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The UKs largest quoted property owner has acquired a 700-unit portfolio in East London for more than £200 million.

Grainger plc, through its G:Res1 Fund, bought the portfolio from The Ability Group for £205 million. The deal follows Grainger’s £84.4 million cash investment into G:Res1, a residential investment fund. Barclays Bank provided debt.

The acquired portfolio comprises some 600,000 sq ft of properties, including 232 residential properties and 128 commercial units and 84 car parking spaces. More than 90% of the properties are in the London Boroughs of Hackney and Islington and are set to benefit from regeneration work for the 2012 Olympics. 

Grainger’s chief executive Rupert Dickinson said: “The acquisition of this portfolio means that G:Res1 is substantially invested within four months, well ahead of its three year target. 

“We are particularly pleased to have been able to secure this deal off-market on behalf of the Fund’s investors and believe this clearly demonstrates Grainger’s ability to deliver value not only to its shareholders but the investors in the independently managed fund.”.

The deal is G:Res1’s first significant acquisition since it was launched in November 2006 with a portfolio of 1,400 residential properties. The fund has received equity from several investors, such as Nomura Real Estate Capital Management. Grainger – which has a 67% stake in the fund following its latest £84.4 million investment – has now put £133.7 million into G:Res1.

Grainger generated a pre-tax profit of £71.7 million for the year to September 30, 2006, a 75% increase compared with the year before.

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