Grainger sells portfolio of homes for £60m

The FTSE 250 company said the move had helped reduce debt below its target level of £1 billion while also retaining an equity interest in the asset and increasing future management fees.

The deal, revealed today in its interim management statement, sees the Tilt portfolio - the portfolio of residential properties being sold - move to the fund, known as GRIP, which Grainger created earlier this year alongside pension fund APG.

The portfolio was originally acquired in 2007 and currently generates a total rent of around £2.4 million a year.

Grainger said it was an opportune time to sell as its asset management initiatives have stabilised and enhanced the rent roll and improved overall performance.

The company added that net debt was estimated at £985 million as of 6 August after the sale, beating its target of reaching a £1 billion net debt level by the end of 2013.

‘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,’ said Andrew Cunningham, chief executive of Grainger.

‘Underlying rental levels also remain robust, with continued strength in demand in the stronger economic regions, and we continue to increase our fee income,’ he added.

Sales for the ten months to 31 July were £258.7 million, compared to £202.1 million in the same period the previous year, while vacant UK residential properties were being sold at 6.7 per cent above last year’s values.