25th Jun 2007 07:02
Grainger PLC25 June 2007 25 June 2007 Grainger plc ("Grainger") GRAINGER ANNOUNCES THE SALE OF £78M OF UNITS IN G:RES1 FUND TO NEW AND EXISTING THIRD PARTY INVESTORS G:res1 Limited ("the Fund" or "G:res1"), the residential investment fund advisedby Grainger plc, the UK's largest quoted residential property owner, todayannounces its successful second closing. The closing was made through the saleof £78 million of shares held by Grainger. This closing takes the total thirdparty investment in the fund to £144 million. As a result, Grainger has solddown its equity stake in G:res1 to 28% of the Fund's total committed equity.This is in line with its long term strategy of maintaining a stake greater than20%. Since its launch on 22 November 2006 with a £210 million seed portfolio of 1400properties, G:res1 has successfully grown the portfolio by 700 units through theacquisition of the Ability portfolio in March 2007. As a result, G:res1 now hasa combined fund gross asset value of circa £420 million, which generates grossrental income of £21 million.. On launch, Grainger held 100% of the share capital of G:res1 and has sold sharesin the Fund to investors in two closings, through which it has attractedinvestment from a wide range of prestigious UK and overseas institutionalinvestors. Incoming investors at second closing are the UniversitiesSuperannuation Scheme, British Airways Pensions Fund, LGPI (the Finnish statepension fund), APPI (an Aberdeen-managed Fund of Funds) and Flemings Family andPartners. In addition, three of G:res1's existing investors, Swiss Re, NorskHydro and Achmea have increased their equity stakes by a collective total of £15million. Grainger's retained interest in the fund is treated as an investment in anassociate with its share of profits recognised accordingly. The impact onGrainger's accounts will be broadly neutral with the reduced share in theprofits of G:res1 being offset by the decrease in borrowing costs. Proceeds fromthe sale will be used to repay Grainger's group debt. Grainger is both the day-to-day property manager and asset advisor to the Fundand is eligible for fees on a recurring basis and a promoted interestperformance payment at year seven or upon early wind-up of the Fund. Grossrecurring fees on an annualised basis generated by G:res1 are £4.5 million Commenting on the Fund's second closing, Rupert Dickinson, Chief Executive ofGrainger, said: "The continued interest in the Fund from such prestigious institutionalinvestors demonstrates both the Fund's robust business plan and the benefitsavailable through gaining access to a strong and diverse residential portfolio.We are confident that our long-established position in the residential field,combined with our highly-skilled fund, asset and property management teams willcontinue to ensure that the Fund provides a compelling investment opportunity,delivering consistent growth and positive returns to our fund investors andshareholders." Quinton Hill-Lines, Grainger's Managing Director of Fund Management, added: "We are excited to be welcoming such highly regarded UK and overseasinstitutional investors to the Fund, a clear indication that the strategy we putin place at the Fund's launch is working and providing an attractive investmentopportunity. Additionally, as a leading residential property adviser, we havebeen able to capitalise on our ability to deploy our highly experienced teams,which specialise in identifying portfolios of properties where we can unlockconsiderable value." -ENDS- Enquiries: Grainger plc: Andrew Cunningham / Quinton Hill-Lines Tel: +44 (0) 20 7795 4700 Financial Dynamics: Stephanie Highett / Dido Laurimore Tel: +44 (0) 20 7831 3113 Notes to editors: M3 Capital Partners Limited acted and continues to act as adviser to Graingerwith respect to the structuring and placement of the Fund. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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