It is encouraging that Grainger will maintain strategic continuity with a CEO designate appointed well in advance of Andrew Cunningham’s planned retirement in February 2016. Helen Gordon, CEO designate, will join Grainger in January 2016. She has experience in residential property and large scale transactions in the market-rented space. Our view remains unchanged: we believe that there is significant upside value to be realised from redeployment of capital from reversionary into market-rented assets. We retain our BUY recommendation and 295p 12m Target Price – using a NNNAV valuation for reversionary assets and a 1.5x P/B for market rented assets – vs a projected 302p FY15e Gross NAV. Grainger is one of our Key Buys for 2015.
