Grainger plc Regulatory News (GRI)

29 January 2015

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

GRAINGER AND APG'S PRS FUND, GRIP UNIT TRUST,

MAKES £33.3M INVESTMENT INTO LONDON BUILD-TO-RENT SCHEME

GRIP Unit Trust (the "Fund"), the market-let UK residential property fund owned by APG and Grainger, announces the forward purchase of a new 90,000 sq ft build-to-rent scheme from BY Development Limited ("Bouygues Development") for £33.25m. Bouygues Development, which is also the developer of the scheme, has retained a stake in the ownership of the asset, as part of its commitment to the build-to-rent sector.

The development forms part of the wider Hallsville Quarter masterplan, a major new mixed use regeneration project in Canning Town, London, which is being undertaken by Bouygues Development in partnership with the London Borough of Newham. In a highly prominent location, directly opposite Canning Town Tube Station, Hallsville Quarter forms part of the £3.7 billion Canning Town and Custom House Regeneration Programme and will become the new town centre for Canning Town.

The 16-story residential tower will provide 134 one and two bedroom apartments together with 25 car parking spaces and 4,173 square feet of resident amenity space. This purpose-built scheme has been specifically designed to provide accommodation aimed at private renters and to optimise property management efficiency. A PRS covenant has been applied and the permitted use under the lease shall be restricted for the first eight years, post practical completion, to private rented sector ("PRS") accommodation.

The transaction represents the third collaboration between Grainger and Bouygues Development, following the development of London Road, Barking, a 100-unit PRS scheme which is currently under construction, and in a consortium also with the London Pension Funds Authority which was selected by the Greater London Authority to develop a 211 unit residential development at Pontoon Dock. As with the London Road scheme, Bouygues Development will manage the development and construction process, while Grainger will assume full management responsibilities following practical completion, including property management, lettings, facility management, and fund and asset management. Construction is scheduled to begin in January 2015 with practical completion expected in Summer 2017.

GRIP was formed in 2013 by Grainger, the UK's largest listed residential landlord, and APG, Europe's largest pension fund asset manager, to invest in predominantly stabilised, market-let residential blocks and portfolios focused on London and the South East of the UK, with additional scope to invest in build-to-rent development opportunities. Grainger provides fund, asset and property management services to GRIP.

Tracey Hartley, Grainger's GRIP Fund Manager, said:

"This transaction builds on an established partnership between Bouygues Development and Grainger and is further evidence of our commitment to the UK private rented sector. We now look forward to working alongside Bouygues Development and the London Borough of Newham to deliver this exciting new long-term development.

"The demand for high-quality rented homes far outweighs supply, and PRS represents a long-term rental income and a stable yield for our investors. In line with our strategy, and with the financial support of Grainger and APG, GRIP will continue to explore further investment opportunities including build-to-rent, enabling us to offer the growing number of renters top-quality and professionally managed housing that puts the tenant first."

Nicolas Guerin, Managing Director of Bouygues Development, said:

"We are very pleased to close our second build-to-rent transaction in partnership with Grainger, with whom we have worked from concept design stage to create a bespoke PRS product of high quality in the exciting new mixed-use regeneration of Canning Town. We are firm believers in the build-to-rent sector and the PRS tower at Hallsville Quarter underlines our ongoing commitment to deliver purpose-built, professionally-managed, and institutional-quality homes for communities in London.

"Our strong partnership with Grainger brings together expertise in development, design, construction, property and asset management to create a formidable team. We will not only meet the aspirations of Londoners looking for a better answer to their rental needs, but also continue to work alongside our partners at the London Borough of Newham to drive the economic growth of this important new focal point for the local community of Canning Town."

ENDS

For further information:

Grainger plc

Kurt Mueller, Director of Corporate Affairs

Tel: +44 (0) 207 940 9500

FTI Consulting

Dido Laurimore/ Nick Taylor/ Ellie Sweeney

Tel: +44 (0) 20 3727 1000

Grainger plc - Company background information

Grainger plc is the UK's largest listed residential property owner and manager, with c £3.2bn of residential assets under management across the UK and Germany. Grainger was established in 1912 in Newcastle upon Tyne, where it remains headquartered. Grainger is a constituent of the FTSE 250 on the London Stock Exchange and the FTSE4Good index. Grainger was awarded the UK's Residential Asset Manager of the Year at the RESI Awards in 2014, 2013 and 2012.

For more information on Grainger visit: www.graingerplc.co.uk

Bouygues Development Ltd - Company background information

· Bouygues Development is an experienced property development company focused on creating places. Community is at the heart of its projects, which are designed to create a better environment and an improved quality of life for those who use them.

· Bouygues Development is part of the global Bouygues Group, which has a turnover of over €33.5 billion, a talent pool of more than 52,000 people across the world and is active in 80 countries.

· With developments and offices across the UK, Bouygues Development combines global strength with local expertise.

· Bouygues Development is focused on mixed-use developments, regeneration projects, the private rented sector and student accommodation schemes. Uliving, its joint venture with Derwent Living, is one of the leading providers of university accommodation in the UK. It currently has over 5,000 new student rooms in development.

· Bouygues Development tends to work in partnership with local authorities or private landowners. It is currently delivering more than 15 schemes in the UK, with a gross development value in excess of £1.2 billion.

· Its schemes minimise their impact on the environment and are considerate to their social and economic responsibilities to the wider community.

· Further information is available at www.bouygues-development.com.

Notes to Editors on London's Canning Town - Hallsville Quarter

Bouygues Development is delivering one of the most exciting and significant town centre regeneration projects in London's Canning Town. Forming part of the £3.7 billion Canning Town and Custom House Regeneration Programme, 'Hallsville Quarter' as it is known will act as the catalyst for the transformation of the wider area, helping to form a new, thriving and prosperous district centre for this emerging area of East London.

Measuring six hectares, Hallsville Quarter will reconnect the areas north and south of the A13 flyover - i.e. Canning Town Corner with Barking Road and Rathbone Market - creating a vibrant, accessible and safe Town Centre. The western boundary of the site is formed by Silvertown Way, which runs south towards the Royal Docks.

The Canning Town Transport Interchange (Jubilee Line, the Docklands Light Railway and buses) borders the site to the west, across Silvertown Way. The site has a PTAL 6a rating.

Over typically five phases the masterplan will deliver up to 1,130 mixed tenure housing units, over 3,000 sq m of leisure, c30,000 sq m of retail space, and 3,000 sq m of space for community facilities and a hotel of up to 6,000 sq m amongst other uses. New pedestrian links, improvements to the public realm under the A13 flyover and cyclist provision are also included, as well as up to 1,150 secure parking spaces. The entire development area will be pedestrian-only with all public spaces maintained by a developer-led management company.

Homes will be provided around private communal spaces and internal gardens or courtyards, which will be elevated above ground level. The balanced mixed tenure housing solution and an integrated and tenure-blind management regime will create an accessible and secure Town Centre for residents and visitors alike.