Grainger PLC : Sale of £88m Equity Release Portfolio

9th January 2014

Grainger plc (the "Group", "Company")

GRAINGER SELLS £88 MILLION EQUITY RELEASE PORTFOLIO AND ENTERS INTO FEE GENERATING MANAGEMENT CONTRACT

Grainger plc ("Grainger", the "Company" or the "Group"), the UK's largest quoted residential property owner and manager, announces that it has exchanged contracts and completed on the sale of its interest in a portfolio of 1,203 properties located across the UK to Clifden Holdings Limited ("Clifden"), for £87.6m. The interest in the properties being sold are held within Equity Release Increments Limited ("ERIL"), a wholly owned subsidiary of Grainger's Retirement Solutions business, and are all residential units that are owned through home reversion plans, the majority of which were originated between 2004 and 2008. The sale has received the necessary approval of the Change of Control of ERIL from Grainger to Clifden by the Financial Conduct Authority.

The total group pre-tax profit from the sale after costs amounts to £9.9m.

As part of the transaction, Grainger will enter into a long term agreement with Clifden to carry out asset and property management of the portfolio, for which it will receive, in addition, a fee income in excess of £0.6m per annum.

At completion of the deal, 60% of the total consideration, amounting to £52.6m was paid in cash to Grainger, with the remaining 40% payable unconditionally over the subsequent 12 months. The outstanding consideration is subject to interest of 10% per annum.

The proceeds from the sale will provide additional headroom for future investments.

Following this transaction, Grainger's Retirement Solutions business comprises c.3,800 assets with a market value of £345m.

Commenting, Andrew Cunningham, Chief Executive of Grainger, said:

"This is a significant transaction for Grainger, crystallising substantial value from part of our Retirement Solutions portfolio while retaining long term fee income. The sale, which is aligned to our current strategy, demonstrates the growing appetite among investors for assets in all segments of the residential property sector.

"The proceeds of the sale will allow the Company to capitalise on attractive, value accretive investment opportunities that it identifies going forward. The residential market, supported by recent Government initiatives, is currently showing strong dynamics, which we believe offer the potential for specialists, such as Grainger, to generate excellent returns on behalf of our shareholders and partners."

Grainger was advised by Greenhill & Co. International LLP.

For further information:

Grainger plc

Peter Couch

Tel: +44 (0) 20 7795 4700

FTI Consulting

Stephanie Highett/ Dido Laurimore/ Will Henderson/ Nick Taylor

Tel: +44 (0) 20 7831 3113

Grainger plc - company background information

Grainger plc is the UK's largest listed residential property owner and manager, with c £2.8bn of residential assets under management across the UK and Germany. Grainger generates income through:

·      Salesof properties when they achieve optimum valuations

·      Rentfrom its portfolio of tenanted properties

·      Feesfor the management of residential properties and the provision of its expert services to select third party clients.

Additionally, Grainger is a leading provider of equity release products through its award-winning subsidiary brand, Bridgewater Equity Release.

Grainger was established in 1912 in Newcastle upon Tyne, where it remains headquartered. Grainger is a constituent of the FTSE 250 on the London Stock Exchange and the FTSE4Good index. Grainger was awarded the UK's Residential Asset Manager of the Year at the RESI Awards in 2012 and 2013.