Ground Rents takeover off as Victoria Property steps back

The real estate investment trust will continue to wind-down the portfolio after the cooling of takeover talks with Victoria Property.

Victoria Property has announced it does not intend to make a firm offer for Ground Rents Income (GRIO ), after its five previous non-binding offers were rejected by the portfolio of ground rent investments.

GRIO had given Victoria Property a deadline of 25 February to submit an improved offer for the portfolio of ground rent investments, having previously declined Victoria’s offers arguing they ‘wholly undervalued’ the portfolio.

Victoria Property has since decided to withdraw its interest.

In response, GRIO said it remains committed to implementing a wind-down of the portfolio under Schroders fund manager Chris Leek. Since the end of September 2023, the real estate investment trust (Reit) has completed disposals of £11.6m at or above the independent valuation. The majority of these proceeds were used to repay debt.

In January, GRIO decided to take legal action against the government to safeguard shareholder interests against what it understands to be unlawful provisions in the Leasehold and Freehold Reform Act 2024. These ‘enfranchisement’ provisions make it easier and more affordable for leaseholders to extend leases or purchase freeholds.

GRIO is engaging with the Labour government to advocate for reform that it says can fairly balance the interests of its shareholders and leaseholders.

Shares in the Reit are down 57% over the past three years and trade at a 42% discount to net asset value (NAV). This leaves GRIO’s market cap at £32.5m.