Grainger is taking full control of a property joint venture by acquiring the 75.1% stake it did not already own from APG for £396m (€454.6m).
The UK residential landlord, which seeks to invest more into new private rented sector (PRS) homes, said it has agreed to acquire the entire share capital and shareholder loans in GRIP REIT from the Dutch asset manager.
GRIP’s portfolio comprises 35 PRS assets (1,700 PRS units) with a gross asset value of £696m and a PRS pipeline of £382m.
Following the acquisition, Grainger’s PRS investment pipeline will total £1.37bn.
Grainger said the acquisition will be funded by a £346.7m rights issue. The company will issue 194.7m new shares at 178p each.
Helen Gordon, the chief executive of Grainger, said: “I am pleased to announce today the acceleration of our growth strategy in the UK private rented sector with the proposed acquisition of GRIP REIT, our £696m PRS co-investment vehicle with APG, the expansion of our PRS investment pipeline to £1.37bn, and a strong set of financial results for the year.”
APG entered the UK residential property market in 2013, buying part of a portfolio with Grainger. In 2016, Grainger and the €480bn Dutch pension fund converted GRIP Unit Trust - their UK residential property joint venture - into a real estate investment trust.
“The GRIP portfolio, which we have managed since 2013 and therefore know very well, is an exceptional acquisition. It will provide a step change in our investment in the PRS market and generate increased net rental income growth, which in turn will deliver enhanced shareholder returns,” Gordon said.