Last checked at 5 May 2015 07:01
5 May 2015
Grainger plc ("Grainger" / the "Company" / the "Group")
GRAINGER SELLS STAKE IN SOVEREIGN REVERSIONS PORTFOLIO FOR c.£4.5M PRE-TAX PROFIT
Grainger plc, the UK's largest listed residential property owner and manager, today announces that it has agreed terms with an affiliate of the Lone Star Funds for the sale of Grainger's interest in New Sovereign Reversions Limited (Sovereign) to Lone Star Real Estate Fund III ("LSREF III"). New Sovereign Reversions Limited was a 50:50 Joint Venture between Grainger and Moorfield Real Estate Fund II ("MREF II"). This sale follows the announcement on 13 February 2015 by Moorfield Group, MREF II's asset manager, of the intention to sell the interest to LSREF III as part of a wider diversified investment portfolio.
Grainger will receive a total cash consideration of c.£18.5m subject to completion adjustments for its interest in the portfolio, representing an anticipated pre-tax profit of c.£4.5m and post-tax profit of c.£3.6m, which will be treated as a non-recurring item. Our share in the joint venture has been classified as 'held for sale' at 31 March 2015, the gain on sale is already reflected within the Company's NAV at this date. Grainger's internal rate of return including fees on its investment in the Sovereign JV over the period since its establishment in August 2010 was 14%.
As at 31 March 2015, the Sovereign portfolio comprised 767 properties primarily subject to home reversion plans, located throughout the UK.
The transaction is expected to complete by 29 May 2015 and FCA approvals for change of control have already been received.
Andrew Cunningham, chief executive of Grainger, said:
"We are pleased to announce today's sale which was a compelling opportunity to realise an attractive return on our investment and support our JV partner's wider strategic activity."
-ENDS-
For further information:
Grainger plc
Mark Greenwood / Nick On / Kurt Mueller
Tel: +44 (0) 207 940 9500
FTI Consulting
Dido Laurimore/ Tom Gough/ 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.