Disposal of Beetham Tower
DISPOSAL OF BEETHAM TOWER
Ground Rents Income Fund plc ("GRIO" or the "Company") announces that it has sold its wholly-owned subsidiary, which owns the freehold interest in Beetham Tower in Manchester (the "Property"), to a private investor for nominal consideration. The disposal releases GRIO and its subsidiaries from all current litigation and freeholder obligations relating to the Property that was originally acquired in 2012.
In 2014, a building defect was identified and, in January 2019, the High Court passed a judgement requiring the freeholder, a wholly-owned GRIO subsidiary to perform the repair. The repair obligation defaulted to the freeholder following the collapse of the original contractor, Carillion Construction Limited, who would otherwise have likely been legally responsible for funding the repair.
Resolving the complex repair issues and related litigation at the Property has been a strategic priority for the GRIO Board of Directors and Schroders since the latter's appointment as alternative investment fund manager (the "Manager") in May 2019. This has involved regular consultation with the building residents and other stakeholders. Following extensive negotiations, the buyer is expected to deliver a long-term repair solution for the Property.
The disposal has the following financial impact with reference to the unaudited interim results to 31 March 2021, released on 29 July:
· Reversal of the specific £2.9 million provision which reflected an estimate of the cost the asset owning subsidiary would have incurred, were it to have proceeded with the remedial works required to repair the Property, after recovery from third parties; and
· Increase in costs and expenses specifically relating to the Property incurred since 1 April 2021 of approximately £300,000. Schroders has not charged additional fees for work carried out in connection with resolving the Beetham Tower litigation.
The Property has been a very challenging investment for the Company but completion of the disposal is a positive step forward. As set out in the interim results, the GRIO Board of Directors and the Manager remain highly focused on delivering value for shareholders.
For further information:
|
Schroder Real Estate Investment Management Limited Matthew Riley |
020 7658 6000 |
|
Singer Capital Markets (Broker) James Maxwell / Kailey Aliyar |
020 7496 3000 |
|
Appleby Securities (Channel Islands) Limited (Sponsor) Andrew Weaver |
01534 888 777 |
|
FTI Consulting Dido Laurimore / Richard Gotla |
020 3727 1000
|
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