The UK’s biggest listed landlord, Grainger, swelled its portfolio of homes to rent in London and the South-East on Wednesday with a £396 million deal.
Grainger is buying out its joint venture partner, European pension fund manger APG, to take full ownership of their GRIP Reit partnership, which has 1700 homes.
Grainger is paying with a £347 million cash-call on shareholders.
The portfolio, which should generate £32.5 million in rent a year, grows the value of Grainger’s private rented pipeline to £1.37 billion, well ahead of its original target of £850 million by 2020.
Chief executive Helen Gordon has targeted growth as the number of households in the sector is set to jump from 4.7 million to 7.2 million by 2025.
Grainger has managed the GRIP Reit portfolio since 2013 while holding a 24.9% stake.
Gordon said: “I’ve been disappointed and frustrated that we have been doing the heavy lifting to build a brilliant portfolio but we only own 25% of it.” Grainger is focused on London and the surrounding areas in particular due to high property prices and its economic resilience.
Peel Hunt’s James Carswell said: “The deal has clear strategic merits and, whilst not always popular, we believe the benefits more than offset the discounted rights issue.”
