Partner Article

Grainger swoops for one firm and gets knocked back by another

Grainger plc, the UK’s largest residential landlord company has snapped up a firm which owns 162 properties in Devon for £15.3m.

The Newcastle firm has acquired PHA Limited which has a property portfolio that largely includes houses developed in the 1950s and 1960s.

Fifty of the units are subject to regulated tenancies, twelve are subject to assured tenancies and the remainder are let on Assured Shorthold Tenancies, together with a vacant property, a commercial tenancy and two development sites.

The portfolio currently generates a total rent roll of more than £876,000 per annum.

Grainger estimates the portfolio value to be £17.2m. Whilst the portfolio has been very well maintained over the years there remain numerous opportunities to enhance income and extract the reversionary value through selective refurbishment and modernisation.

Chief executive Andrew Cunningham, said: “Following our successful rights issue, we have been reviewing various acquisition opportunities that fit with our existing holdings and our ongoing asset management strategy, and that will benefit from the activities and expertise of our residential management team.

“This is a significant portfolio, in the South West of the UK, which we have acquired in an off-market transaction. We have a strong presence in this area, understand the local market well, and therefore believe that this acquisition offers a number of opportunities for us to deploy our property and asset management expertise, creating value over the medium to long term.”

Meanwhile, another potential acquisition Grainger has made a bid for has said it believes it has been undervalued by the company.

Sovereign Reversions said it had carefully considered the offer of 185 pence per share, taken advice from its financial advisers and has concluded that it significantly undervalues the Group’s business and prospects.

A company statement said: “The Board is now seeking to establish a dialogue with Grainger in order to share information with a view to establishing the maximum price that Grainger would offer. The Board is also reviewing other options to maximise value for Sovereign shareholders.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .