Grainger enters new year with strong sales pipeline

Residential property firm Grainger said it has started the new financial year with a strong sales pipeline, despite continued economic uncertainty.

The group reported a pipeline worth £118.3m in the four months to 31 January 2012, up from £76.2m the same period a year earlier.

Completed group sales increased to £62.4m from £57.3m the year before of which £44.6m was from 210 UK properties sold at an average margin of 41.1%. This compared to 216 units for £37.4m at a margin of 38.7% during the same quarter in 2011.

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Grainger also saw growth in gross rents to around £30.4m from £25.0m previously, following the acquisition of the HI Tricomm portfolio and remainder of Grainger GenInvest.

Fee income at the UK's largest quoted residential property owner rose to £2.9m from £2.2m, boosted by revenue generated by new management mandates.

Chief executive Andrew Cunningham said, "We have started this financial year with strong sales, despite continued economic uncertainty. Sales of vacant UK properties during the first four months of the financial year have been achieved at prices 5.8% above our September 2011 valuations. We are also experiencing on-going rental growth and increased fee income generated through our property management activities."

Cunningham noted that a lack of resolution within the euro zone and problems in the banking system continue to cause uncertainty in the UK economy and drag on confidence in the residential sector.

"Against this backdrop, our portfolio is geographically weighted towards areas where the excess of demand to supply mitigates the effects of the wider economic uncertainty."

However in general he thought house prices have been more resilient against these conditions than might have been expected.

Looking ahead he added, "The composition and location of our assets provide our portfolios with resilience to the pressures on the wider economy. Focus remains on managing our portfolios to maximise value for our shareholders, whilst using our specialist property management skills to secure further recurring income streams."