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Highlights
- Savills’ revenue stood at £932.6 million for H1 2021 ended 30 June, representing an increase of £141.2 million from the previous year’s £791.4 million.
- TLT advised Network Homes Limited, a provider of affordable housing, for the disposal of its landmark £140 million and 401-home residential build-to-rent development project in Southall, London to Grainger.
- In H1 2021, Legal & General’s board declared an interim dividend of 5.18 pence per share to shareholders, representing an increase of 5% year-on-year.
Rents in the UK are growing at the fastest pace since 2008, as people are relocating to city centres, coupled with the return of people to offices, high demand for city living and limited inventory. According to the property portal Zoopla, UK’s private sector rents rose by 4.6% year-on-year in September 2021, while rents outside London increased by 6% year-on-year.
Rents grew in the South West, Wales and the East Midlands at 9%, 7.7% and 6.9% year-on-year, respectively, during the same period. The easing of lockdown restrictions and reopening of businesses across city centres has been pivotal in driving back demand for built-up areas.
According to Zoopla’s report, London’s prices increased by 1.6% annually, compared to a decline of about 10% at the beginning of the year. Of late, there has also been a rise in demand for flexible rental accommodation, especially for students and city workers who have returned after lockdowns. Below is a detailed review of 3 build to rent (BtR) stocks – Savills, Grainger, and Legal & General Group.
(Data source: Company release)
Savills Plc (LON: SVS)
Savills is an FTSE 250 listed international real estate services provider. Savills’ revenue stood at £932.6 million for H1 2021 ended 30 June, representing an increase of £141.2 million from the previous year’s £791.4 million. It recorded a profit before tax of £63.8 million during the period, an increase of £56.1 million from £7.7 million in H1 2020.
Savills reported a 30% and 6% year-on-year revenue growth in the transactional advisory and property and facilities management business segments, respectively, in H1 2021.
Savills’ board declared an interim dividend of 6.0 pence per share to shareholders for H1 2021.
Savills’ shares closed at GBX 1,431.00, up by 0.99% at the close of the day’s trade on 15 November 2021. The market capitalisation of the company stands at £2,027.49 million, and the shares of the company returned 47.98% to shareholders in the last one year.
Grainger Plc (LON: GRI)
Grainger Plc is one of the UK’s largest residential landlord companies and has over 9,109 operational rental homes. Last month, TLT, a UK-based law company, advised Network Homes Limited, a provider of affordable housing, for the disposal of its landmark £140 million and 401-home residential build-to-rent development project in Southall, London to Grainger.
At the end of September 2021, Grainger’s property occupancy returned to 94%. It boasts of a £3 billion operational portfolio and a £2 billion pipeline.
For half-year ended 31 March 2021, Grainger Plc declared a dividend of 1.83 pence per share to shareholders.
Grainger’s shares closed at GBX 312.00 at the close of the day’s trade on 15 November 2021. The market capitalisation of the company stands at £2,312.77 million, and the shares of the company returned 7.59% to shareholders in the last one year.
Legal & General Group Plc (LON: LGEN)
Legal & General Group is a UK-based financial services company. The company also operates in the build to rent and residential property segments. Its urban pipeline encompasses 5,500 build to rent homes.
The group’s operating profit was £1,079 million, up by 14% from £946 million in H1 2020. Its profit after tax stood at £1,065 million compared to £290 million in H1 2020.
In H1 2021, Legal & General’s board declared an interim dividend of 5.18 pence per share to shareholders, representing an increase of 5% year-on-year.
Legal & General Group’s shares closed at GBX 293.50, down by 0.27% at the close of the day’s trade on 15 November 2021. The market capitalisation of the company stands at £17,570.14 million, and the shares of the company returned 21.67% to shareholders in the last one year.
