GRIOs announcement is both sobering and usefully detailed. It sets out the complex and uncertain landscape that the management team is navigating and lays the foundations for a timely and informed investor consultation process around the Wind-Up vote (due by 23 August 2023). This consultation was signalled in the funds interim result to 31 March (published 30 June). In essence, investors are being asked if they wish to delay the wind up process so that the manager can address the issues/requirements of the Building Safety Act 2022 and improve liquidity ahead of a future vote. Our read of the detailed announcement highlights a reasonable degree of uncertainty around valuation. In addition to the uncertainty regarding rectification costs, market liquidity is low and as a result transactional evidence is limited. GRIO currently trades a c48% discount to proforma NAV (92.5pps). In our opinion, GRIOs discount reflects the uncertainty that the management team is working through.
