Grainger launches new fund

Grainger Trust PLC
22 November 2006

22 November 2006



                        Grainger Trust plc ('Grainger')



         Grainger launches £210 million market rented residential fund





Grainger Trust plc, the UK's largest quoted residential property owner,
announces today the successful first closing of G:res1 Limited ('the Fund' or '
G:res1'), a market rented residential fund comprising circa 1,400 units located
throughout the UK.



G:res1 is an independent  private Jersey exempt company that invests through
subsidiaries in the Grainger Residential Property Unit Trust ('GRUT'). Grainger
previously held 100% of the share capital of G:res1 and has sold shares in G:
res1 to new investors. GRUT owns all the property assets of the Fund, which were
independently valued at 30 September 2006 at £210 million.



The new investors comprise four 'blue chip' Continental European financial
institutions: Swiss Re, Storebrand Eiendom, Achmea Vastgoed and Norsk Hydros
Pensjonskasse who have committed to date £56 million of equity in aggregate.
60% of the equity will be drawn at first closing and 40% will remain committed
to the Fund for future acquisitions. In addition, the Fund has raised £125
million of non-recourse debt from Barclays Capital.  The amount returned to
Grainger at first closing is £156.6 million (being £123 million of debt, net of
costs, plus £33.6 million of draw off equity).



A second closing of the Fund is expected to take place in the first quarter of
2007 utilising the balance of the committed equity raised at first closing as
well as equity from new incoming investors. Grainger is currently in discussions
with other leading institutions who are currently conducting due diligence with
a view to investing in the Fund at the second closing. In the long-term,
Grainger intends to retain a 20% stake in G:res1.



The 80% portion of the gross assets expected to be sold was shown as assets held
for sale in the half year accounts and the same treatment and disclosure will be
adopted at the full year. The total net assets of the fund currently stand at
£88.9 million of which £33.6 million has been sold at first closing. The results
for this group of assets for the ten months to 30 September 2006 will be shown
in the notes to the full year accounts as profits on a disposal group. The full
year impact on gross rents to Grainger will be a reduction of £10.5m, with an
associated impact on property expenses and revaluation gains on investment
properties. Going forward Grainger's retained interest in the fund will be
treated as an investment in an associate and its share of profits recognised
accordingly.



Grainger will be entitled to both property management and asset advisory fees on
a recurring basis and a promoted interest performance payment at year seven or
upon early wind-up of the Fund.



Commenting on the Fund launch, Rupert Dickinson, Chief Executive of Grainger,
said:



'The positive response from leading European institutional investors is a strong
endorsement of Grainger and the UK residential sector.  The successful launch of
G:res1 reflects Grainger's reputation for creating value in the residential
sector but also its ability to structure such independent vehicles. This is a
significant step towards achieving our co-investment and fund management
aspirations and we see great potential for this business model to be applied to
other areas of our business, most obviously our European portfolio.'



Commenting on G:res1, Quinton Hill-Lines, Grainger's Director of Corporate
Development, said:



'The fund has a focussed, value-added strategy which will allow investors to
benefit from Grainger's nationwide property management and asset advisory
expertise together with its ability to efficiently capitalise vehicles such as
G:res1. The intention of the fund is to grow through well selected acquisitions,
generating value for both the fund investors and our shareholders through our
retained stake and performance incentive.'



                                     -ENDS-



Enquiries:



Grainger Trust:
Andrew Cunningham / Quinton Hill-Lines                Tel: [phone]



Financial Dynamics:
Stephanie Highett / Dido Laurimore                    Tel: [phone]







Notes to editors:



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


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