Moorfield buys into JV with Grainger

Residential property firm Grainger said its recently acquired Sovereign Reversions subsidiary has formed a joint venture with MREF II Equity Release Limited, a wholly owned subsidiary of Moorfield Real Estate Fund II.

Moorfield is paying Grainger £17.5m for its 50% stake in the joint venture, which is half the price Grainger paid for Sovereign Reversions. In addition, Moorfield will contribute an additional sum to Grainger Equity Release Limited (GERL) to cover 50% of the associated acquisition and integration costs.

The joint venture will be managed by a board with GERL and Moorfield having equal board control. GERL will manage the assets on behalf of the joint venture, for which it will receive an annual management fee based on the prevailing gross asset value, which will lead to the transaction being earnings enhancing for Grainger. The transaction is expected to be net asset value neutral for Grainger.

The Sovereign Reversions business, which specialises in equity release investment, advice, plan provision and plan administration, will continue to operate as normal throughout the integration process following the acquisition and the creation of the joint venture.

Both Grainger and Moorfield are firmly committed to the equity release sector and will look into the possibility of acquiring further assets in the future.

"The creation of this joint venture with Moorfield is consistent with our long-established strategy of co-investing alongside partners across a range of residential sectors and of utilising third party capital to develop and grow our business," said Andrew Cunningham, chief executive of Grainger.