Grainger plc, the UK's largest quoted residential property company, has announced that it has acquired Genesis Housing Group's 50% share in Grainger GenInvest Partnerships along with associated subordinated loan notes for a total consideration of £15 million (approx. 17 million), financed out of existing company resources.
The transaction will make Grainger the sole owner of the portfolio. On completion of the transaction, the Grainger GenInvest Partnerships secured new debt facilities of £120 million from HSBC and Santander which enabled existing lenders to exit.
Grainger GenInvest was created in June 2005 between Grainger and Genesis, each owning 50% of the joint venture, and now consists of eight high quality residential blocks in central London, consisting of 1,630 units of which 470 are regulated tenancies and 301 are assured tenancies. The portfolio is consistent with Grainger's focus on high quality reversionary assets in areas offering prospects of capital growth. The assets also currently generate a gross rent roll of approximately £12 million. The current market value of the underlying assets is approximately £285 million.
This significant acquisition helps deliver Grainger's strategic objective to acquire portfolios of residential assets delivering good long-term returns. Furthermore, the sourcing of new debt specific to the transaction from banks who have not previously lent to the group provides Grainger with a further opportunity to diversify its sources and type of company financing.
Commenting on the transaction, Andrew Cunningham, Grainger's Chief Executive said: "This is a fantastic, high quality portfolio, and a rare opportunity to acquire over 1,500 units the majority of which are within four miles of Westminster. It is a natural and positive step for Grainger to acquire the remaining 50% of this joint venture, which Grainger is familiar with and firmly committed to. It will allow us to ensure that residents continue to receive the same high level of service and commitment that they have come to expect.
"This transaction is consistent with our strategy to acquire high quality portfolios of residential assets which deliver good long-term returns. The fact that we already know the portfolio in-depth made this even more appealing."
Source: FD
