the lockdown, shares in listed residential firms were trading at a 13% to 14%
premium to net asset value – the highest seen in the market since 2015 –
meaning investors were willing to pay a higher price for the shares than their
That premium fell to a 1% discount at the end of February as the
pandemic struck. By the end of March, shares in UK-listed residential property
firms were trading at an average discount of 16% to the current share price,
according to data from EPRA.
But by the end of April, the discount was 9% and by the end of
June, it had narrowed to 6%, suggesting a return of confidence in the sector.
Helen Gordon, chief executive of Grainger, said the figures
reflected the positive approach the residential sector had taken to the effects
of the pandemic.
“At a time when people have been spending more time in their
homes than ever, the UK private rented sector is proving its resilience,” she
“At Grainger, throughout the Covid-19 outbreak, our rent
collections have performed well and in line with pre-crisis levels. Following
the easing of lockdown restrictions, we’re now seeing leasing enquiries and
“In times like these, the true value of a good landlord and a
good-quality rental home is realised, and with economic uncertainty and tighter
mortgage restrictions in place, we anticipate the strong demand for quality
rental homes to endure.”
EPRA chief executive Dominique Moerenhout added that the
improvement in investor sentiment was a result of value growth in the UK
“Listed UK residential businesses are reporting valuation growth
that is outstripping asset growth, even as assets continue to rise,” he said.
“It’s an extremely positive picture for the listed sector and
may point to the v-shaped recovery some commentators have predicted.”