reviewed to take into account likely rent deferrals.
Restricted deposits arise from contracts with third parties that place restrictions on use of funds and cannot be accessed on
demand. These deposits are held in connection with facility arrangements and are released by the lender on a quarterly basis once
covenant compliance has been met.
The fair values of trade and other receivables are considered to be equal to their carrying amounts. The credit quality of
financial assets that are neither past due nor impaired is discussed in Note 27 ‘Financial risk management and derivative
financial instruments’.
24. Provisions for other liabilities and charges
Accounting policy
Provisions are recognised when: i) the Group has a present obligation as a result of a past event; ii) it is probable that an outflow
of resources will be required to settle the obligation; and iii) a reliable estimate can be made of the amount of the obligation.
2025 2024
£m £m
Current provisions for other liabilities and charges
Opening balance
13.2
8.6
Additions
1.9
5.0
Utilisation
(3.1)
(0.4)
12.0
13.2
Non-current provisions for other liabilities and charges
Opening balance
1.0
1.1
Reversal
(0.3)
–
Utilisation
–
(0.1)
0.7
1.0
Total provisions for other liabilities and charges
12.7
14.2
Current provisions relate to potential fire safety remediation costs relating to a small number of legacy properties that Grainger
historically had an involvement in developing and are expected to require fire safety related remediation works. These were first
recognised in the year ended 30 September 2022 after an extensive assessment of the Group’s legal and constructive obligations
arising from the Building Safety Act 2022 and other associated fire regulations, and based on the results of relevant surveys
which were commissioned. The provision is based on the latest estimation of costs to be incurred, offset by costs incurred to date.
Where fire safety works are required and the Group owns the properties, the cost is considered as part of the valuation of those
properties. Where appropriate, the Group is seeking recoveries from contractors and insurers.
Notes to the financial statements continued
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Annual Report and Accounts 2025
25. Trade and other payables
Accounting policy
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method. Refer to Note 35 for accounting policy in relation to lease liabilities.
2025 2024
£m £m
Current liabilities
Deposits received
13.9
12.8
Trade payables
22.7
19.0
Lease liabilities (Note 35)
0.6
0.7
Tax and social security costs
0.8
4.9
Accruals
66.0
64.5
Deferred income
11.3
12.2
115.3
114.1
Non-current liabilities
Lease liabilities (Note 35)
5.7
6.3
5.7
6.3
Total trade and other payables
121.0
120.4
Within accruals, £46.0m comprises accrued expenditure in respect of ongoing construction activities (2024: £43.9m).
26. Interest-bearing loans and borrowings
Accounting policy
Borrowings are initially recognised at the fair value of consideration received, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value
is recognised in the consolidated income statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at
least 12 months after the consolidated statement of financial position date.
2025 2024
£m £m
Current liabilities
Non-bank financial institution
75.0
–
75.0
–
Non-current liabilities
Bank loans – Pounds Sterling
544.1
548.2
Bank loans – Euros
0.7
0.8
Non-bank financial institution
273.5
347.9
Corporate bonds
696.8
696.0
1,515.1
1,592.9
Total interest-bearing loans and borrowings
1,590.1
1,592.9
(a) Bank loans
Sterling bank loans include variable rate loans bearing interest at rates between 1.5% and 1.8% above SONIA and Euro bank loans
include variable rate loans bearing interest at a rate of 1.6% above EURIBOR. Gross bank loans of £478.0m are due to mature in the
year ended 30 September 2029, and £75.0m due to mature in the year ended 30 September 2030. At the year end, the Group had
£229.7m drawn under its revolving credit facilities (RCFs) (2024: £234.8m).
The weighted average variable interest rate on bank loans as at 30 September 2025 was 5.6% (2024: 6.6%). Bank loans are secured
by floating charges over specific property and other assets of the Group.
Unamortised costs in relation to bank loans of £8.2m (2024: £9.2m) will be amortised over the life of the loans to which they relate.
During the year the Group exercised options to extend the maturity dates on certain bank loans by one year. The extension of
maturity dates has been deemed to be a non-substantial modification.
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Financial statementsGovernanceStrategic report
26. Interest-bearing loans and borrowings continued
(b) Non-bank financial institution
£350.0m is funded by fixed rates loans from Rothesay Life PLC across three tranches: £75.0m maturing July 2026, £75.0m maturing
October 2027 and £200.0m maturing July 2029. Non-bank loans are secured by floating charges over specific property and other
assets of the Group.
The weighted average interest rate on non-bank loans as at 30 September 2025 was 2.4% (2024: 2.4%). Unamortised costs in
relation to these fixed rate loans of £1.6m (2024: £2.1m) will be amortised over the life of the loans to which they relate.
(c) Corporate bonds
In 2018, the Group issued a ten-year £350.0m corporate bond at 3.375% due April 2028. In 2020, the Group issued a ten-year
£350.0m corporate bond at 3.0% due July 2030.
As at 30 September 2025 unamortised costs in relation to the corporate bonds stood at £1.9m (2024: £2.4m), and the outstanding
discount was £1.3m (2024: £1.6m).
(d) Other loans and borrowings information
The above analyses of loans and borrowings are net of unamortised loan issue costs and the discount on issuance of the corporate
bonds. As at 30 September 2025, unamortised costs totalled £11.7m (2024: £13.7m) and the outstanding discount was £1.3m
(2024: £1.6m).
In accordance with IAS 7 Statement of Cash Flows, the Group is required to detail any changes in liabilities that arise from financing
activities throughout the year. These changes are detailed below.
2025
2024
Derivatives used for Derivatives used for
hedging the liabilities hedging the liabilities
from financing from financing
activities activities
Loans and Interest Loans and Interest
£m borrowings
payable
Assets
Liabilities
borrowings
payable
Assets
Liabilities
Opening balance
1,592.9
9.4
19.8
–
1,533.5
9.3
45.3
–
Changes from financing cash flows
Proceeds from loans and borrowings
186.0
–
–
–
244.0
–
–
–
Repayment of borrowings
(191.2)
–
–
–
(185.0)
–
–
–
Transaction costs related to loans,
borrowings and derivatives
(2.3)
–
5.1
–
(2.8)
–
1.9
–
Total changes from financing cash flows
(7.5)
–
5.1
–
56.2
–
1.9
–
Other changes
Gross interest accrued
–
53.0
–
–
–
52.7
–
–
Gross interest paid
–
(53.3)
–
–
–
(52.6)
–
–
Amortisation of borrowing costs net of premiums
4.7
–
–
–
3.2
–
–
–
Hedge ineffectiveness under IFRS 9
–
–
(8.5)
–
–
–
(6.6)
–
Changes in fair value of derivatives through
hedging reserve
–
–
(2.3)
–
–
–
(20.8)
–
Total other changes
4.7
(0.3)
(10.8)
–
3.2
0.1
(27.4)
–
Closing balance
1,590.1
9.1
14.1
–
1,592.9
9.4
19.8
–
Notes to the financial statements continued
158
Grainger plc
Annual Report and Accounts 2025
27. Financial risk management and derivative financial instruments
Accounting policy
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments
with original maturities of three months or less. Deposits that cannot be accessed and have restrictions on use arising from
contracts with third parties are reflected in trade and other receivables.
Derivative financial instruments
The Group uses derivative instruments to help manage its interest rate risk. In accordance with its treasury policy, the Group does
not hold or issue derivatives for trading purposes. Derivatives are classified as current assets and current liabilities.
The derivatives are recognised initially at fair value. Subsequently, the gain or loss on re-measurement to fair value is recognised
immediately in the consolidated income statement, unless the derivatives qualify for cash flow hedge accounting, and have been
designated as such, in which case any gain or loss is taken to equity in a cash flow hedge reserve via other comprehensive income.
In order to qualify for hedge accounting, the Group is required to document in advance the relationship between the item being
hedged and the hedging instrument. The Group is also required to demonstrate that the hedge will be highly effective on an
ongoing basis. This effectiveness testing is re-performed at each period end to ensure that the hedge remains highly effective.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time is immediately transferred to the consolidated income statement.
Fair value estimation
The fair values of interest rate derivatives are based on a discounted cash flow model using market information.
Derecognition of financial assets and liabilities
Derecognition is the point at which the Group removes an asset or liability from its consolidated statement of financial position.
The Group’s policy is to derecognise financial assets only when the contractual right to the cash flows from the financial asset
expires. The Group also derecognises financial assets that it transfers to another party provided that the transfer of the asset
also transfers the right to receive cash flows from the financial asset. When the transfer does not result in the Group transferring
the right to receive cash flows from the financial asset but it does result in the Group assuming a corresponding obligation to pay
cash flows to another recipient, the financial asset is derecognised.
The Group derecognises financial liabilities only when its obligation is discharged, is cancelled or expires.
Financial assets classified as fair value through profit and loss (previously available-for-sale) are the financial interest in
property assets.
Derivative financial instruments not in hedge accounting relationships are classified as fair value through profit and loss.
Categories of financial instruments
A summary of the classifications of the financial assets and liabilities held by the Group is set out in the following table:
2025
Loans and Assets at
receivables/ fair value
cash and through Derivatives
cash profit and
used for
Other financial
Total book Fair value
£m equivalents loss
hedging
assets value
adjustment
Fair value
Non-current assets
Financial interest in property assets
–
48.6
–
–
48.6
–
48.6
Current assets
Trade and other receivables
excluding prepayments
73.3
–
–
–
73.3
–
73.3
Cash and cash equivalents
85.8
–
–
–
85.8
–
85.8
Derivative financial instruments
–
–
14.1
–
14.1
–
14.1
Total financial assets
159.1
48.6
14.1
–
221.8
–
221.8
Loans and Liabilities at
receivables/ fair value Other financial
cash and through Derivatives liabilities at
cash profit and used for amortised Total book Fair value
£m equivalents loss hedging cost value
adjustment
Fair value
Non-current liabilities
Trade and other payables
–
–
–
5.7
5.7
–
5.7
Interest-bearing loans and borrowings
–
–
–
1,515.1
1,515.1
(65.7)
1,449.4
Current liabilities
Trade and other payables
–
–
–
115.3
115.3
–
115.3
Interest bearing loans and borrowings
–
–
–
75.0
75.0
–
75.0
Total financial liabilities
–
–
–
1,711.1
1,711.1
(65.7)
1,645.4
Net financial assets/(liabilities)
159.1
48.6
14.1
(1,711.1)
(1,489.3)
65.7
(1,423.6)
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Financial statementsGovernanceStrategic report
27. Financial risk management and derivative financial instruments continued
2024
Loans and Assets at
receivables/ fair value Other
cash and through Derivatives financial
cash profit and used for Total book Fair value
£m equivalents loss hedging assets value
adjustment
Fair value
Non-current assets
Financial interest in property assets
–
57.4
–
–
57.4
–
57.4
Current assets
Trade and other receivables
excluding prepayments
85.9
–
–
–
85.9
–
85.9
Cash and cash equivalents
93.2
–
–
–
93.2
–
93.2
Derivative financial instruments
–
–
19.8
–
19.8
–
19.8
Total financial assets
179.1
57.4
19.8
–
256.3
–
256.3
Loans and Liabilities at Other
receivables/ fair value financial
cash and through Derivatives liabilities at
cash profit and used for amortised Total book Fair value
£m equivalents loss hedging cost value
adjustment
Fair value
Non-current liabilities
Trade and other payables
–
–
–
6.3
6.3
–
6.3
Interest-bearing loans and borrowings
–
–
–
1,592.9
1,592.9
(98.1)
1,494.8
Current liabilities
Trade and other payables
–
–
–
114.1
114.1
–
114.1
Total financial liabilities
–
–
–
1,713.3
1,713.3
(98.1)
1,615.2
Net financial assets/(liabilities)
179.1
57.4
19.8
(1,713.3)
(1,457.0)
98.1
(1,358.9)
The fair value difference relates to the Group’s corporate bonds and the non-bank loans, which are stated at amortised cost in
the consolidated statement of financial position. The fair value of the bonds is calculated as £653.2m (2024: £632.8m) based on
quoted prices in traded markets. The fair value of the non-bank loans is calculated as £331.1m (2024: £319.1m) and is calculated by
independent financial advisers (Centrus Group) by reference to quoted iBoxx index rates. There is no requirement under IFRS 9 to
revalue these loans to fair value in the consolidated statement of financial position.
Included in cash above is £16.7m (2024: £16.4m) relating to cash held on behalf of tenants, leaseholders and clients comprising
service charge and sinking fund balances, tenant deposits and cash held on behalf of joint ventures. These cash amounts are held by
the Group in client bank accounts and are excluded from net debt. In addition, £3.4m (2024: £4.9m) of the cash balance is restricted
in use, either by underlying financing arrangements or other commercial agreements comprising either reserve fund amounts or
amounts where the release of cash is contingent upon proof of qualifying expenditure or quarterly cash waterfalls.
