Grainger is exiting the German residential sector following pressure from activist shareholder Crystal Amber.
The UK property company said the move to sell its German assets was part of an “ongoing wider review of all aspects of its business”. The £311m (€435m) portfolio of 5,599 assets is considered “non-core”, it said.
”This will enable the group to accelerate its strategic and financial focus on its UK residential activities to enhance shareholder value whilst taking advantage of the currently strong market for residential property in Germany,” Grainger said.
Investment bank Lazard has been appointed to advise on the disposal. Grainger owns 2,848 assets worth £140m, and a stake in 2,751 properties in a joint venture with Heitman worth £171m.
In its 2015 half year report, Grainger said the value of the German portfolio had “remained broadly flat”, with a reduction of £100,000 after the impact of increases to real estate transfer tax in two German states, which had a £700,000 adverse impact.
Grainger has previously teamed up with Dutch asset manager APG to invest in a London build-to-rent scheme. The pair’s GRIP Unit Trust joint venture is forward purchasing a 90,000sqft private rented sector (PRS) scheme from Bouygues Development for £33.25m.
APG entered the UK residential property market in 2013, buying part of a £350m portfolio with Grainger. The Dutch institution invested £158m in GRIP to buy part of G:res1, one of Grainger’s property funds.
The firm also said that Helen Gordon will join the firm later this year and replace Andrew Cunningham, who steps down next February, as chief executive. AEW Europe chief executive Rob Wilkinson has joined the firm’s board.
Grainger recently refinanced a £580m syndicated bank facility, reducing its cost and extending its maturity.