Acquisition by G:res1 Ltd

Grainger PLC
14 March 2007


14 March 2007

                                  Grainger plc

           GRAINGER INVESTS AN ADDITIONAL £84.4 MILLION IN G:RES1 AND
        G:RES1 ACQUIRES 700-UNIT EAST LONDON PORTFOLIO FOR £205 MILLION


G:res1 Limited (the "Fund" or "G:res1"), the residential investment fund advised
by Grainger ("Grainger" or the "Company"), announces today that it has exchanged
contracts to acquire a 700-unit market let portfolio from The Ability Group for
£205 million.


At the same time, G:res1 is also pleased to announce that it is continuing to
secure additional equity from leading organisations.  Nomura Real Estate Capital
Management Co. Ltd has committed £10 million of equity to the Fund, bringing the
total investment by institutions in the Fund to £66 million in aggregate.  On
completion of the Ability portfolio transaction, it is anticipated that the fund
will have total equity of approximately £199.7 million.


Grainger's current investment in the Fund is £49.3 million representing 55.5% of
G:res1. As part of this transaction, Grainger will subscribe for shares in G:
res1 for £84.4 million in cash and as a result Grainger's holding in the Fund
will increase to 67%.  The increase in Grainger's holding will bring the Group's
total investment in G:res1 to £133.7 million.


By making the additional investment in the fund, Grainger expects to benefit
from the capital growth in its stake, pro rata distributions on a semi annual
basis, recurring management fees and a potential promote based on the
performance of the fund payable at the end of its life. This investment is
anticipated to be earnings enhancing for Grainger.


The 55,777 sqm (600,162 sq ft) portfolio acquired from The Ability Group
comprises predominantly newly built or refurbished properties and includes 232
residential, 256 live/work and 128 commercial units and 84 parking spaces.  The
average value of the space is £341 per square foot.


Over 90% of the properties are located to the north of the City of London in the
Boroughs of Hackney and Islington, locations set to benefit from infrastructure
and improvement works to prepare East London for the 2012 Olympic Games.  Around
half of these properties are located adjacent to new train stations that will be
created for the East London line.


The portfolio has been built up over the last 10 years by Andreas Panayiotou
through development and conversion specifically to create a high quality
portfolio for rent. The quality of design and attention to detail has resulted
in good sized, well proportioned units created to appeal to the tenant base of
young professionals working in central London.


The Fund secured an option agreement to acquire the portfolio through exclusive
negotiations with the Ability Group, who were advised by Allsop.  This
acquisition underlines the Fund's strategy of targeting acquisitions where value
can be added through the application of Grainger's expert and innovative
management skills. It also demonstrates Grainger's ability to source quality
assets through its extensive network of contacts.


This announcement follows the Fund's launch on 22 November 2006 with a seed
portfolio of approximately 1,400 residential properties, which were
independently valued on 30 September 2006 at £210 million.  On completion of the
transaction in March, the Fund will hold investment assets comprising 2,172
individual units in 56 blocks/clusters of property valued at circa £412 million
and with a gross annual rent of approximately £21 million. At the end of March,
90% of the Fund's total portfolio will be located in London and the South East.


The Fund will, at completion, be capitalised with, in aggregate, £230 million of
debt provided by Barclays Capital.


Commenting, Rupert Dickinson, Chief Executive of Grainger, 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."


Quinton Hill-Lines, Director of Corporate Development for Grainger added:


"We are delighted to welcome Nomura as a co- investor in G:res1. Following this
transaction G:res1 is now resuming the capital raising process and has widened
its scope to include selected UK institutions and are encouraged by the ongoing
positive response."


                                     -ENDS-


For further information:


Grainger plc:

Rupert Dickinson/Quinton Hill-Lines           Tel: [phone]



Financial Dynamics:

Stephanie Highett/Dido Laurimore/            Tel: [phone]

Jamie Robertson


Notes to editors:


Gres:1 is an independently managed fund with a focussed value-add strategy
providing investor returns through acquiring and managing a diversified
portfolio of residential property in the UK for both rental and capital growth.
This will allow investors to benefit from Grainger's nationwide asset and
property management expertise. The fund is geared to approximately 60% loan to
value.


Grainger plc is the UK's largest quoted property owner in the UK.  The
investment in the fund is the latest in a series of significant transactions
made by the Group since it announced its results to 30 September 2006 in
November 2006.  In January it declared its £71.6 million offer for The Capital
Appreciation Trust (Isle of Man) plc unconditional and in February it announced
the £134.5 million acquisition of a financial interest in a portfolio of equity
mortgages from the Church Commissioners.  These two transactions, together with
its further investment in G:res1 represents total major investments of £290.5
million in the current financial year.


M3 Capital Partners Limited acted and continues to act as adviser to Grainger
with respect to the structuring and placement of the Fund.


                      This information is provided by RNS
            The company news service from the London Stock Exchange