Mitsubishi leads investors' boost to Grainger property fund

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The Independent Online

The residential property investor Grainger has raised £159m for its G:res property fund, which it says is the UK's largest market-rented residential investment fund.

A final investment from the Mitsubishi Corporation of £15m has taken Grainger's equity stake down to £43m.

Chief executive Rupert Dickinson said: "While the capital markets are challenging, for commercial property in particular, we continue to be encouraged by the support and recognition of respected investors about the long-term attractions of Grainger's management ability in the residential sector."

Other investors in the fund include British Airways Pensions Fund, Nomura, Swiss Re andthe Universities Superannuation Scheme.The fund was launched in November 2006 with a seed portfolio of 1,400 properties. Following the acquisition of 700-properties from the Ability group in March, G:res owns 2,100 units, of which 90 percent are located in London and the south-east of England.

Mr Dickinson added: "We are pleased to see the fund perform so well, as we continue to integrate the Ability portfolio acquisition into the fund.

"This will provide a good platform from which to generate long-term performance growth for fund investors together with additional opportunities to deliver value for the shareholders of Grainger through increasing management and performance fees."

The fund's investment value stood at £435m at the end of June, equating to a net asset value of 114 pence a share, up 14 per cent since its launch.

Quinton Hill-Lines, Grainger's managing director of Fund Management, said: "Having come very close to our strategic hold level of 20 per cent we are very happy to draw this capital raising process to a successful close. However, we are currently looking at a number of interesting acquisition opportunities for thefund which may result in a further capital raising process in the latter part of this year or the early part of next."

Grainger, which is the UK's largest listed residential property owner, is expanding its operations into continental Europe and owns more than 4,000 residential units in Germany.