Britain’s largest listed landlord says it’s going to sell off its low yield tenancy portfolio as it increases its presence in the Build To Rent sector.

A trading statement from Grainger tells its shareholders that it is “unwinding” its regulated tenancy portfolio with the properties it is selling typically fetching around 0.5% above their valuations. 

This is despite the fact that Grainger says its rental income rocket by 15% in the past year.

The statement says: “We continue to focus on our elevated asset recycling activity, selling low yielding tenanted properties, portfolios and land to reinvest the capital into our Build To Rent pipeline and new higher-yielding BTR opportunities. 

“The fundamentals of the UK residential rental market remain exceptionally supportive, as demand continues to grow and rental supply continues to be constrained as small, private landlords face increasing headwinds.

“The regulatory backdrop is accelerating this trend, whilst we also have seen an increasing number of positive statements in support for Build to Rent from the UK government.”

Chief executive Helen Gordon says the company – which is already the biggest player in the BTR niche – is preparing to convert into a real estate investment trust (REIT) at the end of 2025, marking “Grainger’s transformation away from a trading business to a total returns focused investment business underpinned by reliable, recurring income. 

“We expect earnings to grow by 50% in the medium term through the delivery of our committed BTR investment pipeline. Today’s announcement of 15 per cent net rental income growth demonstrates the progress in the delivery of this.”