Grainger plc, the UK's largest quoted residential property owner, has announced that investors in the G:res1 Fund have voted, under the articles of the Fund, to extend its maturity date by two years until October 2013. Following that date there will be a further two-year liquidation period to 2015 to allow for the orderly disposal of Fund's assets in order to generate maximum returns for investors.
The extension received strong support from investors in the Fund, with circa 90% of votes being cast in favor of the extension.
Launched in November 2006, Grainger both advises and is the largest investor in the Fund, holding a 22% stake. G:res is a close-ended fund. It was established for a period of five years (to 2011), with 2x1 year extension options (2013), and a liquidation period which now brings the Fund's life out to 2015.
The Fund currently has 12 investors. As at the end of March 2011 it owned 2,056 units with a Gross Asset Value of £375 million excluding cash, Vacant Possession Value of £415 million and a Net Asset Value of £151 million. Around 93% of the assets in value terms are located in London and the South East. The extension will allow the fund manager to extract maximum value from the assets and crystallize as much vacant possession value from the portfolio as possible.
Michael Lamyman, Fund Manager, commented: "The very high level of support from G:res investors highlights their confidence in our team's ability to grow the value of their investments in the Fund. It has an exceptional portfolio of residential real estate, largely located in the strongly performing London and South East area, and this extension to the life of the Fund allows us up to four years to continue our asset management activities and sufficient time achieve maximum value on behalf of our investors."
Andrew Cunningham, Chief Executive of Grainger, commented: "Following the appointment by Lloyds Banking Group and the subsequent creation of Grainger Residential Asset Management Platform (RAMP) earlier this year, the extension of the G:res1 Fund is another strong endorsement of the Company's property and asset management team.
"The management fees the Fund generates for Grainger provide diversified income for the company, which we hope to build further to take full advantage of our deep in-house residential expertise and experience. The liquidation process is a natural event for a closed-ended fund and we will continue to look to replace decreasing fees from G:res through business initiatives such as RAMP and within the private rented sector."