Grainger plc Regulatory News (GRI)

19 November 2015

Grainger plc

("Grainger", the "Group", the "Company")

Grainger Exits German JV

Grainger, the UK's largest listed residential landlord, announces that it yesterday agreed with its partner, Heitman, to bring forward their exit from their German joint venture ("MH Grainger JV Sarl", the "JV") and sell it to a large German investor, for a total consideration of c.€136m (c.£97m).

As well as representing a strong return on capital invested, this successful transaction is a further step forward in the Group's stated objective of simplifying its business model, enabling Grainger to align and focus its resources on growing its UK Private Rented Sector business. Today's announcement follows on from Grainger's previously stated intention to sell its wholly owned German assets, which is currently underway.

Grainger will receive a total gross consideration of c.€48m (c.£34m) for its 25% interest in the JV and performance related premium return on equity, subject to closing balance sheet adjustments. The sale should generate a pre-tax profit compared to the 30 September 2015 investment value of c.€16m (c.£11m) which will be treated as a non-recurring item (c.3p/share NAV benefit before tax). Grainger's internal rate of return on its investment in the German JV over the period since its establishment in late 2012 is 42%. Contracts have been exchanged with completion anticipated by 31 December 2015, subject to regulatory approval by Germany's Federal Cartel Office.

Following completion of this transaction, on a proforma basis Group LTV will reduce by c.1%.

As at 30 September 2015, the German JV portfolio comprised c.2,500 residential properties, located throughout Germany, primarily in the western regions.

Commenting, Andrew Cunningham, Chief Executive Officer, said:

"Having taken advantage of the strong investor appetite for German residential assets, this transaction is evidence of further progress in our objective to simplify the business, enabling Grainger to focus resources on its core competencies and recycle capital into growing our UK private rented sector portfolio."

-ENDS-