Duke of Westminster's property holding slumps £594m
Grosvenor moves into emerging markets
Even the Duke of Westminster is being hurt by the recession. Grosvenor, his property portfolio, reported today that it made a £593.9m (€ 669.3) pre-tax loss in 2008, wiping out a profit of £524m in 2007. To weather the storm the firm intends to expand in Asia, according to its chief executive.
The Duke, who owns all the best bits of the Monopoly board including most of Mayfair from Park Lane to New Bond Street, may not be too concerned as assets were down just 7.4% to £2.8bn.
By comparison, the decline in capital values of UK commercial property over 2008 was on average 26.3%, according to Investment Property Databank figures, which measures £130bn of commercial property in the UK.
Although Grosvenor produced a relatively robust -4.1% return on its properties last year compared with 14.4% in 2007, it said falling property values were the chief cause of the change in the company’s fortunes compared with the previous year, when net assets stood at £3.1bn.
The loss also includes a £121m trading loss at Liverpool One, the flagship 2.4m sq ft retail scheme that opened last year. The business has been beset with problems since the off, with writedowns of £49m last year and £140m the year before.
Mark Preston, group chief executive of Grosvenor, said: “This is a challenging time for the property industry and inevitably Grosvenor has been affected. But the impact has been cushioned by our well-diversified portfolio, low gearing, and steps taken since 2007 to curb acquisitions and reduce our development exposure.”
Total assets under management, including those directly owned and those managed on behalf of other investors, fell by only 2.3% from £12.9bn to £12.6bn as favourable currency movements helped to offset the impact of value falls.
Preston said in a press release on the company's website: “Looking beyond the downturn, our significant financial capacity puts us in a good position to take advantage of the excellent buying opportunities which will arise as the property market recovers.”
He added: “Asia is a particular focus for long-term growth and we will continue to reinvest in our core London portfolio. We also see excellent prospects for expanding our property fund management business.”
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