Partner Article

£42m sale sees Newcastle’s Grainger edge closer to German exit

Property firm Grainger plc has announced that it has signed contracts to sell the majority of its remaining German residential property for c.£42.4m, as the Newcastle-based firm continues its exit strategy from the German market to focus on the UK private rented sector (PRS).

The UK’s largest listed residential landlord, Grainger is selling the portfolios to the listed German residential investment company LEG Immobilien AG.

The firm, which revealed an £850m investment strategy focussing on the UK PRS at the beginning of the year, sold its largest German business asset to Heitman for £94m in February.

Therefore, today’s announcement is in line with Grainger’s new strategy of simplifying its business to focus on investment in the UK private rented sector.

The portfolio comprises c.1,100 residential units located in the Northrhine-Westphalia region. It generated a gross rental income of €4.0m (£3.0m) and a loss before tax of €3.7m (£2.7m) in the last financial year.

Taking account of this transaction which is expected to complete in coming months following regulatory approval by the German Federal Cartel Office, and the previously announced investment and management platform disposals, Grainger will have less than €11m (£8.8m) of remaining assets in Germany, more than half of which is already under offer for sale.

Today’s transaction will generate a loss of c.€3.7m including fees, which will be treated as a non-recurring item.

Helen Gordon, chief executive of Grainger, said: “We are pleased to be concluding our divestment programme in Germany, enabling Grainger to focus its full attention on its stated strategy of investing in the UK private rented sector.”

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