Business
Sale of ?88m Equity Release Portfolio
Sale of ?88m Equity Release Portfolio.
About this update from Grainger Plc
[{"type":"text","content":"\n \nRNS Number : 3413X Grainger PLC 10 January 2014 \n \n\n9th January 2014\n \n \nGrainger plc (the \"Group\", \"Company\")\n \n \nGRAINGER SELLS £88 MILLION EQUITY RELEASE PORTFOLIO AND ENTERS INTO FEE GENERATING MANAGEMENT CONTRACT\n \nGrainger plc (\"Grainger\", the \"Company\" or the \"Group\"), the UK's largest quoted residential property owner and manager, announces that it has exchanged contracts and completed on the sale of its interest in a portfolio of 1,203 properties located across the UK to Clifden Holdings Limited (\"Clifden\"), for £87.6m. The interest in the properties being sold are held within Equity Release Increments Limited (\"ERIL\"), a wholly owned subsidiary of Grainger's Retirement Solutions business, and are all residential units that are owned through home reversion plans, the majority of which were originated between 2004 and 2008. The sale has received the necessary approval of the Change of Control of ERIL from Grainger to Clifden by the Financial Conduct Authority.\n \nThe total group pre-tax profit from the sale after costs amounts to £9.9m.\n \nAs part of the transaction, Grainger will enter into a long term agreement with Clifden to carry out asset and property management of the portfolio, for which it will receive, in addition, a fee income in excess of £0.6m per annum.\n \nAt completion of the deal, 60% of the total consideration, amounting to £52.6m was paid in cash to Grainger, with the remaining 40% payable unconditionally over the subsequent 12 months. The outstanding consideration is subject to interest of 10% per annum.\n \nThe proceeds from the sale will provide additional headroom for future investments.\n \nFollowing this transaction, Grainger's Retirement Solutions business comprises c.3,800 assets with a market value of £345m.\n \nCommenting, Andrew Cunningham, Chief Executive of Grainger, said:\n \n\"This is a significant transaction for Grainger, crystallising substantial value from part of our Retirement Solutions portfolio while retaining long term fee income. The sale, which is aligned to our current strategy, demonstrates the growing appetite among investors for assets in all segments of the residential property sector.\n \n\"The proceeds of the sale will allow the Company to capitalise on attractive...