Grainger HY26 results: rental income growth is doing the heavy lifting
Grainger has put out a pretty solid first-half update for the six months to 31 March 2026. The headline numbers are good where it matters most for a residential landlord: net rental income rose 7.8% to £66.1 million, EPRA Earnings increased 4.0% to £31.4 million, and the interim dividend was lifted 3.0% to 2.94p per share.
That tells you the core business is moving in the right direction. People are renting the homes, rents are still rising, and management is confident enough to keep nudging the dividend higher.
Key Grainger H1 2026 numbers retail investors should focus on
| Metric | HY26 | HY25 / FY25 comparison | Change |
|---|---|---|---|
| Net rental income | £66.1 million | £61.3 million | +7.8% |
| EPRA Earnings | £31.4 million | £30.2 million | +4.0% |
| EPRA EPS | 4.2p | 4.1p | +4.0% |
| IFRS profit/(loss) before tax | £(14.6) million | £74.0 million | (120)% |
| Dividend per share | 2.94p | 2.85p | +3.0% |
| Occupancy | 95.9% | 98.0% | Lower |
| EPRA NTA per share | 290p | 298p | (3)% |
| Net debt | £1,524 million | £1,463 million | +4.0% |
| Group LTV | 40.2% | 38.4% | +186 bps |
Why the Grainger EPRA Earnings number matters more than the IFRS loss
The ugly-looking number is the IFRS loss before tax of £(14.6) million. On first glance, that looks nasty. In reality, the company is saying this was driven by valuation declines rather than a collapse in trading.
That is why property investors often focus on EPRA Earnings instead. EPRA Earnings is a sector measure of recurring earnings from the underlying property business, stripping out property valuation movements, disposal profits and some one-off items. On that basis, Grainger went from £30.2 million to £31.4 million.
So the core engine is still growing, even though the accounting value of the portfolio moved against it in the half. That distinction matters a lot with REITs and landlords, because property values can swing with interest rate sentiment even when rents keep coming in.
Build-to-rent demand stays strong, with high occupancy and rising rents
Operationally, Grainger looks in good nick. Occupancy remained high at 95.9%, customer affordability improved slightly with a rent-to-income ratio of 27%, and like-for-like rental growth came in at 3.1%.
For context, like-for-like means rental growth from comparable homes owned across both periods, so it strips out the effect of buying or completing new assets. Grainger’s build-to-rent, or BTR, portfolio delivered 2.9% rental growth, with new lets up 2.0% and renewals up 3.3%.
That is a healthy mix. It suggests Grainger is not relying purely on big hikes for new tenants – it is also retaining pricing power when existing tenants renew.
Grainger dividend increase and REIT status add income appeal
The dividend was lifted to 2.94p per share, up from 2.85p, marking the 21st consecutive period of dividend growth. That sort of consistency will catch the eye of income investors.
This is also Grainger’s first reporting period as a REIT, or real estate investment trust. In plain English, REIT status changes the tax treatment of qualifying rental profits, and the company says EPRA earnings per share now assumes an effective tax rate of nil% following the conversion.
That does not magically solve every problem, but it should make the earnings profile cleaner for a rental-focused business. The full interim dividend, amounting to £21.7 million, will be paid as a Property Income Distribution.
Property valuations, EPRA NTA and debt are the main weak spots in the H1 results
This was not a spotless update. EPRA NTA per share, which is a net asset value measure commonly used for property companies, fell to 290p from 298p. The portfolio valuation was down 1.1%, with the BTR portfolio down 1.4% after an outward yield movement of around 25 basis points.
That is market-speak for property investors demanding a higher yield, which pushes values down. Grainger also ended the half with net debt of £1,524 million and loan-to-value, or LTV, of 40.2%, up from 38.4% at year-end.
None of that is disastrous, but it is the part of the story investors should keep an eye on. When property values soften, leverage becomes more important.
Grainger refinancing, disposals and deleveraging plan look sensible
To management’s credit, they are not pretending debt does not matter. Grainger has set out a clear deleveraging plan, aiming to reduce debt by £300 million to £350 million by FY29 and bring LTV down to around 30%.
That plan is backed by disposals and operating cash flow. The company says it has around £850 million of low-yielding, non-core assets remaining in the disposal programme and expects around £200 million-plus of operating cash flow per annum.
It also extended £540 million of core banking facilities to 2033 at lower margins, which should reduce finance costs by around £1 million per annum. That is a quietly important positive because it shows lenders are still supportive and management is being proactive before cheaper legacy debt rolls off.
Grainger FY26 guidance: management is backing more earnings growth
The most bullish part of the update is the outlook. Grainger says it is on track to deliver EPRA earnings of £60 million in FY26, equivalent to 8.1p per share, and £72 million by FY29, or 9.7p per share.
Those are meaningful targets. The FY26 figure would represent 12% growth from FY25, while the FY29 target implies 35% growth from FY25.
Management is also guiding for full-year like-for-like rental growth of 3.0% to 3.5% and believes EBITDA margin can expand from 56% in FY25 to 60% by FY29. If that lands, it would show the operating platform is scaling properly rather than just getting bigger for the sake of it.
What the Renters’ Rights Act means for Grainger shareholders
Grainger sounds relaxed about the new Renters’ Rights Act, which came into force on 1 May 2026. In fact, management argues the rules may accelerate structural change, with smaller private landlords leaving the market and larger professional landlords gaining share.
That is a credible argument. Big listed operators tend to handle regulation better because they have systems, scale and compliance teams, while smaller landlords often do not.
It is still early days, so there is execution risk here, but Grainger clearly sees regulation as more of a competitive advantage than a threat. That could prove important over the next few years.
My take on the Grainger half-year results
I think this is a good update, even if the statutory loss and weaker asset values will grab some of the headlines. The rental business is growing, the dividend is growing, and the earnings guidance remains intact.
The negatives are clear enough: asset values slipped, debt rose in the half, occupancy is down from 98.0% to 95.9%, and financial headroom reduced to £251 million from £532 million. But none of those points, based on this RNS, suggest the business is under operational stress.
The big investment case still looks the same. Grainger is betting that a structurally undersupplied UK rental market, steady rent growth and a scaled BTR platform will outweigh the drag from interest rates and short-term valuation swings. On this set of numbers, that case remains very much alive.