Financial risk management
The Group’s objectives for managing financial risk are to minimise the risk of adverse effects on performance and to ensure the
ability of the Group to continue as a going concern while securing access to cost effective finance and maintaining flexibility to
respond quickly to opportunities that arise.
The Group’s policies on financial risk management are approved by the Board of Directors and implemented by Group treasury.
Written policies and procedures cover interest rate risk, credit risk, the use of derivative and non-derivative financial instruments and
investment of excess liquidity. Group treasury regularly reports to the Audit Committee.
The Group uses derivative financial instruments to hedge its exposure to financial risk but does not take positions for
speculative purposes.
The sources of financial risk and the policies and activities used to mitigate each are discussed below and include credit risk, liquidity
risk and market risk, which includes interest rate risk, credit availability risk, house price risk in relation to the Tricomm Housing
portfolio and our financial interest in property assets, and capital risk.
Financial risk factors
1) Credit risk
Credit risk is the risk of financial loss due to a counterparty’s failure to honour its obligations. The Group’s principal financial assets
include its financial interest in property assets, bank balances and cash, trade and other receivables and derivative financial
instruments. The carrying amount of financial assets recorded in the financial statements represents the Group’s maximum
exposure to credit risk without taking account of the value of any collateral obtained.
The Group’s financial interest in property assets (CHARM) relates to a financial interest in equity mortgages held by the Church of
England Pensions Board. The Group’s cash receipts are payable by the Church Commissioners, a counterparty considered to be low
risk as they have no history of past due or impaired amounts and there are no past due amounts outstanding at the year end.
Notes to the financial statements continued
160
Grainger plc
Annual Report and Accounts 2025
The Group sometimes enters into land sales contracts under which a proportion of the consideration is deferred and recognised
within other receivables (Note 23). Each purchaser is subject to financial due diligence prior to sale. At 30 September 2025, £5.4m
(2024: £5.2m) was outstanding.
The Group also has credit risk relating to trade receivables. Under IFRS 9, the Group is required to provide for any expected credit
losses arising from trade receivables. For all assured shorthold tenancies, credit checks are performed prior to acceptance of
the tenant. Regulated tenants are incentivised through the benefit of their tenancy agreement to avoid default on their rent.
Lifetime tenancies are generally at low or zero rent and hence suffer minimal credit risk. Rent deposits and personal guarantees are
held in respect of some leases. Taking these factors into account, the risk to the Group of individual tenant default and the credit
risk of trade receivables are considered low, as is borne out by the low level of trade receivables written off both in this year and in
prior years.
Tenant deposits of £11.8m (2024: £11.6m) are held that provide some security against rental arrears and property dilapidations
caused by the tenant. The Group does not hold any other collateral as security. Of the net trade receivables balance of £2.9m, we
consider £nil to be not due and not impaired. All of the £11.6m other receivables balance are considered not due and not impaired.
As at 30 September 2025 tenant arrears of £1.6m within trade receivables were impaired and fully provided for (2024: £1.5m).
The impaired receivables are based on a review of expected credit losses, which is detailed in Note 23. Impaired receivables and
receivables not considered to be impaired are not material to the financial statements and, therefore, no further analysis is provided.
The credit risk on liquid funds and derivative financial instruments is managed through the Group’s policies of monitoring
counterparty exposure, monitoring the concentration of credit risk through the use of multiple counterparties and the use of
counterparties of good financial standing. At 30 September 2025, the fair value of all interest rate derivatives that had a positive
value was £14.1m (2024: £19.8m).
At 30 September 2025, the combined credit exposure arising from cash held at banks, money market deposits and interest rate
swaps was £99.9m (2024: £133.0m), which represents 2.6% (2024: 3.0%) of total assets. Deposits were placed with financial
institutions with A- or better credit ratings.
The Group has the following cash and cash equivalents:
2025 2024
£m £m
Pounds Sterling
85.1
92.4
Euros
0.7
0.8
85.8
93.2
At the year end, £56.1m was placed on deposit (2024: £61.4m) at effective interest rates between 1.5% and 4.6% (2024: 1.5% and
4.6%). Remaining cash and cash equivalents are held as cash at bank or in hand. The Group has an overdraft facility of £1.0m as at
30 September 2025 (2024: £1.0m).
2) Liquidity risk
The Group ensures that it maintains continuity and flexibility through a spread of maturities.
Although the Group’s core funding is subject to covenants requiring certain levels of LTV with respect to the entities in the Group
of obligors, and to maintaining a certain level of interest cover at the Group level, the loans are not secured directly against any
property allowing operational flexibility.
The Group ensures that it maintains sufficient cash for operational requirements at all times. The Group also ensures that it
has sufficient undrawn committed borrowing facilities from a diverse range of banks and other sources to allow for operational
flexibility and to meet committed expenditure. The business is highly cash generative from its sales of vacant properties, gross
rents and management fees. In adverse trading conditions, tenanted and other sales can be increased and new acquisitions can be
stopped. Consequently, the Group is able to reduce gearing (LTV) levels and improve liquidity quickly.
The Group’s credit rating is currently provided by Fitch and S&P. Fitch and S&P’s most recent assessments on the Group were issued
in January 2025. Fitch assigned the Group a long-term issuer default rating of ‘BBB-’ and the Group’s Corporate Bonds’ senior
secured issue ratings of ‘BBB’. S&P affirmed the Group’s long-term issuer default rating of ‘BB+’ and the Group’s Corporate Bonds’
senior secured issue ratings of ‘BBB-’. Both Fitch & S&P assigned the Group’s credit outlook as ‘Stable’. The Group’s stable credit
outlook suggests there is currently very little risk of a credit rating downgrade to the Group. The Group monitors rating agency
metrics to ensure we maintain or improve upon the Group’s current credit ratings.
In the event of a credit rating downgrade, there may be an increase in the coupon payable on the Group’s Corporate Bonds should
the senior secured issue rating fall below BBB-. This could result in an increase in the Group’s annual interest charge of £8.7m.
However, the coupon would revert to the original coupon payable should the credit rating recover to BBB- or higher. This increase in
interest costs would also affect the Group’s interest cover financial covenant. However, there is significant headroom on our facility
financial covenants and the Group has determined that we would remain compliant and retain significant covenant headroom
despite this increase in interest costs. No other debt facilities or financial covenants of the Group would be affected by a credit
rating downgrade.
161
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27. Financial risk management and derivative financial instruments continued
Certain borrowings and facilities are structured as ESG funding comprising of either green loans or sustainability-linked finance.
As at the year end, £175m of the Group's facilities are linked to ESG requirements of which £50m are designated as green loans and
£125m are sustainability-linked finance. Green loan allocations are made on a use-of-proceeds basis where investment outcomes
are expected to achieve certain minimum EPC ratings. Sustainability-linked facilities include targets to achieve certain EPC targets
in the Group's PRS portfolio. As at the year end, the green loans were fully allocated, and all targets under the sustainability-linked
facilities are being met. Achieving these targets results in the Group receiving a margin benefit on borrowings under their respective
loans and facilities. In the event of not achieving a target, the Group may experience a similar margin penalty. As at the year end, the
maximum possible penalty for missing a target could result in a further finance charge of less than £0.1m.
The Group’s fixed rate borrowings are stated at amortised cost in the financial statements and there is currently no requirement
under IFRS 9 to revalue these borrowings in the financial statements of the Group. Therefore, there would be no impact to the
Group’s measurement of borrowings in the event of a credit rating downgrade.
In accordance with IFRS 13, the Group measures derivatives at fair value including the effect of counterparty credit risk.
Where derivatives have been designated in a cash flow hedge relationship, the Group carries out hedge effectiveness testing in
accordance with IFRS 9. In the event of a credit rating downgrade, there may be an impact on the fair value of the Group’s derivative
contracts as the credit quality of the Group decreases which may give rise to a requirement to recognise some hedge ineffectiveness
in the financial statements. However, in accordance with hedge effectiveness requirements under IFRS 9, credit valuation
adjustments included in the measurement of derivative fair values would need to dominate movements in fair value before creating
hedge ineffectiveness. The Group does not consider that a credit rating downgrade will impact derivative fair values and give rise to
a material level of hedge ineffectiveness.
The following table analyses the Group’s financial liabilities and net-settled derivative financial liabilities at the consolidated
statement of financial position date into relevant maturity groupings based on the remaining period to the contractual maturity
date. The amounts disclosed in the table are the contractual undiscounted cash flows using yield curves as at 30 September 2025.
Between Between
Less than 1 and 2 and More than
£m 1 year 2 years 5 years
5 years
Total
At 30 September 2025
Interest-bearing loans and borrowings (Note 26)
75.0
–
1,515.1
–
1,590.1
Interest on borrowings
60.7
58.2
109.0
–
227.9
Interest on derivatives
(7.1)
(3.6)
(0.5)
–
(11.2)
Trade and other payables
115.3
0.7
2.3
2.7
121.0
At 30 September 2024
Interest-bearing loans and borrowings (Note 26)
–
75.0
1,167.9
350.0
1,592.9
Interest on borrowings
64.1
58.9
151.0
10.5
284.5
Interest on derivatives
(11.3)
(5.2)
(5.6)
–
(22.1)
Trade and other payables
114.1
0.9
1.7
3.7
120.4
The Group’s undrawn committed borrowing facilities are monitored against projected cash flows.
Maturity of committed undrawn borrowing facilities
2025 2024
£m £m
Expiring:
Between one and two years
–
–
Between two and five years
467.0
436.8
Over five years
–
–
467.0
436.8
3) Market risk
The Group is exposed to market risk through interest rates, the availability of credit and house price movements relating to the
Tricomm Housing portfolio and the CHARM portfolio. The approach the Group takes to each of these risks is set out below.
The Group is not significantly exposed to equity price risk or to commodity price risk.
Fair values
IFRS 13 sets out a three-tier hierarchy for financial assets and liabilities valued at fair value. These are as follows:
• Level 1 – quoted prices (unadjusted) in active markets for identical assets and liabilities;
• Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
or indirectly; and
• Level 3 – unobservable inputs for the asset or liability.
Notes to the financial statements continued
162
Grainger plc
Annual Report and Accounts 2025
The following table presents the Group’s assets and liabilities that are measured at fair value:
2025
2024
£m
Assets
Liabilities
Assets
Liabilities
Level 3
CHARM
48.6
–
57.4
–
Investment property
1
3,124.3
–
3,028.3
–
3,172.9
–
3,085.7
–
Level 2
Interest rate swaps – in cash flow hedge accounting relationships
14.1
–
19.8
–
14.1
–
19.8
–
1. Includes investment property – held for sale.
The significant unobservable inputs affecting the carrying value of the CHARM portfolio are house price inflation and discount rates.
Assumptions used are detailed in Note 2 and a reconciliation of movements and amounts recognised in the consolidated income
statement are detailed in Note 20.
The investment valuations provided by Allsop LLP and CBRE Limited are based on the RICS Professional Valuation Standards, but
include a number of unobservable inputs and other valuation assumptions and are detailed in Note 2.
The fair value of swaps and caps were valued in-house by a specialised treasury management system, using a discounted cash flow
model and market information. The fair value is derived from the present value of future cash flows discounted at rates obtained by
means of the current yield curve appropriate for those instruments. As all significant inputs required to value the swaps and caps
are observable, they all fall within Level 2.
Interest rate swaps and caps are all classified as either current assets or current liabilities.
The notional principal amount of the outstanding interest rate swap and cap contracts as at 30 September 2025 was
£550.7m (2024: £476.6m).
In accordance with IFRS 9, the Group has reviewed its interest rate hedges. In the absence of hedge accounting, movements
in fair value are taken directly to the consolidated income statement. However, where cash flow hedges have been viewed as
being effective, and have been designated as such, any gains or losses have been taken to the cash flow hedge reserve via other
comprehensive income.
The reconciliation between opening and closing balances for Level 3 is detailed in the table below:
2025 2024
Assets – Level 3 £m £m
Opening balance
3,085.7
3,015.9
Amounts taken to income statement
30.6
(33.8)
Other movements
56.6
103.6
Closing balance
3,172.9
3,085.7
The following assets and liabilities are excluded from the above table as fair value is not the accounting basis for the Group’s
financial statements, but is the basis for the Group’s EPRA NRV, EPRA NTA and EPRA NDV measures:
2025
2024
£m
Accounting basis
Classification if fair valued
Book value
Fair value
Book value
Fair value
Inventories – trading property
Lower of cost and net
realisable value
Level 3
298.6
541.0
331.6
620.1
Corporate bonds
Amortised cost
Level 1
700.0
653.2
700.0
632.8
Non-bank loans
Amortised cost
Level 3
350.0
331.1
350.0
319.1
(a) Interest rate risk
The Group’s interest rate risk arises from the risk of fluctuations in interest charges on floating rate borrowings. The Group
mitigates this risk through the use of variable to fixed interest rate swaps and caps. This subjects the Group to fair value risk as the
value of the financial derivatives fluctuates in line with variations in interest rates. However, the Group seeks to cash flow hedge
account where applicable. The Group is, however, driven by commercial considerations when hedging its interest rate risk and is
not driven by the strict requirements of the hedge accounting rules under IFRS 9 if this is to the detriment of achieving the best
commercial arrangement.
