Grainger Trust has followed yesterday’s rebuffal of an “unwelcome” takeover approach with an upbeat trading update.
The quoted residential property owner, which is due to report its full year results at the end of November, cited a strengthening of the residential market in London and the South East as the driving force behind strong trading volumes.
The update comes a day after Grainger said a preliminary approach from Regis Group and Merrill Lynch “significantly undervalued” the company.
Following the bid, Grainger has fulfilled analysts’ predictions by opting to review its valuation techniques.
The existing methods put its tenanted residential properties’ vacancy rate at about 73%.
But this figure is regarded as over-cautious by experts and the company expects to see “significant improvement in this aspect of the valuation” at 30 September 2006.
The overall increase in the vacant possession value of the company’s portfolio is expected to be 9% for the year.
Tenanted residential sales are expected to exceed last year’s valuation and come in at approximately £137m for the 12 months to the 30 September.
The total value of acquisitions for the year is anticipated to be around £97m, due to the exchange and completion of £54m of tenanted residential properties during the second half of the year.
Including joint ventures, this figure is expected to increase to £195m, up from last year’s £184m which including £91m acquisitions in City North Group.
The development division is reported to be performing in line with expectations and acquisitive activity has continued in Germany where the total portfolio has been built up to 2,807 units.
References: EGi News 04/10/06
