Ground Rents Regulatory News (GRIO)

Ground Rents Income Fund plc

(the 'Company')

STUDENT GROUND RENT DISPOSAL AT 4% PREMIUM TO LATEST VALUATION

Ground Rents Income Fund plc announces the sale of its freehold ground rent interests in Bristol and Exeter, for a combined price of £3.45 million. The assets currently generate annual rent of £113,991 and are operated by Vita Student ('Vita') as purpose built student accommodation. The price represents a 4% premium to the 30 September 2023 independent valuation of £3.30 million and reflects a net initial yield of 3.1%. The assets are being acquired by the Company's long leaseholder.

Both assets were acquired from Vita in February 2014 for £2.42 million and were part of a six asset headlease restructure that generated an apportioned receipt of £354,000 for the subject assets.

The disposal is in line with the Company's change of strategy, approved by shareholders in 2023, to realise assets in a controlled, orderly and timely manner. Further disposals are planned, with significant work ongoing to improve the liquidity of the underlying portfolio, but uncertainty relating to leasehold reform means that transactional volumes are very low across the ground rent sector. The disposal proceeds will be used to repay debt and also act as a cash reserve against possible building safety related costs and expenses.

As set out in the AGM notice and Circular, a full update on progress implementing the strategy and leasehold reform will be provided with the Company's year-end accounts that are due to be issued before 30 June 2024.

For further information:?

Notes to editors:

Ground Rents Income Fund plc is a closed-ended real estate investment trust, listed on The International Stock Exchange and traded on the SETSqx platform of the London Stock Exchange.

Schroder Real Estate Investment Management Limited (the 'Manager') was appointed as the Company's Alternative Investment Fund Manager in May 2019 to support the Company's Board with the headwinds related to building safety and leasehold reform.

During the first half of 2023 the Board and Manager carried out an extensive shareholder consultation on proposals to change the Continuation Vote mechanism included in the Articles dating from 2012, as well as proposed changes to the Investment Policy. These proposals received strong support from shareholders and resulted in a new Continuation Resolution and Investment Policy. The new Investment Policy adopts a strategy of realising the Company's assets in a controlled, orderly and timely manner for shareholders, whilst continuing to deliver best-in-class residential asset management including fairness, transparency, and affordability for leaseholders.

On 9 November 2023, the Government published a consultation on restricting the level of ground rent which leaseholders in England and Wales pay for existing leases. The consultation represents a significant shift in the Government's approach to leasehold reform and could have a materially adverse impact on the value of the Company's underlying portfolio. The Company submitted a comprehensive response to the consultation on 17 January 2024 and has, inevitably, further delayed the work required to finalise the year end accounts. The Company has kept shareholders informed of this consultation, including through a regulatory announcement made on 20 November 2023, which can be found at: https://tisegroup.com/market/news/330499

The potential outcome and timing of further legislative change following the Government consultation remains highly uncertain, and the Company will notify shareholders when there is further clarity. The Company is also in discussions with its lender regarding an extension of its loan facility that expires in January 2025, and expects to provide an update on progress within the forthcoming accounts.

The Annual General Meeting ('AGM') of the Company will be held on 11 March 2024 at 9.30 am at 1 London Wall Place, London, EC2Y 5AU. Full details are set out in the AGM Notice posted to shareholders and may be downloaded at the following link: http://www.rns-pdf.londonstockexchange.com/rns/2992D_1-2024-2-15.pdf

Due to ongoing work relating to leasehold and building safety reform the Company will delay the release of its year-end audited accounts from early 2024 to during the quarter ending 30 June 2024. This extension has been approved by Companies House and The International Stock Exchange Authority Limited. The Company expects to hold a separate Extraordinary General Meeting in advance of 30 June 2024, at which the Accounts will be presented to shareholders and shareholder resolutions relating to the Accounts will be proposed.

See the Company's website for more information:

groundrentsincomefund.com