Grainger announces joint venture to purchase £110m portfolio

Property firm, Grainger plc has joined forces with Dorrington Plc to purchase a £111m residential portfolio in London.

The portfolio, comprising 598 residential units, including two commercial units in South London, was previously wholly owned by Grainger Plc.

The 50:50 joint venture between to two firms, Walworth Investment Properties Limited, purchased the portfolio for £111m on 10 May.

With headquarters in Newcastle, Grainger Plc are the UK’s largest listed residential owner and manager with over £3.0bn of residential assets under management.

Dorrington plc is a long term investor in residential and commercial property, mainly in London, its investments comprise regulated, assured and assured shorthold tenants and ground rents.

Grainger were advised on the deal by a team of experts from law firm Bond Dickinson,

The joint venture has arranged non-recourse debt facility of £60m, the assets have been sold into the JV at Grainger’s carrying value of £111m.

Taking into account the debt finance and allowing for working capital requirements the immediate impact on Grainger’s net debt will be a reduction of approximately £83m.

Nick Jopling, Executive Director of Property at Grainger, said: “We are pleased to team up with Dorrington whom we know well and with whom we share a similar long term investment view.

“As partners, we plan to build on our strong relationship with the residents of the Walworth Estate.

“This is a unique portfolio, with strong prospects and we look forward to working with Dorrington to deliver a good service and enhance value.

“We’d like to thank the team at Bond Dickinson for their hard work, bringing with them resource and a high level of expertise in the sector, which was a major advantage in the deal.”

The team from Bond Dickinson comprised experts from across its residential, corporate, banking and construction teams.

Nigel Emmerson, Head of Residential Real Estate at Bond Dickinson said: “We are delighted to have completed this joint venture for Grainger with Dorrington.

“Since Grainger took over full ownership of this portfolio in 2011, it has generated a 36% return on its equity investment.

“We hope that this new venture with Dorrington will help the joint venture maximise longer term returns on the portfolio in the future.”

The portfolio was previously part of the Grainger Invest portfolio, originally purchased from the Church Commissioners in 2006 in a joint venture with Genesis Housing Group, Grainger took full ownership of the portfolio in March 2011.