Grainger buys up homes in London

Sep 18 2007 by Andrew Mernin, The Journal

RESIDENTIAL landlord Grainger has bought 309 housing units in London which will add over £60m to the value of the company’s property portfolio.

The Tyneside plc paid £47.9m for London-based The Tilt Estate Company which has a property portfolio worth £62.5m.

The properties, acquired from Wainford Holdings, are located in the East Dulwich area of the capital and have a potential annual rent roll of over £2.4m.

Grainger chief executive Rupert Dickinson said: “This is an excellent opportunity to buy a substantial portfolio comprising a large number of quality assets that offer an excellent strategic fit with our existing holdings.

“We’re particularly pleased to acquire these substantial Victorian properties in an area of London that has such potential for future growth.

“We look forward to using our property and asset management expertise to further enhance the value of the portfolio.” This year the company’s property portfolio is currently worth around £2.5bn compared £1.6bn at the end of 2006.

Group finance director Andrew Cunningham said the acquisition was made in the interest of long-term growth.

The company also said it expects to make further acquisitions before the end of the year.

The majority of the London properties are situated around a private garden square and most are subject to shorthold tenancies.

Grainger, which generates the bulk of its revenue from its regulated tenancy business, has made a number of acquisitions this year in its bid to strengthen its position as the UK’s largest quoted residential landlord.

In March the firm snapped up a £205m commercial and residential building portfolio in London. The company bought the 700-property package from property-to-yachts tycoon Andreas Panayiotou for its G:res property fund launched last November.

In June this year the group announced plans to launch a £250m European residential property fund by the end of the year following the launch of the UK-focused G:res fund.

In the same month the company sold a £78m stake in its fund management business to a range of institutional investors.

It marked the firm’s second share sale since it launched G:res, having reduced its stake in the fund’s equity from 67% to 28%.

In August the company completed a £159m fundraising exercise on behalf of G:res.

This week the business unveiled plans for a major new housing development on the site of Gateshead College campus.

The project is being billed as “an environmentally friendly mix of family homes and apartments”.