Hedging activities are carried out under the terms of the Group’s hedging policies and are regularly reviewed by the Board to
ensure compliance with this policy. The Board reviews its policy on interest rate exposure regularly with a view to establishing that
it is still relevant in the prevailing and forecast economic environment. The current Group treasury policy is to maintain floating
rate exposure of no greater than 30% of expected borrowing. As at 30 September 2025, 100% (2024: 95%) of the Group’s gross
borrowings were economically hedged to fixed or capped rates.
Based on the Group’s interest rate profile at the statement of financial position date, a 1% rise in interest rates would decrease
annual profits by £nil (2024: £0.6m). Similarly, a 1% fall would increase annual profits by £nil (2024 £0.6m).
163
Financial statementsGovernanceStrategic report
27. Financial risk management and derivative financial instruments continued
Based on the Group’s interest rate profile at the statement of financial position date, a 1% increase in interest rates would increase
the Group’s equity by £7.0m (2024: £9.3m). Similarly, a 1% fall would decrease the Group’s equity by £7.0m (2024: £9.3m).
Upward movements in medium and long-term interest rates, associated with higher interest rate expectation, increase the value
of the Group’s interest rate swaps that provide protection against such moves. The converse is true for downward movements
in the interest yield curve. Where the Group’s swaps qualify as effective hedges under IFRS 9, these movements in fair value are
recognised directly in other comprehensive income rather than the consolidated income statement.
As at 30 September 2025, the market value of derivatives designated as cash flow hedges under IFRS 9 is a net asset of £14.1m
(2024: £19.8m). £8.5m is recognised within the income statement for ineffectiveness of cash flow hedges (2024: £6.6m). The fair
value movement on derivatives not in hedge accounting relationships resulted in a charge of £nil (2024: £nil) in the consolidated
income statement.
At 30 September 2025, the market value of derivatives not designated as cash flow hedges under IFRS 9 is £nil (2024 £nil). The cash
flows occur and enter in the determination of profit and loss until the maturity of the hedged debt.
The table below summarises debt hedged:
Hedged debt
2025 2024
£m £m
Hedged debt maturing:
Within one year
–
–
Between one and two years
–
–
Between two and five years
550.7
476.6
Over five years
–
–
550.7
476.6
Interest rate profile – including the effect of derivatives and amortisation of issue costs:
2025
2024
Weighted Weighted
average average
interest Average Gross debt interest Average Gross debt
rate maturity Sterling Euros total rate maturity Sterling Euros total
%
years
1
£m £m £m % years £m £m £m
Fixed rate
3.1
3.4
1,050.0
–
1,050.0
3.1
4.4
1,050.0
–
1,050.0
Hedged rate
3.6
3.6
550.7
–
550.7
3.2
4.8
476.6
–
476.6
Variable rate
5.5
3.6
1.6
0.7
2.3
6.9
4.8
80.7
0.8
81.5
3.3
3.5
1,602.3
0.7
1,603.0
3.3
4.5
1,607.3
0.8
1,608.1
1. Average maturity years excluding extension options. Including extension options, with the extension to be mutually agreed between the Group and the lenders, the average maturity is 3.9 years
(2024: 4.7 years).
At 30 September 2025, the fixed interest rates on the interest rate swap contracts vary from 1.00% to 2.30% (2024: 1.00% to
2.30%); the weighted average rates are shown in the table above.
(b) Credit availability risk
Credit availability risk relates to the Group’s ability to refinance its borrowings at the end of their terms or to secure additional
financing where necessary. The Group maintains relationships with a diverse range of lenders and maintains sufficient headroom
through cash and committed borrowings. On 30 September 2025, the Group had available headroom of £532.5m, with the next
debt maturity not until July 2026.
(c) House price risk
The cash flows arising from the Group’s financial interest in property assets (CHARM) and the Tricomm Housing portfolio are
related to the movement in value of the underlying property assets and, therefore, are subject to movements in house prices.
However, consistent with the Group’s approach to house price risk across its portfolio of trading and investment properties, the
Group does not seek to eliminate this risk as it is a fundamental part of the Group’s business model.
(d) Capital risk management
The Board manages the Group’s capital through the regular review of: cash flow projections; the ability of the Group to meet
contractual commitments; covenant tests; dividend cover; and gearing (LTV). The current capital structure of the Group comprises
a mix of debt and equity. Debt is typically both current and non-current interest-bearing loans and borrowings as set out in the
consolidated statement of financial position. Equity comprises issued share capital, reserves and retained earnings as set out in the
consolidated statement of changes in equity.
Notes to the financial statements continued
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Annual Report and Accounts 2025
Group loans and borrowings have associated covenant requirements with respect to LTV and ICR. The covenants operate
on a facility by facility basis, with maximum LTV ranges between 70% – 75% and minimum ICR cover of 1.35x – 1.75x. As at
30 September 2025, the minimum headroom based on individual facilities is a 9.0% increase in LTV and 47.0% reduction in ICR.
At the year end, Group LTV was 38.4% (see page 123 for calculation) and Group ICR was 3.2x.
The Board regularly reviews all current and projected future levels to monitor anticipated compliance and available headroom
against key thresholds. LTV is reviewed in the context of the Board’s view of markets, the prospects of, and risks relating to, the
portfolio and the recurring cash flows of the business and deems the current level to be appropriate.
The Group monitors its cost of debt and Weighted Average Cost of Capital (WACC) on a regular basis. At 30 September 2025,
the weighted average cost of debt was 3.3% (2024: 3.3%). Investment and development opportunities are evaluated using a risk
adjusted WACC in order to ensure long-term Shareholder value is created.
28. Pension costs
Accounting policy
i) Defined contribution pension scheme – Obligations for contributions to defined contribution pension schemes are
recognised as an expense in the income statement in the period to which they relate.
ii) Defined benefit pension scheme – The Group currently has a defined benefit pension scheme that was closed to new
members and future accrual of benefits in 2003. The scheme is currently in surplus.
An actuarial valuation of the scheme is carried out every three years. The cost of providing benefits is determined using the
Projected Unit Credit Method, with actuarial valuations being carried out at each consolidated statement of financial position
date by a qualified actuary, for the purpose of determining the amounts to be reflected in the Group’s financial statements under
IAS 19.
The defined benefit obligation is valued by projecting the best estimate of future benefit outgoings (allowing for revaluation
to retirement for deferred members and annual pension increases in payment for all members) and then discounting to the
consolidated statement of financial position date.
The pension scheme assets comprise investments in cash managed by Rathbones Investment Management Limited, the
Trustees’ bank account, and insurance policies managed by Aviva. These assets are measured at fair value in the statement of
financial position.
The amount shown in the statement of financial position is the net of the present value of the defined benefit obligation and the
fair value of the scheme assets. When there is a surplus the Group considers the requirements of IFRIC 14 and whether there
is economic benefit available as a refund of this surplus, or through a reduction in future contributions. When an unconditional
right to future economic benefit exists, there is no restriction on the amount of surplus recognised.
There are no current service costs as the scheme is closed to new members and future accrual. The net interest amount,
calculated by applying the discount rate to the net defined benefit liability, is reflected in the income statement each year.
Actuarial gains and losses net of deferred income tax are reflected in other comprehensive income each year.
(a) Defined contribution scheme
The Group operates a defined contribution pension scheme for its employees. The assets of the scheme are held separately
from those of the Group in independently administered funds. The Group has no legal or constructive obligations to pay further
contributions if the funds do not hold sufficient assets to pay all employees the benefits relating to employee service in the
current and prior periods. Pension arrangements for Directors are disclosed in the report of the Remuneration Committee and the
Directors’ Remuneration report on pages 100 to 119. The pension cost charge in these financial statements represents contributions
payable by the Group.
The charge of £1.9m (2024: £1.7m) is included within employee remuneration in Note 10.
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Financial statementsGovernanceStrategic report
28. Pension costs continued
(b) Defined benefit scheme
In addition to the above, the Group also operates a final salary defined benefit pension scheme, the BPT Retirement Benefits
Scheme. The assets of the scheme are held separately in funds administered by Trustees and are invested with Rathbones
Investment Management Limited, an independent investment manager. Pension benefits are linked to the members’ final
pensionable salaries and service at their retirement date (or date of leaving if earlier). The Trustees are responsible for running the
scheme in accordance with the scheme’s trust deed and rules, which sets out their powers. The Trustees of the scheme are required
to act in the best interests of the beneficiaries of the scheme. There is a requirement that at least one-third of the Trustees are
nominated by the members of the scheme.
There are three categories of pension scheme members:
• Active members: currently employed by the Group. No benefits have accrued since 30 June 2003, although active members
retain a final salary link.
• Deferred members: former employees of the Group.
• Pensioner members: in receipt of pension.
The defined benefit obligation is valued by projecting the best estimate of future benefit outgoings (allowing for revaluation
to retirement for deferred members and annual pension increases in payment for all members) and then discounting to the
consolidated statement of financial position date. In the period up to retirement, benefits receive increases linked to Consumer
Prices Index (‘CPI’) inflation (subject to a cap of no more than 5% p.a.). After retirement, benefits receive fixed increases of 5%
p.a. The valuation method used is known as the Projected Unit Credit Method. The approximate overall duration of the scheme’s
defined benefit obligation as at 30 September 2025 was 12 years.
The IAS 19 calculations for disclosure purposes have been based upon the results of the actuarial valuation carried out as at 1 July
2022, updated to 30 September 2025, by a qualified independent actuary.
i) Principal actuarial assumptions under IAS 19 (p.a.)
2025 2024
% %
Discount rate
5.8
5.0
Retail Price Index (‘RPI’) inflation
3.0
3.3
Consumer Prices Index (‘CPI’) inflation
2.3
2.6
Rate of increase of pensions in payment
5.0
5.0
ii) Demographic assumptions
2025
2024
Mortality tables for pensioners
S3PA base tables CMI 2024 mortality
S3PA base tables CMI 2023 mortality projections
projections 1.25% p.a. long-term rate 1.25% p.a. long-term rate
Mortality tables for non-pensioners
As for pensioners
As for pensioners
iii) Life expectancies
30 September 2025
30 September 2024
Male
Female
Male
Female
Life expectancy for a current 60-year-old (years)
86
89
86
89
Life expectancy at age 60 for an individual aged 45 (years)
87
90
87
90
Risks
During the prior year, the Trustees de-risked the scheme from risks including changes in bond yields, asset volatility, credit risk,
inflation risk, and changes in life expectancy. The Trustees used scheme assets previously invested in bonds to purchase an annuity
policy that fully matches all previously uninsured liabilities.
During the year ended 30 September 2025, 100% of scheme liabilities are matched by the scheme’s annuity policies and future
fluctuations in the value of those liabilities will be offset by the policies held as scheme assets. This arrangement is known as a
pension buy-in.
Notes to the financial statements continued
166
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Annual Report and Accounts 2025
Market value of scheme assets
The assets of the scheme are invested in a diversified portfolio as follows:
30 September 2025
30 September 2024
Market value % of total Market value % of total
£m scheme assets £m scheme assets
Bonds
–
–
1.0
4
Cash
6.3
26
5.5
20
Insurance policies
18.3
74
20.5
76
Total value of assets
24.6
100
27.0
100
The actual return on assets over the year was:
(0.6)
0.2
The assets of the scheme are held with Rathbones Investment Management Limited in a managed fund. All of the assets listed have
a quoted market price in an active market with the exception of the insurance policy asset where its value has been set equal to the
secured pensioner liability.
The change in the market value of the scheme assets over the year was as follows:
2025 2024
£m £m
Market value of scheme assets at the start of the year
27.0
28.6
Interest income
1.2
1.5
Employer contributions
–
–
Administration expenses paid
(0.2)
(0.5)
Actuarial return on assets less interest
(1.9)
(1.3)
Benefits paid
(1.5)
(1.3)
Market value of scheme assets at the end of the year
24.6
27.0
The change in value of the defined benefit obligation over the year was as follows:
2025 2024
£m £m
Value of defined benefit obligation at the start of the year
20.5
19.0
Interest on pension scheme liabilities
1.0
1.0
Remeasurement of changes in financial assumptions
(1.6)
1.8
Benefits paid
(1.5)
(1.3)
Value of defined benefit obligation at the end of the year
18.4
20.5
Amounts recognised in the consolidated statement of comprehensive income:
2025 2024
£m £m
Actuarial return on assets less interest
(1.9)
(1.3)
Remeasurement of defined benefit obligation
1.6
(1.8)
(0.3)
(3.1)
The loss shown in the above table of £0.3m (2024: £3.1m) has been included in the consolidated statement of comprehensive
income on page 133.
