North East-based property owner Grainger Plc has made a major investment into the UK regions, ploughing £76m into around 900 residential units.
The firm – the UK’s largest listed residential property owner and manager – has announced it has exchanged contracts for the acquisition of a regional tenanted residential property portfolio for £58m from Sarunas Properties Limited, a company owned by global investment group The Pervaiz Naviede Family Trust.
The latest transaction brings the company’s total investment into residential assets in the UK regions to £76m in recent months.
The portfolio includes 614 residential properties, predominantly tenanted and subject to assured shorthold tenancies, located in Cambridgeshire, Greater Manchester, Lancashire, Cheshire, Derbyshire, Merseyside and Nottinghamshire and Scotland.
The price of the portfolio is the investment value of the properties at the date of acquisition and represents a discount to their £66m vacant possession value.
The properties generates an annual gross rent of £4.5m, and the business has significant opportunities to raise that figure by carrying out a combination of refurbishment, active asset management and capital realisation.
Directors predict it will deliver a double digit total return over the next five years.
This acquisition follows on from the company’s ambition set out at its full year results in November 2014 to invest more heavily into the UK regions outside of London and the South East.
Andrew Cunningham, Chief Executive of Grainger plc, said: “Today’s acquisition and our wider investment activity over the last month support our strategy of increasing investment into the regions where we are seeing attractive investment opportunities, while capitalising on the improving momentum of the UK economy.”
Rudi Falla, spokesperson for the Pervaiz Naviede Family Trust, said: “This residential property portfolio has taken us five years to assemble, is firmly established and fully tenanted, therefore, we feel this is an appropriate time to sell in order for us to explore new opportunities.
“We are delighted to be handing it over to one of the UK’s largest residential property businesses and have every confidence that Grainger will continue to add value to the portfolio.”
The portfolio acquisition is expected to complete in May.