Grainger Plc (LSE:GRI) looks like a potential beneficiary of the Labour government’s first Budget, according to analysts at Jefferies.
Shares have moved sideways in the past year, but the US bank expects the shares to pick up post-Budget (30 October) and ahead of the 25 October REIT conversion.
GRI has welcomed a package of proposed rental market reforms that included ending arbitrary evictions (Section 21) and greater rights to challenge excessive rent increases, but no rent controls.
Jefferies also sees the rental sector becoming more institutionalised and professional.
One risk is that changes to CGT on investment properties spark a rush of selling but discounted prices may prove to be higher than higher than any extra tax bill, Jefferies suggests.
GRI is 'REIT-able' in Oct 2025 (fiscal year 2026)- a nil costs tax election for the business in return for corporate and capital tax transparency.
"This is guided to enhance returns by 50bps annually with no other changes to the BTR business model with the corporate tax saving passed on to equity investors with a dividend uplift spread across 2025 (+22%) and 2026 (+19%)."
Buy with a 313p price target is the recommendation against a market price of 240p.