The surplus is recognised because the Group considers there is economic benefit available through a reduction in future
contributions or the eventual return of the surplus.
Future funding obligation
The Trustees are required to carry out an actuarial valuation every three years. The last actuarial valuation of the scheme was
performed by the Actuary for the Trustees as at 1 July 2022. This valuation revealed a funding shortfall of £nil and as a result of this
valuation, the Group agreed to cease the existing recovery plan and pay no additional contributions.
Sensitivity analysis
Set out below is an analysis of how the scheme deficit would vary with changes to the key actuarial assumptions:
Discount rate movement of 0.25% p.a. Increase/(decrease) in deficit of £0.5m/(£0.5m)
Life expectancies movement of one year Increase/(decrease) in deficit of £0.8m/(£0.8m)
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Financial statementsGovernanceStrategic report
29. Issued share capital
Accounting policy
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
Acquisition of and investment in own shares
The Group acquires its own shares to enable it to meet its obligations under the various share schemes in operation. No gain or
loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own shares. The acquisition cost of
the shares is debited to an investment in own shares reserve within retained earnings.
Where the Group buys back its own shares as treasury shares it adopts the accounting as described above. Where it
subsequently cancels them, issued share capital is reduced by the nominal value of the shares cancelled and this same amount is
transferred to the capital redemption reserve.
Issue of share capital
2025 2024
£m £m
Allotted, called-up and fully paid:
743,115,308
(2024: 743,109,586) ordinary shares of 5p each
37.2
37.2
The Group paid £0.1m (2024: £0.1m) to the Share Incentive Plan during the year for the purchase of matching shares and free shares
in the scheme. The total cost of acquiring own shares of £0.1m (2024: £0.1m) has been deducted from retained earnings within
Shareholders’ equity.
As at 30 September 2025, share capital included 2,345,900 with a market value at 30 September 2025 of £4.5m (2024: 3,316,840,
market value £8.0m) shares held by The Grainger Employee Benefit Trust and 1,506,300 with a market value at 30 September
2025 of £2.9m (2024: 1,506,300, market value £3.8m) shares held by Grainger plc as treasury shares. The total of these shares
is 3,852,200 (2024: 4,823,140) with a nominal value of £192,610 (2024: £241,157) and a market value as at 30 September 2025 of
£7.5m (2024: £11.8m).
Movements in issued share capital during the year and the previous year were as follows:
Nominal value
Number £’000
At 30 September 2023
743,042,056
37,152
Options exercised under the SAYE scheme (Note 30)
67,530
3
At 30 September 2024
743,109,586
37,155
Options exercised under the SAYE scheme (Note 30)
5,722
–
At 30 September 2025
743,115,308
37,155
30. Share-based payments
Accounting policy
The Group operates a number of equity-settled, share-based compensation plans comprising awards under a Long-Term
Incentive Plan (‘LTIP’), a Deferred Bonus Plan (‘DBP’), a Deferred Bonus Share Plan ('DBSP'), a Share Incentive Plan (‘SIP’) and
a Save As You Earn (‘SAYE’) scheme. The fair value of the employee services received in exchange for the grant of shares and
options is recognised as an employee expense. The total amount to be expensed over the vesting period is determined by
reference to the fair value of the shares and options granted.
For market-based conditions, the probability of vesting is taken into account in the fair value calculation and no revision is made
for the number of shares or options expected to vest. For non-market conditions, each year the Group revises its estimate of
the number of options or shares that are expected to vest. It recognises the impact of the revision to original estimates, if any,
in the consolidated income statement with a corresponding adjustment to equity.
Awards that are subject to a market-based performance condition are valued at fair value using the Monte Carlo simulation
model. Awards not subject to a market-based performance condition are valued at fair value using the Black-Scholes
valuation model.
When share based payment obligations are satisfied by the issue of new shares, the proceeds received, net of any directly
attributable transaction costs, are credited to share capital (nominal value) and share premium.
Notes to the financial statements continued
168
Grainger plc
Annual Report and Accounts 2025
Share awards
LTIP
DBSP
DBP
SAYE
18 December
18 December 2024 08 July 2025
2024 Non-market- 18 December 18 December 3-year
Award date Market-based based 2024 2024 scheme
Number of shares on grant
483,988
1,129,305
312,133
79,843
335,556
Exercise price (£)
–
–
–
–
1.73
Vesting period from date of grant (years)
3
3
3
1-3
3
Exercise period after vesting (years)
7
7
3
3
–
Share price at grant (£)
2.25
2.25
2.25
2.25
2.08
Expected risk free rate (%)
4.2
4.2
N/A
N/A
3.8
Expected dividend yield (%)
N/A
N/A
3.8
3.8
3.8
Expected volatility (%)
24.7
24.7
N/A
N/A
25.8
Fair value (£)
1.07
2.25
2.25
2.25
0.48
The expected volatility figures used in the valuation were calculated based on the historical volatility over a period equal to the
expected term from the date of grant.
The share-based payments charge recognised in the consolidated income statement is £3.6m (2024: £2.8m).
(a) LTIP scheme
For the LTIP awards granted in FY25, the LTIP performance period is the three financial years commencing at the beginning of
the financial year in which the grant date fell (i.e the three year period to the end of FY27). 30% of these awards are subject to an
absolute Total Shareholder Return performance condition, 30% are subject to Total Property Income Return, 30% are subject to
achieving Secured PRS Investment targets, and the final 10% are subject to achieving carbon emissions performance conditions.
For the awards granted in FY24, the LTIP performance period is the three financial years commencing at the beginning of the
financial year in which the grant date fell (i.e the three year period to the end of FY26). 30% of these awards are subject to an
absolute Total Shareholder Return performance condition, 30% are subject to Total Property Income Return, 30% are subject to
achieving Secured PRS Investment targets, and the final 10% are subject to achieving carbon emissions performance conditions
For the awards granted in FY23, the LTIP performance period was the three financial years commencing at the beginning of the
financial year in which the grant date fell (i.e the three year period to the end of FY25). 33% of the awards were subject to an
absolute Total Shareholder Return performance condition, 33% were subject to Total Property Return, and the final 33% were
subject to achieving Secured PRS Investment targets.
The movement in LTIP awards during the year is as follows:
Opening Awards Awards Awards Closing
Awards balance granted vested lapsed balance
LTIP
6 February 2020
274,231
–
(274,231)
–
–
10 December 2020
138,974
–
(27,708)
–
111,266
11 October 2021
1
333,020
–
(246,677)
–
86,343
16 December 2021
828,407
–
(102,051)
(458,433)
267,923
28 September 2022
61,712
–
(27,597)
(34,115)
–
12 December 2022
1,264,686
–
–
–
1,264,686
11 December 2023
1,263,756
–
–
–
1,263,756
18 December 2024
–
1,613,293
–
–
1,613,293
Total
4,164,786
1,613,293
(678,264)
(492,548)
4,607,267
1. The grant of LTIP awards on 11 October 2021 was made to Rob Hudson as replacement of awards made by his previous employer. See Note 8 of the remuneration report on page 91 of the September
2021 year Annual Report and Accounts for further details.
(b) DBSP, DBP and EDBP schemes
Awards granted under the DBSP relate to the compulsory deferral of 25% of any bonus paid to Executive Directors as described in
the Remuneration Committee report. Shares granted in this scheme have no further performance conditions other than continued
employment. There is a three-year vesting period from the date of grant, after which time participants can choose to exercise
their awards.
Awards granted under the DBP scheme relate to the compulsory deferral of 25% of any bonus paid to other senior managers and
have no specific performance conditions other than employees in the scheme continuing to be employed. There is a three-year
vesting period from the date of grant. One-third of the awards vest at the end of each year. Participants can choose to exercise their
awards on vesting or to retain their awards within the plan until the end of the third year at which point a 50% matching element is
added to their award entitlement.
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Financial statementsGovernanceStrategic report
30. Share-based payments continued
In addition to the DBP scheme, an enhanced DBP scheme (‘EDBP’) operated until December 2023. The enhanced scheme operates
in exactly the same way as the normal DBP scheme except that if participants retain their awards within the plan until the end
of the fifth year, a further additional 50% matching award is added to their award entitlement. Awards under the DBSP/DBP/
EDBP have been valued based on the share price at the date of the award less the dividend yield at the award date as there is no
entitlement to dividends during the vesting period.
The movement in DBSP/DBP/EDBP awards during the year is as follows:
Opening Awards Awards Awards Closing
Awards balance granted exercised lapsed balance
DBSP
1 December 2019
16,429
–
(16,429)
–
–
10 December 2020
43,397
–
(43,397)
–
–
16 December 2021
95,314
–
(95,314)
–
–
12 December 2022
218,255
–
–
–
218,255
11 December 2023
231,858
–
–
–
231,858
18 December 2024
–
312,133
–
–
312,133
DBP
16 December 2021
31,970
–
(29,291)
–
2,679
12 December 2022
52,019
–
–
–
52,019
11 December 2023
56,240
–
–
–
56,240
18 December 2024
–
79,843
–
–
79,843
EDBP
21 December 2017
8,218
–
(8,218)
–
–
17 December 2018
7,030
–
(7,030)
–
–
17 December 2019
42,700
–
(31,088)
–
11,612
10 December 2020
50,108
–
(6,208)
–
43,900
16 December 2021
17,864
–
–
–
17,864
12 December 2022
23,460
–
–
–
23,460
11 December 2023
20,340
–
–
–
20,340
Total
915,202
391,976
(236,975)
–
1,070,203
(c) SAYE share option scheme
Awards under the SAYE scheme have been valued at fair value using a Black-Scholes valuation model. The number of shares subject
to options as at 30 September 2025, the periods in which they were granted and the periods in which they may be exercised and the
movement during the year are given below:
Awards
Exercise price Exercise Opening Awards Awards lapsed/ Closing
(pence)
1
period balance granted exercised cancelled balance
SAYE
2019
193.0
2022-25
7,771
–
(3,108)
(4,663)
–
2020
245.0
2023-26
39,179
–
–
(7,346)
31,833
2021
234.0
2024-27
52,114
–
(2,614)
(37,962)
11,538
2022
248.0
2025-28
65,686
–
–
(50,843)
14,843
2023
203.0
2026-29
422,304
–
–
(211,253)
211,051
2024
200.0
2027-30
169,117
–
–
(104,143)
64,974
2025
173.0
2028-31
–
335,556
–
(10,606)
324,950
756,171
335,556
(5,722)
(426,816)
659,189
Weighted average exercise price (pence per share)
210
173
212
210
191
1. Exercise prices have been adjusted to reflect the impact of the 2019 rights issue.
For those share options exercised during the year, the weighted average share price at the date of exercise was 238.5p
(2024: 227.2p). For share options outstanding at the end of the year, the weighted average remaining contractual life was 1.9 years
(2024: 2.1 years). There were 45,467 (2024: 47,065) share options exercisable at the year end with a weighted average exercise price
of 245.9p (2024: 246.2p).
(d) SIP scheme
Awards under the SIP scheme have been based on the share price at the date of the award.
Notes to the financial statements continued
170
Grainger plc
Annual Report and Accounts 2025
31. Changes in equity
The consolidated statement of changes in equity is shown on page 135. Further information relating to reserves is provided below.
Movements on the retained earnings reserve are set out in Note 32.
(a) Merger reserve
The merger reserve arose when the Company issued shares in partial consideration for the acquisition of City North Group plc in the
year ended 30 September 2005. The issue satisfied the provisions of Section 612 of the Companies Act 2006 (formerly Section 131
of the Companies Act 1985) and the premium relating to the shares issued was credited to a merger reserve.
(b) Cash flow hedge reserve
The fair value movements on those derivative financial instruments qualifying for hedge accounting under IFRS 9 are taken to this
reserve net of tax.
32. Movement in retained earnings
The retained earnings reserve comprises various elements, including:
Treasury shares bought back and cancelled
Included within retained earnings at 30 September 2025 is a balance of £7.8m (2024: £7.8m) relating to treasury shares bought
back and cancelled.
Investment in own shares
Included within retained earnings at 30 September 2025 is a balance of £0.6m (2024: £0.6m) relating to investments in own shares.
33. List of subsidiaries, joint ventures and associates
A full list of all subsidiaries, joint ventures, associates and other related undertakings as at 30 September 2025 is set out in the
Notes to the parent Company financial statements on pages 175 and 179.
The following subsidiaries will take advantage of the audit exemption set out within Section 479A of the Companies Act 2006 for
the year ended 30 September 2025.
