Grainger (GRI), the UK's largest listed residential landlord, is selling its equity release division to Turbo Group, an entity owned by Electra Private Equity and Patron Capital Partners, for £325m. This includes around £150m of debt transferred to the buyer, so Grainger will receive approximately £175m in cash. The deal eliminates Grainger's most expensive debt, and is expected to reduce the overall cost of debt from 4.6 per cent to 4.3 per cent.
Reducing borrowing will cut the group's loan-to-value ratio to below 40 per cent compared with 45.5 per cent at the September 2015 year-end. The sale also marks another step towards focusing on the residential rented sector, and follows the sale of its German joint venture last year. A further £140m of property in Germany is expected to be disposed of by the middle of this year.
