LONDON (dpa-AFX) - Grainger plc (GRI.L), a residential property owner and manager, announced Friday that it has exchanged contracts with Heitman, a real estate investment manager, to sell its equity interest in the FRM German residential rented portfolio and in its German business platform for gross consideration of 124 million euros or 94 million pounds.
This transaction follows the successful sale of Grainger's German JV with Heitman at the end of last year which generated a pre-tax profit of 16 million euros.
The company said the deal enables it to release capital to support its UK private rented sector growth.
A 3.9 million euros loss on sale is anticipated after transaction and exit costs which will be shown as a non-recurring item.
The FRM Portfolio will be acquired by Heitman's newly launched close-ended fund, Heitman European Residential Investment Partners, for 55 million euros of cash, with the buyer assuming debt of about 69 million euros
Grainger Deutschland will be acquired by Heitman for a nominal sum, which will mitigate against potential risks and costs for Grainger as it delivers on its strategy of exiting its German operations.
Completion is expected by 29 February 2016, subject only to approval by German Federal Cartel Office.
This transaction, along with the sale of Grainger's Equity Release division, will reduce Grainger's overheads by c.10% post-completion.
The sale of Grainger's remaining German assets, 1,137 residential units, is underway.
Copyright RTT News/dpa-AFX