Companies House
Company registered number
Atlantic Metropolitan (U.K.) Limited
01628078
BPT (Bradford Property Trust) Limited
00252992
BPT (Residential Investments) Limited
00359346
BPT Limited
00229269
Bromley Property Holdings Limited
04132693
Bromley Property Investments Limited
04066391
Crossco (No. 103) Limited
02929000
Derwent Developments (Curzon) Limited
05887266
Derwent Developments Limited
01899218
Faside Estates Limited
SC019680
Grainger (Brook Place 2) Limited
15672916
Grainger (Exmouth Junction) Limited
15984036
Grainger (Hallsville Block D1) Limited
12170837
Grainger (Hallsville Residential) Limited
14669820
Grainger (Hallsville) Limited
118340 99
Grainger (Hornsey) Limited
04810257
Grainger (Octavia Hill) Limited
05654027
Grainger (YP 2) Limited
16138950
Grainger Asset Management Limited
04417232
Grainger Bradley Limited
08324941
Grainger Development Management Limited
03146573
Grainger Developments Limited
06061419
Grainger Employees Limited
05019636
Grainger Finance (Tricomm) Limited
08451352
Companies House
Company registered number
Grainger Housing & Developments Limited
02018842
Grainger Invest No.1 Limited Liability Partnership
OC312947
Grainger Invest No.2 Limited Liability Partnership
OC317919
Grainger Kensington & Chelsea Limited
08151345
Grainger Maidenhead Limited
03709575
Grainger Newbury Limited
03904336
Grainger OCCC Limited
07557656
Grainger Properties Limited
03910945
Grainger RAMP Limited
07560835
Grainger Real Estate Limited
04170173
Grainger Residential Management Limited
04974 627
Grainger PRS Limited
05789357
Grainger Seven Sisters Limited
0
6111428
Grainger Treasury Property Investments Limited LP 011846
Partnership
Grainger Treasury Property (2006) Limited Liability OC325497
Partnership
Grainger Tribe Limited
11055318
GRIP UK Property Developments Limited
10626824
Margrave Estates Limited
00332564
MREF III Newcastle Operations Limited
10606762
PHA Limited
06734 419
West Waterlooville Developments Limited
03047254
The parent Company has guaranteed the debts and liabilities of the above subsidiaries as at 30 September 2025 in accordance
with Section 479C of the Companies Act 2006. The parent company has assessed the probability of loss under the guarantees
as remote.
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34. Related party transactions
During the year ended 30 September 2025, the Group transacted with its associates and joint ventures (details of which are set out
in Notes 18 and 19). The Group provides a number of services to its associates and joint ventures. These include property and asset
management services for which the Group receives fee income. The related party transactions recognised in the income statement
and statement of financial position are as follows:
2025
2024
Fees Year end Fees Year end
£’000 recognised balance recognised balance
Connected Living London (BTR) Limited
557
343
735
870
Lewisham Grainger Holdings LLP
140
653
226
513
Vesta LP
804
216
811
214
1,501
1,212
1,772
1,597
2025
2024
Year end Year end
Interest loan Interest Interest loan Interest
recognised balance rate recognised balance rate
£’000 £m % £’000 £m %
Curzon Park Limited
–
18.1
Nil
–
18.1
Nil
Lewisham Grainger Holdings LLP
921
13.2
5.8
1,196
11.5
11.0
Vesta LP
–
14.5
Nil
–
14.5
Nil
921
45.8
1,196
44.1
Details of the Group’s other related parties are provided in Note 10 in relation to key management compensation and Note 28 in
relation to the Group’s retirement benefit pension scheme.
35. Leases
Accounting policy
i) Group as lessor – Rental income from operating leases is recognised on a straight-line basis over the lease term. The net
present value of ground rents receivable is, in the opinion of the Directors, immaterial. Accordingly, ground rents receivable
are taken to the consolidated income statement on a straight-line basis over the period of the lease. Properties leased out to
tenants are included in the consolidated statement of financial position as either investment property or as trading property
under inventories.
ii) Group as lessee – The Group occupies a number of its offices as a lessee. The net present value of the lease liabilities is
recorded in the consolidated statement of financial position within trade and other payables. The leased office space is included
in the consolidated statement of financial position as a right-of-use asset in property, plant and equipment and depreciated over
the life of the lease.
(a) Group as lessor
The future aggregate undiscounted lease payments due to the Group under non-cancellable operating leases are as follows:
2025 2024
£m £m
Operating lease payments due:
Not later than one year
51.6
42.4
Greater than one year but less than two years
5.3
3.4
Greater than two years but less than three years
4.7
2.8
Greater than three years but less than four years
4.0
2.4
Greater than four years but less than five years
1.4
1.8
Greater than five years
67.3
68.7
134.3
121.5
There are no contingent rents recognised within net rental income in 2025 or 2024 relating to properties where the Group acts as
a lessor of assets under operating leases. The Group’s non-cancellable operating leases exclude regulated tenancies. Under these
agreements, tenants have the right to remain in a property for the remainder of their lives. Should the tenant require the lease to
be cancelled for any reason, they are able to do so generally with immediate effect, in which case we take vacant possession for
subsequent disposal of the property. As such, regulated tenancies are excluded from the above analysis.
Notes to the financial statements continued
172
Grainger plc
Annual Report and Accounts 2025
(b) Group as lessee
The future aggregate lease payments payable by the Group under non-cancellable operating leases are as follows:
2025 2024
£m £m
Operating lease payments due:
Not later than one year
0.6
0.7
Later than one year and not later than five years
3.0
2.5
Later than five years
2.7
3.8
6.3
7.0
Leases relating to office space used by the Group have initial terms of varying lengths, between one and ten years. Rent reviews
generally take place every five years.
36. Contingent liabilities
Properties in certain subsidiary companies form a ‘guarantee group’ with a market value of £2,392.7m and provide the security for
the Group’s core debt facility and Corporate Bonds.
Barclays Bank PLC and Lloyds Bank PLC have provided guarantees under performance bonds. As at 30 September 2025, total
guarantees amounted to £4.0m (2024: £3.2m).
37. Capital commitments
The Group has current commitments under a number of its BTR projects. The Group’s commitments, including its relevant share of
commitments to joint ventures and associates, are as follows:
2025 2024
£m £m
Wholly-owned Group subsidiaries
227.0
303.7
227.0
303.7
173
Financial statementsGovernanceStrategic report
Notes
2025
£m
2024
£m
Fixed assets
Investments 2 2,567.2 2,594.0
Current assets
Trade and other receivables 3 107.8 88.4
Cash at bank and in hand 52.3 58.1
160.1 146.5
Creditors: amounts falling due within one year 4 (8.6) (8.6)
Net current assets 151.5 137.9
Total assets less current liabilities 2,718.7 2,731.9
Creditors: amounts falling due after more than one year
Interest-bearing loans and borrowings 5 (908.3) (832.5)
NET ASSETS 1,810.4 1,899.4
Capital and reserves
Issued share capital 6 37.2 37.2
Share premium account 817.9 817.9
Capital redemption reserve 0.3 0.3
Retained earnings 955.0 1,044.0
TOTAL EQUITY 1,810.4 1,899.4
The loss for the year for the Company was £34.4m (2024: £404.4m profit).
The financial statements on pages 174 to 179 were approved by the Board of Directors on 19 November 2025 and were signed on
their behalf by:
Helen Gordon Rob Hudson
Director Director
Company registration number: 00125575
Parent company statement of changes in equity
Issued share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Total
equity
£m
Balance as at 1 October 2023 37.2 817.8 0.3 687.9 1,543.2
Profit for the year – – – 404.4 404.4
Award of SAYE shares – 0.1 – – 0.1
Purchase of own shares – – – (0.1) (0.1)
Share-based payments charge – – – 2.8 2.8
Dividends paid – – – (51.0) (51.0)
Balance as at 30 September 2024 37.2 817.9 0.3 1,044.0 1,899.4
Loss for the year – – – (34.4) (34.4)
Award of SAYE shares – – – – –
Purchase of own shares – – – (0.1) (0.1)
Share-based payments charge – – – 3.6 3.6
Dividends paid – – – (58.1) (58.1)
Balance as at 30 September 2025 37.2 817.9 0.3 955.0 1,810.4
The notes on pages 175 to 179 form part of the financial statements.
Parent company statement of financial position and statementof changes in equity
As at 30 September
174
Grainger plc
Annual Report and Accounts 2025
1. Company accounting policies
(a) Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework (‘FRS 101’). The financial statements have been prepared on a going concern basis under the historical cost
convention, in accordance with the Companies Act 2006.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of
UK-adopted international accounting standards (IFRS), but makes amendments where necessary in order to comply with the
Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
The exemptions that have been applied in the preparation of these financial statements are as follows:
• A cash flow statement and related notes have not been presented.
• Disclosures in respect of new standards and interpretations that have been issued but which are not yet effective have not
been provided.
• Disclosures in respect of transactions with wholly-owned subsidiaries have not been made.
• Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instruments:
Disclosures have not been made.
• Paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based payment (details of the number and weighted average exercise prices of
share options, and how the fair value of goods or services received was determined).
• The requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures to disclose key management
personnel compensation.
The Company has taken the exemption allowed under Section 408 of the Companies Act 2006 from the requirement to present
its own profit and loss account. The loss for the year was £34.4m (2024: £404.4m profit). These financial statements present
information about the Company as an individual undertaking and not about its Group.
The following accounting policies have been applied consistently in dealing with items that are considered material in relation to
the Company’s financial statements.
(b) Going concern
The financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the
following reasons.
The Company has net assets of £1,810.4m at 30 September 2025 and has generated a loss for the period then ended of £34.4m.
The Directors of Grainger plc manage the Group’s strategy and risks on a consolidated basis, rather than at an individual entity
level. Similarly, the financial and operating performance of the business is assessed at a Grainger plc operating segment level.
For these reasons, the Directors do not prepare cash flow forecasts at an individual entity level.
In making the going concern assessment, on a consolidated basis, the Directors have considered the Group’s principal risks
and their impact on financial performance. The Directors have assessed the future funding commitments of the Group and
compared these to the level of committed loan facilities and cash resources over the medium term. In making this assessment,
consideration has been given to compliance with borrowing covenants along with the uncertainty inherent in future financial
forecasts and, where applicable, severe sensitivities have been applied to the key factors affecting financial performance for
the Group.
Further details of the Group’s going concern assessment, including the key assumptions applied, is set out in Note 1(a) on
pag e 137.
Based on these considerations, the Directors continue to adopt a going concern basis in preparing the financial statements for
the year ended 30 September 2025.
(c) Investments
Investments in subsidiaries are carried at historical cost less provision for impairment based upon an assessment of the net
recoverable amount of each investment. Historical cost represents the fair value of consideration payable by the Company
to acquire investments, with the majority of such acquisitions relating to share capital allotted to the Company by directly
held subsidiaries due to capitalisation of intragroup liabilities in those subsidiaries. This forms part of ongoing simplification
of the Group structure and settlement of intragroup balances, which lead to the increase in investments in subsidiaries.
Such acquisitions result in nil impact on the net assets position of the Company.
The net recoverable amount is determined by the statutory net assets of the subsidiary, adjusted for fair value movements
relating to trading property which is held at cost, as well as an associated deferred tax charge on the fair value adjustments.
This approach provides the most relevant indication of the net recoverable amount of a subsidiary as it provides a fair value
net asset position as at the date of assessment. To the extent that the assessment of the recoverable amount improves due to
changes in economic conditions or estimates, impairment provisions are reversed, with all provision movements recognised in
profit and loss.
Notes to the parent company financial statements
175
Financial statementsGovernanceStrategic report
1. Company accounting policies continued
(d) Ta x
Corporation tax is provided on taxable profits or losses at the current rate.
Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the end of the
reporting period, where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax
in the future have occurred at that date.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the temporary differences
are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the end of the
reporting period. Deferred tax is measured on a non-discounted basis.
(e) Own shares including treasury shares
Transactions of The Grainger Employee Benefit Trusts are included in the Company’s financial statements. The purchase of
shares in the Company by each trust and any treasury shares bought back by the Company are debited direct to equity.
(f) Share-based payments
Under the share-based compensation arrangements set out in Note 30 to the Group financial statements, employees
of Grainger Employees Limited have been awarded options and conditional shares in the Company. These share-based
arrangements have been treated as equity-settled in the consolidated financial statements. In the Company’s financial
statements, the share-based payment charge has been added to the cost of investment in subsidiaries with a corresponding
adjustment to equity.
(g) Borrowings
Borrowings are initially recognised at the fair value of consideration received, net of transaction costs incurred. Borrowings are
subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the income statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for
atleast 12 months after the statement of financial position date.
