Landlord completed conversion into REIT last September
British entrepreneur Mike Ashley has taken a stake in Britain’s largest listed residential landlord.
In a note to market on Wednesday, Grainger PLC revealed that Ashley’s stake in the company had crossed a threshold for notification.
Ashley’s stake, acquired through financial instruments, specifically a spread bet with cash settlement, amounts to 3.1% of the firm’s shares.
The well-known businessman was previously chief executive of Frasers Group (formerly known as Sports Direct) and the owner of Newcastle United Football Club before its takeover by Saudi Arabia’s sovereign wealth fund.
According to a report in City AM, the transaction makes Ashley a ‘silent partner’ in the Newcastle-based business, meaning he will have no voting rights in the company.
Grainger completed its conversion into a Real Estate Investment Trust (REIT) in September. A REIT is a tax-efficient vehicle, under which a firm must derive at least 75% of its income from rental activities and distribute at least 90% of taxable profits as dividends.
The 11,000-home landlord said the move would save it £15m in corporation tax in its first year and help it attract investment from a wider pool of investors.
It has been shifting towards the build-to-rent model in recent years, selling equity release portfolios and its German rental business.
Grainger has 4,500 homes in its pipeline and It forecasts rental demand to grow by 20% by 2031.
In November, the landlord published its latest annual accounts, which showed an increase in its earnings and net rental income.
In the year to 30 September, it reported EPRA earnings growth (a measure of underlying growth used by investment companies) of £53.7m, up 12% on the £48m reported for the same period last year. It said it was “confident” it can increase its EPRA earnings to £60m in 2026 and £72m in 2027.
Meanwhile, its overall net rental income increased by 12% to £123.6m.
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