Frasers founder Mike Ashley snaps up stake in UK’s largest listed residential landlord
Fraser’s founder Mike Ashley has secured a slice of an FTSE 250 property firm in a multi-million-pound bet on the future of UK rental housing.
The UK billionaire has acquired a 3.1 per cent interest in the UK’s largest listed residential landlord in the private rented sector, Grainger, through a high-stakes financial move known as a spread bet.
The wager allows Ashley to profit from the company’s rising stock price without facing tax bills or legal hurdles of owning the actual shares.
Because he did not buy the stock outright, the move, as reported by Bloomberg, allows him to bypass the 0.5 per cent stamp duty on purchases as he bets on price movements.
The transaction makes him a ‘silent partner’ in the 11,000-home empire, meaning the retail maverick will have no say in how the company is run with zero voting rights.
In its latest financial results, rental income at Grainger – which specialises in the build-to-rent sector – jumped 12 per cent to £123.6m whilst pre-tax profit more than doubled to £102.6m.
The company also hiked its payout to shareholders by 10 per cent, marking 20 years in a row of dividend increases
Grainger’s pipeline of 4,500 apartments
Grainger is currently pouring £1.3bn into building 4,500 brand-new apartments. These projects are designed to be high-profit rentals, expected to boost the firm’s rental income by as much as £70m.
Ashley maintains an estimated 73 per cent share in the retail giant Frasers, which he set up in Maidenhead in 1982.
The retail giant – which includes Sports Direct, Flannels, House of Fraser, GAME and Jack Wills – hit £2.5bn in revenue in its latest half year report, up five per cent.
Meanwhile, pre-tax profit jumped to £412.1m from £209m the year prior, though was driven by one-off accounting gains from the gain in Hugo Boss’ stock price and the sale of Coventry arena.
Adjusted profit dipped 2.8 per cent to £290.9m.
In an unrelated move, last month, Ashley pledged nearly £670m of Frasers stock as collateral for a loan from HSBC.