Grainger, Heitman exit German resi JV for €136m

UK listed residential landlord Grainger and its partner Heitman said on Thursday that they have agreed to sell their German joint venture to a large German investor for a total of €136 mln.

The transaction represents 'a strong return' on the capital invested, Grainger said, and is a further step towards the group’s objective of simplifying its business model, enabling it to focus its resources on growing its UK Private Rented Sector business.

The portfolio includes around 2,500 residential properties, located throughout Germany, primarily in the western regions.

Grainger, which recently announced the appointment of Helen Gordon as its new CEO, will receive a total gross consideration of €48 mln for its 25% interest in the JV with the sale expected to generate a pre-tax profit compared to the 30 September 2015 investment value of €16 mln.

Grainger’s internal rate of return on its investment in the German JV over the period since its establishment in late 2012 is 42%. Closing of the deal is expected by 31 December 2015.

'Having taken advantage of the strong investor appetite for German residential assets, this transaction is evidence of further progress in our objective to simplify the business, enabling Grainger to focus resources on its core competencies and recycle capital into growing our UK private rented sector portfolio,' said CEO Andrew Cunningham.