2. Investments
Cost of investment
2025
£m
2024
£m
At 1 October 4,241.4 3,758.6
Additions 5.1 482.8
At 30 September 4,246.5 4,241.4
Impairment
2025
£m
2024
£m
At 1 October 1,647.4 1,422.7
Additional provisions 45.5 246.3
Reversal of impairment provisions (13.6) (21.6)
At 30 September 1,679.3 1,647.4
Net carrying value 2,567.2 2,594.0
The Directors believe that the carrying value of the investments is supported by their recoverable amount which reflects the fair
value of the property portfolio. The recoverable amount is not regarded as a significant estimate in itself as it is based on the
underlying valuation of the property portfolio. The impact of changes to key assumptions to the valuation of the property portfolio
is shown in Note 2 of the Group financial statements.
After an assessment of recoverable amounts a net impairment of £31.9m (2024: £224.7m) has been made. The most significant
element of the overall net impairment was an impairment of £44.8m which resulted from a reduction in the net assets of BPT
Limited, as part of REIT related intragroup restructuring, together with that company's subsidiary undertakings.
A list of the subsidiaries of the Company is contained within Note 9 on pages 178 and 179.
3. Trade and other receivables
2025
£m
2024
£m
Amounts owed by Group undertakings 107.7 88.2
Other receivables 0.1 0.2
107.8 88.4
Amounts due in both 2025 and 2024 are all due within one year. The Company’s assessment of expected credit losses on amounts
owed by Group undertakings is not considered to be an area of significant judgement or estimation due to sufficient liquidity in the
Group. As such, there is no expectation of any material credit losses at the balance sheet date.
Notes to the parent company financial statements continued
176
Grainger plc
Annual Report and Accounts 2025
4. Creditors: amounts falling due within one year
2025
£m
2024
£m
Accruals and deferred income 8.6 8.6
8.6 8.6
5. Interest-bearing loans and borrowings
2025
£m
2024
£m
Variable rate – loans 215.0 140.0
Unamortised issue costs (3.5) (3.5)
211.5 136.5
Corporate bonds 700.0 700.0
Unamortised issue costs (1.9) (2.4)
698.1 697.6
Unamortised bond discount (1.3) (1.6)
Total interest-bearing loans and borrowings 908.3 832.5
The variable rate loans are secured by floating charges over the assets of the Group. The loans bear interest at rates between 1.5%
and 1.8% over SONIA.
In 2018, the Group issued a ten-year £350.0m corporate bond at 3.375% due April 2028. In 2020, the Group issued a ten-year
£350.0m corporate bond at 3.0% due July 2030.
As at 30 September 2025 unamortised costs in relation to the corporate bonds stood at £1.9m (2024: £2.4m), and the outstanding
discount was £1.3m (2024: £1.6m).
6. Issued share capital
2025
£m
2024
£m
Allotted, called-up and fully paid:
743,115,308 (2024: 743,109,586) ordinary shares of 5p each 37.2 37.2
Details of movements in issued share capital during the year and the previous year are provided in Note 29 to the Group financial
statements on page 168.
Details of share options and awards granted by the Company are provided in Note 30 to the Group financial statements on pages
168 to 170 and discussed within the Remuneration Committee’s report on pages 100 to 119.
7. Contingent liabilities
The Company has guaranteed the debts and liabilities of certain of its subsidiaries as at 30 September 2025 in accordance with
Section 479C of the Companies Act 2006 as detailed in Note 33 to the Group financial statements on page 171. The Company has
assessed the probability of loss under the guarantees as remote.
8. Other information
Dividends
The Company’s dividend policy is aligned to our strategy to grow rental income, with an equivalent of 50% of net rental income
being distributed. Around one-third of the payment is made through the interim dividend based on half year results, with the
balance paid through the final dividend, subject to approval at the AGM. The Company has distributable reserves of £912.4m to
support this policy. Information on dividends paid and declared is given in Note 14 to the Group financial statements on page 151.
Subject to approval at the AGM, the final dividend of 5.46p per share (gross) amounting to £40.4m will be paid on 20 February
2026 to Shareholders on the register at the close of business on 16 January 2026. Shareholders will again be offered the option to
participate in a dividend reinvestment plan and the last day for election is 30 January 2026. An interim dividend of 2.85p per share
amounting to a total of £21.1m was paid to Shareholders on 7 July 2025.
Auditor's remuneration
Amounts receivable by the Company’s auditor and its associates in respect of services to the Company and its associates, other
than the audit of the Company’s financial statements, have not been disclosed as the information is required instead to be disclosed
on a consolidated basis in the consolidated financial statements.
Directors’ share options and share awards
Details of the Directors’ share options and of their share awards are set out in the Remuneration Committee’s report.
177
Financial statementsGovernanceStrategic report
9. List of subsidiaries, associates and joint ventures
A full list of the Group’s subsidiaries as at 30 September 2025 is set out below:
Company
% effective
holding
Direct/
Indirect
Broxden House, Lamberkine Drive, Perth, PH1 1RA
Faside Estates Limited 100% Indirect
Citygate, St James’ Boulevard, Newcastle upon Tyne, NE1 4JE
19 Ifield Road Management Limited
2
67% Indirect
36 Finborough Road Management Limited
2
100% Indirect
Atlantic Metropolitan (U.K.) Limited 100% Direct
BPT (Assured Homes) Limited 100% Indirect
BPT (Bradford Property Trust) Limited 100% Indirect
BPT (Residential Investments) Limited 100% Indirect
BPT Limited 100% Direct
Berewood Estate Management Limited
1,2
100% Indirect
Brierley Green Management Company Limited
2
100% Indirect
Bromley Property Holdings Limited
2
100% Direct
Bromley Property Investments Limited
2
100% Indirect
Cambridge Place Management Company
Limited
2
100% Indirect
Chrisdell Limited
2
100% Indirect
City North 5 Limited
2
100% Indirect
City North Group Limited
2
100% Direct
City North Properties Limited
2
100% Indirect
Connected Living London Limited 100% Indirect
Crofton Estate Management Company Limited
2
100% Indirect
Crossco (No. 103) Limited 100% Indirect
Derwent Developments (Curzon) Limited 100% Indirect
Derwent Developments Limited 100% Indirect
Frincon Holdings 1986 Limited
2
100% Indirect
GIP Limited 100% Indirect
Globe Brothers Estates Limited
2
100% Indirect
Grainger (Aldershot) Limited 100% Indirect
Grainger (Brook Place 2) Limited 100% Indirect
Grainger (Clapham) Limited 100% Indirect
Grainger (Exmouth Junction) Limited 100% Indirect
Grainger (Hallsville) Limited 100% Indirect
Grainger (Hallsville Block D1) Limited 100% Indirect
Grainger (Hallsville Residential) Limited 100% Indirect
Grainger (Hornsey) Limited 100% Indirect
Grainger (London) Limited
2
100% Direct
Grainger (Octavia Hill) Limited 100% Indirect
Grainger (Peachey) Limited
2
100% Indirect
Grainger (Seraphina Resi) Limited 100% Indirect
Grainger (YP 2) Limited
2
100% Indirect
Grainger Asset Management Limited 100% Indirect
Grainger Bradley Limited 100% Indirect
Grainger Development Management Limited 100% Indirect
Grainger Developments Limited 100% Indirect
Grainger Employees Limited 100% Direct
Grainger Enfranchisement No. 1 (2012)
Limited
2
100% Indirect
Grainger Enfranchisement No. 2 (2012)
Limited
2
100% Indirect
Grainger Europe (No. 3) Limited
2
100% Indirect
Grainger Europe (No. 4) Limited 100% Direct
Grainger Europe Limited
2
100% Direct
Grainger Finance (Tricomm) Limited 100% Indirect
Grainger Finance Company Limited 100% Direct
Grainger Homes (Gateshead) Limited
2
100% Indirect
Grainger Homes Limited
2
100% Indirect
Grainger Housing & Developments Limited 100% Indirect
Company
% effective
holding
Direct/
Indirect
Grainger Invest (No. 1 Holdco) Limited 100% Indirect
Grainger Invest No.1
Limited Liability Partnership
100% Indirect
Grainger Invest No.2
Limited Liability Partnership
100% Indirect
Grainger Kensington & Chelsea Limited 100% Direct
Grainger Land & Regeneration Limited 100% Indirect
Grainger Maidenhead Limited 100% Indirect
Grainger Newbury Limited 100% Indirect
Grainger OCCC Limited 100% Indirect
Grainger Pearl Holdings Limited 100% Indirect
Grainger Pearl Limited 100% Indirect
Grainger Pearl (Salford) Limited 100% Indirect
Grainger Properties Limited 100% Indirect
Grainger PRS Limited 100% Indirect
Grainger RAMP Limited 100% Indirect
Grainger Real Estate Limited 100% Indirect
Grainger REIT 1 Limited
2
100% Indirect
Grainger REIT 2 Limited
2
100% Indirect
Grainger REIT 3 Limited
2
100% Indirect
Grainger Residential Limited 100% Indirect
Grainger Residential Management Limited 100% Direct
Grainger Seven Sisters Limited 100% Indirect
Grainger Southwark Limited 100% Indirect
Grainger Treasury Property
Investments Limited Partnership
100% Indirect
Grainger Treasury Property (2006)
Limited Liability Partnership
100% Indirect
Grainger Tribe Limited 100% Indirect
Grainger Trust Limited 100% Indirect
Grainger Unitholder No 1 Limited
2
100% Direct
Greit Limited
2
100% Direct
GRIP REIT PLC 100% Indirect
GRIP UK Holdings Limited 100% Indirect
GRIP UK Property Developments Limited 100% Indirect
GRIP UK Property Investments Limited 100% Indirect
H I Tricomm Holdings Limited
2
100% Indirect
Harborne Tenants Limited
2
100% Indirect
Infrastructure Investors Defence Housing
(Bristol) Limited
2
100% Indirect
Ingleby Court Management Limited
2
100% Indirect
Kings Dock Mill (Liverpool) Management
Company Limited
1,2
100% Indirect
Macaulay & Porteus Management
Company Limited
1,2
100% Indirect
Manor Court (Solihull) Management Limited
2
100% Indirect
Margrave Estates Limited 100% Indirect
MREF III Newcastle Operations Limited 100% Indirect
N & D London Investments
2
100% Indirect
N & D London Limited
2
100% Indirect
Northumberland & Durham
Property Trust Limited
100% Indirect
PHA Limited 100% Indirect
Portland House Holdings Limited
2
100% Indirect
Residential Leases Limited
2
100% Indirect
Residential Tenancies Limited
2
100% Indirect
Rotation Finance Limited
2
100% Direct
Suburban Homes Limited
2
100% Indirect
The Bradford Property Trust Limited
2
100% Indirect
Notes to the parent company financial statements continued
178
Grainger plc
Annual Report and Accounts 2025
Company
% effective
holding
Direct/
Indirect
Citygate, St James’ Boulevard, Newcastle upon Tyne, NE1 4JE
Tricomm Housing (Holdings) Limited 100% Indirect
Tricomm Housing Limited 100% Indirect
Victoria Court (Southport) Limited
2
100% Indirect
Warren Court Limited
2
100% Indirect
West Waterlooville Developments Limited 100% Indirect
Company
% effective
holding
Direct/
Indirect
218 Finney Lane, Heald Green, Cheadle, SK8 3QA
Oakleigh House (Sale) Management
CompanyLimited
62% Indirect
A full list of the Group’s associates as at 30 September 2025 is set out below:
Company
% effective
holding
Direct/
Indirect
8 Cathedral Road, Cardiff, CF11 9LJ
Capital Quarter (Western Courtyard)
CardiffManagement Limited
33% Indirect
5a Coleherne Road, London, SW10 9BS
5 Coleherne Road Management Limited 25% Indirect
8 Five Acres, Kings Langley, Hertfordshire, WD4 9JU
Trevor Square Garden
Management Company Limited
7% Indirect
31 Radipole Road, Parsons Green, Fulham, London, SW6 5DN
Company
% effective
holding
Direct/
Indirect
Stagestar Limited
2
25% Indirect
Citygate, St James’ Boulevard, Newcastle upon Tyne, NE1 4JE
45 Ifield Road Management Limited
2
33% Indirect
Sixty-Two Stanhope Gardens Limited
2
20% Indirect
Vesta (General Partner) Limited 30% Indirect
Vesta Limited Partnership 20% Indirect
Portmill House, Portmill Lane, Hitchin, SG5 1DJ
Redoubt Close Management Limited
2
3% Indirect
A full list of the Group’s joint ventures as at 30 September 2025 is set out below:
Company
% effective
holding
Direct/
Indirect
100 Victoria Street, London, SW1E 5JL
Curzon Park Limited 50% Indirect
12th Floor Aldgate Tower, 2 Leman Street, London, E1W 9US
Tacklow Limited
2
50% Indirect
16a Castlebar Road, London, W5 2DP
16 Castlebar Road Management
Company Limited
2
50% Indirect
Citygate, St James’ Boulevard, Newcastle upon Tyne, NE1 4JE
1 Ifield Road Management Limited
2
50% Indirect
31-37 Disbrowe Road Freehold Company Limited
2
50% Indirect
174 Bishops Road Limited
1,2
50% Indirect
Besson Street Limited Liability Partnership 50% Indirect
Besson Street Second Member Limited
2
50% Indirect
Connected Living London (BTR) Limited 51% Indirect
Connected Living London (RP) Limited 51% Indirect
Connected Living London (Limmo) Limited
2
51% Indirect
Company
% effective
holding
Direct/
Indirect
Connected Living London (Southall) Limited 51% Indirect
Connected Living London (OpCo) Limited
2
51% Indirect
Connected Living London (Nine Elms) Limited 51% Indirect
Connected Living London
(Woolwich) Limited
51% Indirect
Connected Living London
(Arnos Grove) Limited 51% Indirect
Connected Living London
(Bollo Lane) Limited 51% Indirect
Connected Living London
(Cockfosters) Limited 51% Indirect
Connected Living London
(Montford Place) Limited 51% Indirect
Lewisham Grainger Holdings Limited
Liability Partnership 50% Indirect
Wellesley Residents Trust Limited
1,2
50% Indirect
All subsidiaries, associates and joint ventures are incorporated in the UK except where the registered office indicates otherwise.
