Interim Management Statement

Grainger PLC
12 February 2008

12 February 2008

                                  Grainger plc

                          Interim Management Statement

Grainger plc ("Grainger" or the "Company"), the UK's largest quoted residential
property owner, today presents its interim management statement covering its
activities for the four months to 31 January 2008.

Highlights

  • 207 residential properties sold for gross consideration of £38.8m
  • Values of UK sales achieved 4.5% in excess of September 2007 valuations
  • A total of £116m spent on new property acquisitions and developments
  • Planning permission granted at Newlands Common, West Waterlooville
  • Conditional acquisition of listed German residential property company,
    FranconoRheinMain AG, which will bring Grainger's total property assets in
    Germany to over 6,800 units with a total value of c€500m.

Commenting on the four months results to January, Rupert Dickinson, Chief
Executive of Grainger said:-

"We have been active across all of our business divisions since our year end in
September 2007.  Margins have held up and we are selling properties at above
last September valuations, despite sales volumes being lower because of a
reduced number of vacancies and a slowing of the sales process.  We continue to
recycle our capital and purchase assets for our long term portfolios in the UK
and Germany where we have identified good opportunities and we expect to
continue this over the latter part of the year.

"We are very encouraged that Government has announced a review of the Private
Rented Sector as we believe that an efficient, professionally managed sector is
a vital component of the UK housing market and another method by which
Government can meet its targets for housing provision over the coming years.  We
look forward to active participation in the debate."

Market Review

The continuing impact of the liquidity crisis has slowed down the level of house
price growth that Grainger has experienced in recent times.  Notwithstanding
this, the Halifax All Houses All Buyer Index for the twelve months to the end of
January showed growth of 4.5% and, although the three month movement to that
date showed a fall of 1.0%, the January index itself was unchanged from
December.

Despite this, sale prices on our portfolio have held up and we are particularly
pleased that across our whole UK portfolio we have achieved sales values 4.5% in
excess of September valuations.  Within this there are some regional variations
with London and the South East (where the majority of our portfolio is located)
performing most strongly. However, the overall result further demonstrates the
reality of the strong defensive qualities of our UK residential portfolio:
geographically diverse, low average value and generally in need of refurbishment
when they are marketed for sale.  These assets continue to attract interest from
prospective home-owners and investors.

Core Portfolio

We have sold a total of 153 units for £30.1m since 30 September 2007 and our
estimated trading margin is 49.4%.  The equivalent figures to the end of January
2007 were 217 units sold for £37.6m at a margin of 47.6%. We have also completed
or exchanged on the purchase of £61.0m worth of properties, including the £34.6m
acquisition of the Ranton Estate in Staffordshire in January 2008.

Retirement Solutions

Sales values in this division amounted to £8.7m and, although purchasing
activity was slower than expected in the relatively quiet months of December and
January, we have acquired £18.7m of reversionary assets in the period. We are
pleased to report good performance from our two major recent acquisitions. Sales
realisations from the CHARM portfolio have exceeded expectations and we have
reduced the vacancies on the CAT portfolio from 229 on acquisition to 79.

G:res1

The fund was last valued on 31 December 2007.  At that time it indicated an
increase in net asset value of 8% to £1.08 per share over the year to that date.
Investors in the fund, in which Grainger has retained a 21.6% stake, also
received a dividend of 0.2p per share.

Development Division

Our key achievement during the period under review was obtaining planning
permission for our major residential-led, mixed use 132 hectare development
site, Newlands Common, located near West Waterlooville in Hampshire.  We will
now be able to progress with the infrastructure works with a view to commencing
sales in 2008/09.

Following the period end Grainger, in joint venture with Helical Bar plc, has
been selected as preferred partner by Hammersmith and Fulham Council as the
developer of a major mixed-use site in Hammersmith. Grainger and Helical Bar
will be working with the Council with the aim of signing a formal development
agreement in due course.

As mentioned in our annual report, we have relatively few developments expected
to reach completion in this financial year so the overall financial result for
this division will be below that of last year.

Europe

We continue to be active in the German market where we continue to see good
acquisition opportunities.  In the four months to 31 January we completed or
notarised the acquisition of a further 602 units for €49.6m, and we estimate the
total value of our portfolio to be in the region of €348m.

We have also recently announced our offer for FranconoRheinMain AG for a total
expected consideration of approximately €45m. When complete, our German assets
will stand at approximately €500m, representing in excess of 6,800 units, and
will present us with the opportunity to put financing in place that is more
appropriate to a portfolio of this size.

Debt

At 31 January, group net debt was c. £1.46 billion and our estimated loan to
value ratio was 56.6% (30 September 2007: £1.33 billion and loan to value
53.0%). Our available headroom amounted to £219m. As reported to shareholders in
our year-end results in November, as a result of acquisitions of long term
reversionary assets which are not earnings accretive in the early period of
ownership, our average debt levels over the four month period have been some
£398m higher than last year and this is likely to continue to be the case to the
end of September 2008. As anticipated this will result in profits after interest
costs and fair value adjustments for the full year being lower than in the
preceding year.

Outlook

We are pleased with our progress across all our divisions.  We are continuing to
acquire assets but we are doing so with caution and only acting on the right
opportunities. In the short term market conditions will continue to make trading
and growth from asset valuation increases more challenging. Over the long term
we remain confident that our strategy and performance will continue to deliver
shareholder value.

For further information:
Grainger plc                                             Financial Dynamics
Rupert Dickinson                                         Stephanie Highett

Tel: [phone]                  Dido Laurimore
Andrew Cunningham                                        Jamie Robertson

Tel: [phone]                                Tel: [phone]



Notes to Editors:

Grainger plc is the UK's largest listed residential property owner, trader and
development company.  Listed on the FTSE-250, the Company aims to deliver
shareholder value through combining its core activities in the management and
trading of portfolios of regulated and assured tenancies and in the fields of
residential development, fund management, equity release and asset management.
In addition, Grainger is expanding its operations into continental Europe and
owns a portfolio of properties in Germany, which at 30 September 2007, comprised
more than 4,500 units with a market value in excess of £240 million.


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