The CEO of the UK’s largest listed landlord says the firm is proud to play its part in the Levelling Up agenda after doubling down on its commitment to the regions.
Newcastle based Grainger Plc, which was founded 110 years ago this year, has spent the last six years selling off older tenancies and retirements homes to become a leader in the fast-growing private rental sector (PRS).
The firm initially planned to plough £850m into PRS schemes, building and acquiring modern apartment blocks in key cities around the UK, but that investment has grown significantly to a current operational portfolio worth more than £3bn.
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Grainger CEO Helen Gordon says the firm has been focusing on the regions long before the Government called upon businesses to aid the Levelling Up agenda, with shareholders fully supportive of its plans to create new build homes outside of London.
She said: “When I started in the business we were worth £700m to £800m, whereas our operational portfolio is now over £3bn. More importantly we’ve got a pipeline of more than £2bn worth of homes, either under construction or going through planning or legals, so we’re going to see really big growth in the business.
“When Boris Johnson came to power in December 2019, the following February we raised equity from shareholders to respond to the Levelling Up agenda and as a response to that we committed to schemes in Nottingham, Derby and Sheffield. We have gone to our shareholders and said: ‘We are quite London-centric at the moment but our pipeline is mainly in the regions’.
“Our shareholders were incredibly supportive of that growth agenda. We included a scheme in Birmingham and literally the day we were fundraising they made a commitment to HS2 in Birmingham and the site is adjacent to the High Speed 2 station.”
Last year The Forge, close to Newcastle Quayside, became the company’s first PRS investment in Newcastle, and Ms Gordon says the firm is now on the hunt for more in the area.
Further investment is also being carried out as its head office at Citygate in Gallowgate, Newcastle, where more than £250,000 is being spent on creating a modern base for its 150 workers, including its new residents services team, which was launched last year.
Ms Gordon said: “We’ve got a base in Newcastle, where more people are employed than anywhere else in the UK, yet we were finding it very difficult to find sites that we were able to develop in Newcastle.
“That is still an ambition. The Forge is really a foundation point for us in Newcastle.
“One of our investment directors is based in Newcastle and is looking at everything that comes forward. Before the sale of the football club we were looking at the site adjacent to the club, although I suspect they want to hang on to that now. We’re looking all over the city really. I wouldn’t rule our remoter areas – although nothing is remote in Newcastle, I think it’s a very concentrated city that you can really get your arms around.
“We see the city as a good place to develop and in terms of affordability, a lot was developed in central Newcastle around student accommodation and that, on a per square foot basis, is much more expensive than build to rent because they are smaller units than we have.
“The cities getting levelling up right are good university cities that are managing to get graduate retention and because you’ve got good graduate retention, you then have the people who want the talent, and will relocate or bring jobs to the area.
“Newcastle has got fantastic universities, it’s got a big student population, it’s an exciting place for young people to stay, rather than go to London, but it’s also one of our oldest cities and very constrained for land in central area. But if you look at how we developed in Leeds and Manchester and in Bristol that have similar characteristics we don’t just develop right in the heart of the city centre.
“We’ve watched with interest the investment coming in to the city and that really is where you need young people to be - there, available, willing to work, willing to spend and willing to have their careers in the locale and not disappearing down to London.”
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