Grainger farms out German portfolio

published 9 November 2012

Grainger, the UK's largest listed residential owner and manager, said it had signed up for a joint venture, to which it will hand around half of its German assets.

The company has done a deal with global real estate investment firm Heitman, creating a company that will invest in around 3,000 unit German rented residential portfolio currently wholly owned by Grainger.

The joint venture will be 75:25 owned by Heitman and Grainger respectively and has a long-term strategy aimed at maximising returns through income growth and active asset management.

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"The transaction will allow Grainger to leverage its management platform, acting as the JV's expert partner in German residential property investment," the firm said.

"Grainger will receive fee income for its services to the joint venture and also retain a strategic stake in the portfolio."

The portfolio of German residential assets represents €232m of Grainger's total €474m German portfolio as at 31st March.

It comprises 2,985 residential units across six regions in Germany and produces an approximate annualised profit of €5.2m, including revaluation gains, Grainger said.

The firm added that the deal would give rise to a one-off post tax charge currently estimated at £5.2m (€6.5m) including costs.

This will be taken into account in the income statement for the year ended 30th September 2012 as a non-recurring item.