Billionaire Mike Ashley quietly buys stake in Grainger as he bets on build-to-rent boom
Grainger has more than more than 4,500 homes in its build-to-rent pipeline
Billionaire Mike Ashley has placed a major wager on Grainger, Britain's largest listed residential landlord in the private rental sector. Grainger's corporate filings show Ashley has acquired a 3.1 per cent interest in the build-to-rent giant via derivatives contracts in his own name. Ashley placed the wager in the form of a spread bet, which is a means of speculating on price movements without owning the underlying securities and their voting rights.The wager enables Ashley to profit from Grainger's higher stock price without facing tax bills or the legal debacle of owing Grainger's actual shares. According to Bloomberg, as Ashley did not buy the shares outright, he can bypass the 0.5 per cent stamp duty required on purchases as he bets on price movements. The move by Ashley makes him a 'silent partner' in Grainger. This means he will not have zero voting rights or a say in how the business is run. Making a move: Mike Ashley has placed a major wager on build-to-rent business GraingerGrainger shares rose 3.26 per cent or 6.20p to 196.80p on Thursday, having slipped around 9 per cent in the last year. Grainger is ploughing £1.3billion into building more than 4,500 new build-to-rent flats aimed at boosting the company's rental income by as much as £70million. The firm has spent the last few years pivoting towards build-to-rent. Read More This is how much first-time home owners spend on rent before buying - it's risen £46,621 in a decade Helen Gordon, chief executive of Grainger has been selling off a selection of the company's assets to focus on the build-to-rent sector. FTSE 250-listed company has previously cited data from the Centre for Cities flagging a 4.3million homes shortfall and findings from Savills projecting a need for up to one million new private rental homes by 2031. In its last preliminary annual accounts published in November, Grainger said its rental income grew 12 per cent to £123.6million, while pre-tax profits more than doubled year-on-year to £102.6million. Grainger upped its payout to shareholders by 10 per cent, marking 20 consecutive years of dividend hikes. Ashley's stake in retail group Frasers is estimated to still be around 73 per cent. In its latest half-year report Frasers said its revenue had increased by 5 per cent to £2.5billion, while pre-tax profit fell 2.8 per cent to £290.9million. Frasers' portfolio of brands includes the likes of Jack Wills, Sports Direct, Frasers, Flannels and GAME. DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
Share or comment on this article:
Billionaire Mike Ashley quietly buys stake in Grainger as he bets on build-to-rent boom
