Grainger drive down debt

Newcastle-based property outfit Grainger has reduced its debt during the ten months to August.

The firm’s net debt was reduced to approximately £985m, partly through the sale of the company’s Tilt portfolio to GRIP, the Grainger-managed private rented residential fund.

Grainger say the strength of the rented housing market continues to improve alongside house prices, and expect to see this reflected in their results across coming months.

Andrew Cunningham, chief executive of Grainger, said: “We have had an excellent four months since we reported our half year and achieved a number of significant strategic objectives, including reaching our target to reduce our debt to below £1bn. This has been supported by an increasingly positive sentiment towards the UK housing market and the wider economy.

“Sales remain strong, and, with increasing optimism in the housing market in the UK, we expect to see the benefit of this reflected in sales prices in the coming months. Underlying rental levels also remain robust, with continued strength in demand in the stronger economic regions, and we continue to increase our fee income.

“The actions we have taken over recent years - changing the geographical weighting of our assets, reducing financial gearing, and creating partnerships with high quality partners - places Grainger in a strong position to capitalise upon the opportunities arising from a strengthening market.”

Law firm Bond Dickinson advised Grainger on the sale of the Tilt portfolio to GRIP, which was created earlier this year by Grainger and APG, Europe’s largest pension fund asset manager.

Nigel Emmerson, head of Residential Real Estate at Bond Dickinson said: “We are pleased to have advised long-standing client Grainger on the sale of the Tilt portfolio. This is one of many significant transactions we’ve helped them to achieve and we hope the sale will allow them to reap rewards through additional fee revenue and reduced gearing.”

The portfolio was originally purchased via a corporate acquisition in 2007. Grainger’s net cash inflow from the transaction is £54.5 million and the sale was completed on August 6.

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