1. Company limited by guarantee.
2. Company is non-active.
179
Financial statementsGovernanceStrategic report
EPRA performance measures (unaudited)
1. Introduction
The European Public Real Estate Association (EPRA) is the body that represents Europe’s listed property companies. The association
sets out guidelines and recommendations to facilitate consistency in listed real estate reporting, in turn allowing stakeholders
to compare companies on a like-for-like basis. As a member of EPRA, the Group is supportive of EPRA’s initiatives and discloses
measures in relation to the EPRA Best Practices Recommendations (EPRA BPR) guidelines. The most recent guidelines, updated
inSeptember 2024, have been adopted by the Group.
The EPRA performance measures and definitions are set out below:
Performance measure Definition
1) EPRA Earnings Recurring earnings from core operational activities. This is a key measure of a company’s underlying operating
results, providing an indication of the extent to which current dividend payments are supported by earnings.
2) EPRA NRV Net asset value adjusted to include properties and other investment interests at fair value and to exclude
certain items not expected to crystallise in a long-term property business model.
3) EPRA NTA EPRA NRV adjusted to include deferred tax on assets that may be sold by the business and exclude
intangible assets.
4) EPRA NDV EPRA NRV adjusted to include the fair values of i) financial instruments, ii) debt and iii) deferred taxes.
EPRA NDV excludes goodwill recognised on a company’s statutory balance sheet.
5i) EPRA Net Initial Yield (NIY) Annualised rental income based on cash rents at the balance sheet date, less non-recoverable property
expenses, divided by the market value of the property, increased with (estimated) purchasers’ costs.
5ii) EPRA ‘topped-up’ NIY This measure incorporates an adjustment to EPRA NIY in respect of the expiration of rent-free periods
(orotherunexpired lease incentives, such as discounted rent periods and step rents).
6) EPRA Vacancy Rate Estimated Market Rent Value (ERV) of vacant space divided by ERV of the whole portfolio.
7) EPRA Cost Ratios This measure includes all administrative and operating expenses including share of joint ventures’ overheads
and operating expenses, net of any service fees, all divided by gross rental income.
8) EPRA LTV This measure includes all capital which is not equity as debt, irrespective of its IFRS classification, and is based
upon proportional consolidation, therefore including a company’s share in the net debt and net assets of joint
ventures and associates. Assets are included at fair value, net debt at nominal value.
Summary
2025 2024
EPRA Earnings £53.7m £48.0m
EPRA Earnings per share (pre tax) 7.3p 6.5p
EPRA Earnings per share (post tax) 5.5p 4.9p
EPRA NRV £2,283.1m £2,295.9m
EPRA NRV per share 307p 309p
EPRA NTA £2,216.6m £2,218.1m
EPRA NTA per share 298p 298p
EPRA NDV £2,278.0m £2,194.9m
EPRA NDV per share 307p 295p
EPRA Net Initial Yield (NIY) 3.6% 3.4%
Adjusted EPRA NIY 4.1% 3.9%
EPRA Vacancy Rate 1.9% 2.7%
Adjusted EPRA Cost Ratio (including direct vacancy costs) 37.6% 36.5%
Adjusted EPRA Cost Ratio (excluding direct vacancy costs) 36.1% 35.2%
EPRA LT V 40.2% 39.7%
Capital Expenditure £164.9m £277.8m
180
Grainger plc
Annual Report and Accounts 2025
2. EPRA Earnings
2025 2024
Earnings
£m
Shares
millions
Pence per
share
Earnings
£m
Shares
millions
Pence per
share
Earnings per IFRS income statement 102.6 738.8 13.9 40.6 738.2 5.5
Adjustments to calculate EPRA Earnings, exclude:
i) Changes in value of investment properties,
development properties held for investment and
otherinterests (26.3) – (3.6) 38.4 – 5.2
ii) Profits or losses on disposal of investment properties,
development properties held for investment and
otherinterests 1.6 – 0.2 5.8 – 0.8
iii) Profits or losses on sales of trading properties including
impairment charges in respect of trading properties (39.5) – (5.3) (49.3) – (6.7)
iv) Tax on profits or losses on disposals – – – – – –
v) Negative goodwill/goodwill impairment – – – – – –
vi) Changes in fair value of financial instruments
andassociated close-out costs 8.5 – 1.2 6.6 – 0.9
vii) Acquisition costs on share deals and non-controlling
joint venture interests – – – – – –
viii) Adjustments related to funding structure – – – – – –
ix) Adjustments related to non-operating and
exceptional items 3.3 – 0.4 5.0 – 0.7
x) Deferred tax in respect of EPRA adjustments – – – – – –
xi) Adjustments i) to viii) in respect of joint ventures 3.5 – 0.5 0.9 – 0.1
xii) Non-controlling interests in respect of the above – – – – – –
EPRA Earnings/Earnings per share 53.7 738.8 7.3 48.0 738.2 6.5
EPRA Earnings per share after tax 5.5 4.9
ix) Adjustments relate to fire safety provisions, REIT conversion costs and aborted acquisition costs as outlined within Note 3 of the
Group's financial statements.
EPRA Earnings have been divided by the average number of shares shown in Note 15 to the Group financial statements to calculate
earnings per share. EPRA Earnings per share after tax is calculated using the standard rate of UK Corporation Tax of 25.0%
(2024: 25.0%).
3. EPRA NRV, EPRA NTA and EPRA NDV
2025 2024
EPRA NRV
£m
EPRA NTA
£m
EPRA NDV
£m
EPRA NRV
£m
EPRA NTA
£m
EPRA NDV
£m
IFRS Equity attributable to Shareholders 2,039.8 2,039.8 2,039.8 1,893.7 1,893.7 1,893.7
Include/Exclude:
i) Hybrid Instruments – – – – – –
Diluted NAV 2,039.8 2,039.8 2,039.8 1,893.7 1,893.7 1,893.7
Include:
ii.a) Revaluation of IP (if IAS 40 cost option is used) – – – – – –
ii.b) Revaluation of IPUC (if IAS 40 cost option is used) – – – – – –
ii.c) Revaluation of other non-current investments 7.5 7.5 7.5 11.8 11.8 11.8
iii) Revaluation of tenant leases held as finance leases – – – – – –
iv) Revaluation of trading properties 245.4 181.8 181.8 292.4 216.4 216.4
Diluted NAV at Fair Value 2,292.7 2,229.1 2,229.1 2,197.9 2,121.9 2,121.9
Exclude:
v) Deferred tax in relation to fair value gains of IP 1.0 1.0 – 112.9 112.9 –
vi) Fair value of financial instruments (10.6) (10.6) – (14.9) (14.9) –
vii) Goodwill as a result of deferred tax – – – – – –
viii.a) Goodwill as per the IFRS balance sheet – (0.4) (0.4) – (0.4) (0.4)
viii.b) Intangible as per the IFRS balance sheet – (2.5) – – (1.4) –
Include:
ix) Fair value of fixed interest rate debt – – 49.3 – – 73.4
x) Revaluation of intangibles to fair value – – – – – –
xi) Real estate transfer tax – – – – – –
NAV 2,283.1 2,216.6 2,278.0 2,295.9 2,218.1 2,194.9
Fully diluted number of shares 742.3 742.3 742.3 743.1 743.1 743.1
NAV pence per share 307 298 307 309 298 295
181
Financial statementsGovernanceStrategic report
4. EPRA NIY
2025
£m
2024
£m
Investment property – wholly-owned 3,124.3 3,028.3
Investment property – share of JVs/Funds 67.6 66.5
Trading property (including share of JVs) 541.0 620.1
Less: developments (369.1) (401.7)
Completed property portfolio 3,363.8 3,313.2
Allowance for estimated purchasers' costs 188.9 180.5
Gross up completed property portfolio valuation B 3,552.7 3,493.7
Annualised cash passing rental income 177.6 166.1
Property outgoings (48.8) (48.8)
Annualised net rents A 128.8 117.3
Add: rent incentives 0.7 0.2
'Topped up' net annualised rent C 129.5 117.5
EPRA NIY A/B 3.6% 3.4%
EPRA 'topped up' NIY C/B 3.6% 3.4%
Gross up completed property portfolio valuation 3,552.7 3,493.7
Adjustments to completed property portfolio in respect of regulated tenancies and share of
joint ventures (545.2) (634.5)
Adjusted gross up completed property portfolio valuation b 3,007.5 2,859.2
Annualised net rents 128.8 117.3
Adjustments to annualised cash passing rental income in respect of newly completed
developments and refurbishment activity 6.6 8.3
Adjustments to property outgoings in respect of newly completed developments and
refurbishment activity (1.9) (2.4)
Adjustments to annualised cash passing rental income in respect of regulated tenancies (13.3) (15.0)
Adjustments to property outgoings in respect of regulated tenancies 3.4 4.5
Adjusted annualised net rents a 123.6 112.7
Add: rent incentives 0.7 0.2
Adjusted EPRA 'topped up' NIY c 124.3 112.9
Adjusted EPRA NIY a/b 4.1% 3.9%
Adjusted EPRA 'topped up' NIY c/b 4.1% 3.9%
5. EPRA Vacancy Rate
2025
£m
2024
£m
Estimated rental value of vacant space A 2.5 3.3
Estimated rental value of the whole portfolio B 130.0 122.9
EPRA Vacancy Rate A/B 1.9% 2.7%
The vacancy rate reflects estimated rental values of the Group’s stabilised habitable PRS units as at the reporting date.
