Growing rents - increased investment and returns
We have grown net rental income by 11% to £20.0m (HY16: £18.0m), with gains through acquisitions, improved operational efficiency and rental growth. More than half of Grainger's net rental income is derived from our PRS assets.
We have made good progress on our PRS pipeline with £439m of our £850m investment target secured, and a further £425m in the planning or legal process.
We have materially reduced property operating expenses ("gross to net") to 25.8% for HY17 from 29.2% for HY16 and 28.0% for FY16, through improving our processes and supply chain to increase efficiency and strengthen cost discipline.
Like-for-like rental growth across our entire portfolio of 3.5% in the first six months, comprised 2.9% on our PRS homes and 4.3% annualised on regulated tenancy reviews.
Our trading performance has been robust relative to the market. We have seen good overall valuation growth rates across our portfolio with our assets in the regions and outer London performing well, more than offsetting central and inner London which has been broadly flat.
Interim dividend increased by 10% to 1.60 pence per share (HY16: 1.45p), in line with our policy to distribute 50% of annual net rental income, with one third distributed at the interim stage.