REG - Ground Rents Inc Fnd - Two Student Ground Rent Disposals

Ground Rents Income FundAnnouncement

20/03/2026 07:00

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RNS Number : 3928X  Ground Rents Income Fund PLC  20 March 2026

20 March 2026

 

Ground Rents Income Fund plc

("GRIO" or the "Company")

 

TWO STUDENT GROUND RENT DISPOSALS

 

Ground Rents Income Fund plc announces that it has sold freehold ground rent
interests in Manchester and Southampton ('the Assets') for a combined price of
£4.58 million.

 

The price represents a 0.6% discount to the independent valuation of £4.68m,
and reflects a net initial yield of 5.3% (valuation as at 30 September 2025).
The Assets are operated by Vita Group ('Vita') as purpose built student
accommodation on behalf of the long leaseholders. The interests are being
acquired by an unrelated third party. The disposals are in line with the
Company's strategy to sell assets where possible with the aim of optimising
returns for shareholders.

 

The Assets were acquired from Vita in 2014 for £4.04 million. The Southampton
asset formed part of a six asset headlease restructure in 2019 which generated
an apportioned receipt of £249,000. The title structure of the Assets is
expected to mitigate aspects of the Government's residential leasehold reform
agenda. Further information in relation to proposed leasehold reform is set
out in the Company's update dated 27 January 2026 (the 'Leasehold Reform
Update').

 

The Assets formed part of the security for the Company's loan from Santander
UK plc ('Santander').  The loan was refinanced on improved terms in December
2025 and requires net proceeds from charged asset disposals to be used to
repay the facility. The outstanding loan has therefore reduced from £8.2
million to £3.9 million. Based on the latest independent portfolio valuation
(as at 30 September 2025), the value of the remaining assets charged to
Santander is £22.0 million. Following repayment, the bank Loan to Value
('LTV') will be approximately 18%, compared with a covenant ratio of 45%.

 

Based on a current SONIA rate of 3.7%, the loan's total interest rate is 6.2%,
with an Interest Cover Ratio ('ICR') of approximately 8.25x, compared with an
ICR covenant ratio of 1.75x.

 

The consolidated group gross LTV is expected to be approximately 7.6%.
Therefore, the Company is considering whether current cash reserves of £5.2
million could be utilised to make further loan repayments, while having regard
to working capital of the Company.

 

The Company expects all covenants to remain in compliance, including on the
basis of the initial high-level assessment of the Government's proposed cap on
residential ground rents described in the Leasehold Reform Update. (Please
note that the assessment within the Leasehold Reform Update is for
illustrative purposes only).

 

Further disposals are progressing. The Company will provide an update on its
independent portfolio valuation (as at 31 March 2026) in due course.  An
update on the Company's strategy will be included in the unaudited half year
results for the six months ended 31 March 2026, expected to be published in
June 2026.

 

This announcement contains inside information for the purposes of
the UK version of the Market Abuse Regulation ('MAR') which forms part
of UK law by virtue of the European Union (Withdrawal) Act 2018; as amended.
Upon publication of this announcement, the inside information is now
considered to be in the public domain for the purposes of MAR.

 

Enquiries:

 

Schroder Real Estate Investment Management Limited

Chris Leek

020 7658 6000

 

Singer Capital Markets (Financial Adviser & Broker)

James Maxwell / Sam Butcher (Investment Banking)

Sam Greatrex (Sales)

020 7496 3000

 

Appleby Securities (Channel Islands) Limited (Sponsor)

Andrew Weaver / Michael Davies

01534 888 777

 

FTI Consulting

Richard Gotla / Oliver Parsons

0203 727 1000

 

JTC (UK) Limited (Company Secretary)

Ruth Wright

+44 207 409 0181

 

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