6. EPRA Cost Ratio
2025
£m
2024
£m
Administrative expenses 36.7 35.3
Property operating expenses 46.6 44.7
Share of joint ventures expenses 1.0 0.6
Management fees (2.3) (2.6)
Other operating income/recharges intended to cover overhead expenses (3.8) (5.5)
Exclude:
Investment property depreciation – –
Ground rent costs (0.2) (0.1)
EPRA Costs (including direct vacancy costs) A 78.0 72.4
Direct vacancy costs (3.0) (2.4)
EPRA Costs (excluding direct vacancy costs) B 75.0 70.0
Gross rental income 170.2 154.8
Less: ground rent income (0.6) (0.6)
Add: share of joint ventures (gross rental income less ground rents) 0.8 0.8
Add: adjustment in respect of profits or losses on sales of properties 37.3 43.6
Gross Rental Income and Trading Profits C 207.7 198.6
Adjusted EPRA Cost Ratio (including direct vacancy costs) A/C 37.6% 36.5%
Adjusted EPRA Cost Ratio (excluding direct vacancy costs) B/C 36.1% 35.2%
EPRA performance measures (unaudited) continued
182
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Annual Report and Accounts 2025
7. EPRA LTV
2025
£m Group
Share of Joint
Ventures
Share of
Associates Combined
Borrowings from Financial Institutions 903.0 – – 903.0
Bond loans 700.0 – – 700.0
Net payables 41.8 9.8 14.6 66.2
Exclude:
Cash and cash equivalents (126.6) (3.3) (0.3) (130.2)
Net debt A 1,518.2 6.5 14.3 1,539.0
Investment properties at fair value 2,858.1 – 14.9 2,873.0
Investment properties under development 266.2 52.7 – 318.9
Properties held-for-sale 541.0 – – 541.0
Financial assets 94.4 – – 94.4
Total property value B 3,759.7 52.7 14.9 3,827.3
EPRA LTV % A/B 40.4% 12.3% 96.0% 40.2%
2024
£m Group
Share of Joint
Ventures
Share of
Associates Combined
Borrowings from Financial Institutions 908.2 – – 908.2
Bond loans 700.0 – – 700.0
Net payables 29.5 6.7 14.7 50.9
Exclude:
Cash and cash equivalents (140.1) (1.4) (0.5) (142.0)
Net debt A 1,497.6 5.3 14.2 1,517.1
Investment properties at fair value 2,720.2 – 14.5 2,734.7
Investment properties under development 308.1 52.0 – 360.1
Properties held-for-sale 620.1 – – 620.1
Financial assets 101.7 – – 101.7
Total property value B 3,750.1 52.0 14.5 3,816.6
EPRA LTV % A/B 39.9% 10.1% 97.6% 39.7%
8. Capital Expenditure
2025
£m
Trading
Properties
Investment
Properties
Group
(excl Joint
Ventures)
Share of Joint
Ventures Combined
Acquisitions 0.1 20.0 20.1 – 20.1
Development 9.5 100.8 110.3 3.9 114.2
Completed assets
– Incremental letting space – – – – –
– No incremental letting space 2.3 17.2 19.5 0.2 19.7
- Tenant incentives – – – – –
– Other material non-allocated types of expenditure – – – – –
Capitalised interest – 10.4 10.4 0.5 10.9
Total Capital Expenditure 11.9 148.4 160.3 4.6 164.9
2024
£m
Trading
Properties
Investment
Properties
Group
(excl Joint
Ventures)
Share of Joint
Ventures Combined
Acquisitions 0.2 85.9 86.1 – 86.1
Development 11.0 149.6 160.6 1.2 161.8
Completed assets
– Incremental letting space – – – – –
– No incremental letting space 3.8 13.9 17.7 – 17.7
- Tenant incentives – – – – –
– Other material non-allocated types of expenditure – – – – –
Capitalised interest – 11.6 11.6 0.6 12.2
Total Capital Expenditure 15.0 261.0 276.0 1.8 277.8
183
Financial statementsGovernanceStrategic report
Five year record (unaudited)
For the year ended 30 September 2025
2021
£m
2022
£m
2023
£m
2024
£m
2025
£m
Group revenue 248.9 279.2 267.1 290.1 262.7
Gross proceeds from property sales 187.9 174.7 193.7 274.3 168.9
Gross rental income 97.4 121.4 133.7 154.8 170.2
Net rental income 70.6 86.3 96.5 110.1 123.6
Gross fee income 2.6 2.7 3.2 2.6 2.3
Adjusted earnings 83.5 93.5 97.6 91.6 91.0
Profit before tax 152.1 298.6 27.4 40.6 102.6
Profit after tax 109.5 229.4 25.6 31.2 202.6
Dividends paid 36.8 40.0 45.7 51.0 58.1
Pence Pence Pence Pence Pence
Basic earnings per share 16.2 31.0 3.5 4.2 27.4
Dividends per share 5.2 6.0 6.7 7.6 8.3
Pence Pence Pence Pence Pence
EPRA NRV per share 316.4 332.6 317.5 309.0 307.2
EPRA NTA per share 297.2 317.5 305.2 298.4 298.3
EPRA NDV per share 284.2 334.2 314.0 295.4 306.5
Share price at 30 September 305.0 229.4 233.6 245.5 194.0
% % % % %
Total Accounting Return – NTA basis 6.3 8.6 (1.9) 0.1 2.6
Total Property Return (TPR) 7.5 7.5 0.4 1.9 3.9
184
Grainger plc
Annual Report and Accounts 2025
Other information
Shareholders’ information
Financial calendar
Ex-Dividend date 15 January 2026
Dividend record date 16 January 2026
AGM Notice December 2025
1
AGM 4 February 2026
Dividend payment date 20 February 2026
FY26 interim results announcement 14 May 2026
FY26 full year results announcement 19 November 2026
1. We intend to issue the AGM Notice to Shareholders in December 2025. We will publish an announcement via the RNS and file a copy with the National Storage Mechanism.
Share price
During FY25, the range of the closing mid-market prices of the Company’s ordinary shares were:
Price at 30 September 2025 194p
Lowest price during the year 179p
Highest price during the year 249p
Daily information on the Company’s share price can be obtained on our website www.graingerplc.co.uk.
Share listing
Grainger plc 5p ordinary are listed on the London Stock Exchange (equity shares – commercial companies) under ISIN GB00B04V1276.
Capital gains tax
The market value of the Company’s shares for capital gains tax purposes at 31 March 1982 was 2.03p.
Website
Website address www.graingerplc.co.uk
Shareholders’ enquiries
All administrative enquiries relating to shareholdings (for example, notification of change of address, loss of share certificates,
dividend payments) should be addressed to the Company’s registrar at:
shareholderenquiries@cm.mpms.mufg.com
MUFG Group
Central Square, 10th Floor
29 Wellington Street
Leeds, LS1 4DL
Share dealing service
A share dealing service is available to existing Shareholders to buy or sell the Company’s shares via MUFG Corporate Markets.
Online and telephone dealing facilities provide an easy to access and simple to use service.
For further information on this service, or to buy or sell shares, please contact: https://dealing.cm.mpms.mufg.com – online
dealing or +44 (0) 371 664 0445 (calls are charged at the standard geographical rate and will vary by provider. Calls outside the UK
are charged at the applicable international rate. Lines are open Monday to Friday, 8am to 4:30pm) – telephone dealing.
Please note that the Directors of the Company are not seeking to encourage Shareholders to either buy or sell their shares.
Shareholders in any doubt as to what action to take are recommended to seek financial advice from an independent financial
adviser authorised by the Financial Services and Markets Act 2000.
Forward-looking statements
This Report may contain certain statements that are forward-looking statements. They appear in a number of places throughout
this Report and include statements regarding Grainger’s intentions, beliefs or current expectations and those of its Officers,
Directors and employees concerning, amongst other things, Grainger’s results of operations, financial condition, liquidity, prospects,
growth, strategies and the business it operates. By their nature, these statements involve risks and uncertainty since future events
and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements
reflect knowledge and information available at the date of preparation of this Report and, unless otherwise required by applicable
law, Grainger undertakes no obligation to update or revise these forward-looking statements. Nothing in this Report should be
construed as a profit forecast. Grainger and its Directors accept no liability to third parties in respect of this update save as would
arise under English law. Information about the management of the Principal Risks and Uncertainties facing Grainger is set out
within the Report on pages 64 to 69. Any forward-looking statements in this Report speak only at the date of this Report and
Grainger undertakes no obligation to update publicly or review any forward-looking statement to reflect new information or events,
circumstances or developments after the date of this Report.
Company Secretary and Registered Office
Sapna FitzGerald
cosec@graingerplc.co.uk
Grainger plc
Citygate, St James’ Boulevard
Newcastle upon Tyne NE1 4JE
Company registration number: 00125575
Financial statementsGovernanceStrategic report
185
Other information
Glossary of terms
Adjusted earnings
Profit before tax before valuation
movements and other adjustments,
which do not form part of the normal on-
going revenue or costs of the business.
Build-to-Rent (BTR)
Housing tenure classification that
relates to residential units owned by
the private sector to provide rental
accommodation. This excludes units
owned by Government authorities and
housing associations. Previously referred
to as Private Rented Sector (‘PRS’).
CHARM
The CHARM portfolio is a financial
interest in equity mortgages held by
the Church of England Pensions Board
as mortgagee.
Dividend cover
Earnings per share divided by dividends
per share.
Earnings Per Share (EPS)
Profit after tax attributable to
Shareholders divided by the weighted
average number of shares in issue in
the year.
EBITDA margin
Earnings before interest, depreciation,
amortisation and tax, excluding
liquidated and ascertained damages,
divided by revenue.
EPRA earnings
Profit before tax before sales
profit, valuation movements and
other adjustments. This allows for
comparability with other REITs.
European Public Real Estate
Association (EPRA)
A not-for-profit association with a
membership of Europe’s leading
property companies, investors and
consultants which strives to establish
best practices in accounting, reporting
and corporate governance and to provide
high-quality information to investors.
EPRA published its latest Best Practices
Recommendations in September 2024.
Further information, including definitions
and measures adopted by Grainger can
be found on pages 180 to 183.
Estimated Rental Value (ERV)
The market rental value of lettable
space as determined by the Group’s
external valuers at the balance sheet
date. For properties which have not
yet reached practical completion,
ERV is determined by management’s
assessment of market rents.
Gross to net
Property operating expenses as a
percentage of gross rental income.
Interest cover ratio (ICR)
Profit on ordinary activities before
interest and tax divided by net
interest payable.
Investment value or market value
Open market value of a property subject
to relevant tenancy in place.
Loan to Value (LTV)
Ratio of net debt to the market value of
properties and property related assets.
This is the primary gearing metric for
the Group.
Net Initial Yield (NIY)
Annualised net passing rents as a
percentage of the property’s open
market value.
Net Rental Income (NRI)
Gross rental income less property
operating expenses, ground rents paid
and service charge expenditure.
Net Asset Value (NAV)
Net assets divided by the number of
ordinary shares in issue as at the balance
sheet date.
Net Tangible Assets (NTA)
NTA is the market value of property
assets after deducting deferred tax on
trading assets, and excluding intangible
assets and derivatives.
Occupancy
The passing rent from PRS stabilised let
units as a proportion of PRS stabilised PRI
as at the balance sheet date.
Passing net rent
Passing rent less property expenditure
at≈the balance sheet date.
Passing rent
The annual rental income receivable on a
property as at the balance sheet date.
Potential Rental Income (PRI)
Passing rent from let units plus ERV
onvacant units.
Real Estate Investment Trust
(REIT)
A company that owns, operates, or
finances income-producing real estate.
REITs allow individual investors to earn
a share of the income generated by
properties without having to buy or
manage the properties themselves.
Regulated tenancy
Tenancy regulated under the 1977 Rent
Act. Rent (usually sub-market) is set
by the rent officer and the tenant has
security of tenure.
Reversionary surplus
The difference between trading
property vacant possession value and
market value.
Stabilised
Classification of existing property, newly
completed property or property acquired
once it achieves 95% occupancy. Once an
asset is designated as stabilised the
classification is retained whilst it is held by
the Group for future rental income.
Tenanted residential
Activity covering the acquisition, renting
out and subsequent sale (usually on
vacancy) of residential units subject to a
tenancy agreement.
Total Accounting Return
The growth in the net asset value of the
Group plus dividends paid in the year,
calculated as a percentage of the opening
net asset value.
Total Property Income Return
(TPIR)/Like-for-like rental growth
(LFL)
The change in gross rental income for
occupied units in a period as a result of
tenant renewals or a change in tenant.
Applies to changes in gross rents on
a comparable basis and excludes the
impact of acquisitions, disposals and
changes resulting from refurbishments.
Total Property Return (TPR)
A performance measure which
represents the change in gross asset
value, net of capital expenditure incurred,
plus property related net income,
expressed as a percentage of opening
gross asset value.
Total Shareholder Return (TSR)
Return attributable to Shareholders
on the basis of share price growth with
dividends reinvested.
Vacant Possession (VP) value
Open market value of a property free
from any tenancy.
Weighted Average Cost of Capital
(WACC)
The weighted average cost of funding the
Group’s activities through a combination
of Shareholders’ funds and debt.
186
Grainger plc
Annual Report and Accounts 2025
Other information
Advisers and Registrar details
Financial public relations
Camarco
40 Strand
London
WC2N 5RW
Independent auditor
KPMG LLP Chartered Accountants
15 Canada Square
Canary Wharf
London
E14 5GL
Corporate Brokers
JP Morgan Cazenove Limited
25 Bank Street
London
E14 5JP
Numis Securities Limited
45 Gresham Street
London
EC2V 7BF
Registrars
MUFG Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
Corporate addresses
Newcastle
Citygate
St James’ Boulevard
Newcastle upon Tyne
NE1 4JE
Tel: 0191 261 1819
London
3rd Floor
3 More London Riverside
London
SE1 2AQ
Tel: 020 7940 9500
Greater Manchester
5 & 6 Waterman Walk
Clippers Quay
Salford
M50 3BP
Aldershot
Smith Dorrien House
Queens Avenue
Wellesley
Aldershot
Hampshire
GU11 2BT
Birmingham
Gilders Yard
14 Great Hampton Street
Birmingham
B18 6ER
View our website
www.graingerplc.co.uk
Financial statementsGovernanceStrategic report
187
Notes
188
Grainger plc
Annual Report and Accounts 2025
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Newcastle
Citygate
St James’ Boulevard
Newcastle upon Tyne
NE1 4JE
Tel: 0191 261 1819
London
3 More London Pl
3rd Floor
London
SE1 2AQ
Tel: 020 7940 9500
Greater Manchester
5 & 6 Waterman Walk
Clippers Quay
Salford
M50 3BP
Aldershot
Smith Dorrien House
Queens Avenue
Wellesley
Aldershot
Hampshire
GU11 2BT
Birmingham
Gilders Yard
Birmingham
B18 6ER
www.graingerplc.co.uk