Grosvenor Announces 2005 Results

Grosvenor, the privately owned international investment, development and fund management group, has published its 2005 results. Total return was 15.1%, up from 13.8% in 2004. Total assets under management rose to $15.6 billion compared to $13.2 billion in 2004. Grosvenor’s wholly owned assets at the end of 2005 were $8.1 billion with $7.6 billion of assets managed on behalf of funds and joint venture partners.

SAN FRANCISCO, CA (PRWEB) April 28, 2006 -- Grosvenor, the privately owned international investment, development and fund management group, has published its 2005 results.

Total return was 15.1%, up from 13.8% in 2004. Total assets under management rose to $15.6 billion compared to $13.2 billion in 2004. Grosvenor’s wholly owned assets at the end of 2005 were $8.1 billion with $7.6 billion of assets managed on behalf of funds and joint venture partners.

In view of the growing importance of international relationships to its business, Grosvenor has chosen to adopt International Financial Reporting Standards (IFRS). Under this convention, profit before tax rose to $632.0 million ($587.3 million in 2004) – this included the result of the annual property revaluation.

The Group Chief Executive Jeremy Newsum said that growing recurring income will be the primary determinant of Grosvenor’s performance in the longer term. In 2004, Grosvenor commented that revenue profit had fallen as a result of investment in overheads – the benefit of that investment was already being seen in 2005 as Revenue Profit rose from $74.7 million to $80.0 million.

Both the Chairman, The Duke of Westminster, and Jeremy Newsum highlighted the strong demand for investment property which had moved towards “unsustainable territory.” However, Grosvenor sees no evidence that an abrupt change is likely.

Group Finance Director Jonathan Hagger said, in his last report before he steps down from the Board in June, “This has been the 13th year of continuous growth in the current UK property cycle with increasingly similar cycles elsewhere in the world. During that period, the group’s net asset value (NAV) has grown from $0.86 billion to $3.8 billion. I was appointed during the difficult years of 1991 to 1993 and these now seem a distant memory.”

Emphasizing Grosvenor’s commitment to complex urban mixed use development and long term management, this year’s review section includes a series of articles about world cities based upon the first ‘World Cities Forum’ organized in June 2005 by the Urban Land Institute, of which Grosvenor is an active member.

The Grosvenor report also outlines the highlights for each operating business:

In Britain and Ireland the size of the development program reached 11.9 million square feet; considerable progress was made on site at the Paradise Project in Liverpool and in letting empty office development space; outline planning consent was granted for an eight acre predominantly residential development for Fountain North in Edinburgh; and Grosvenor was selected as developer for Crawley town centre.

In the Americas, over US $135 million of property was acquired on behalf of Grosvenor and its fund management business; over US $110 million of property was sold; and the development program grew to 17.5% of the total portfolio.

In Continental Europe, Grosvenor strategic investment in international shopping centre specialist Sonae Sierra was increased by 17% to 50% (acquisition cost $332.9 million, completion in February 2006) and Grosvenor purchased over $197.1 million of property on behalf of the Grosvenor Retail European Fund (GREP) in eight transactions primarily in the retail warehousing and high street sectors.

In the Australia Asia Pacific region, assets under management grew to $928.8 million. Portfolio management reduced the exposure to offices and increased commitment to the residential sector, especially in Japan. A number of opportunities are being considered in Shanghai.

In the first full year of operation for Grosvenor’s Fund Management business, funds under management increased to $3.4 billion, three new funds were launched, and the life of three existing funds were extended. In 2006, following negotiations begun in 2005, Grosvenor acquired US property investment management company Legg Mason Real Estate Services (LMRES, now named Grosvenor Investment Management US Inc.). Based in Philadelphia, GIM has a team of 31 people and manages US$1.7 billion on behalf of 15 clients.

The Annual Report and Accounts 2005 is available online at www.grosvenor.com

Grosvenor
Grosvenor is a privately owned international property group, representing the interests of the Grosvenor family headed by the Duke of Westminster. The Group undertakes real estate development and investment on its own behalf and on behalf of partners and investors through its regional operating companies and fund management business in the Americas, Britain and Ireland, Continental Europe and Australia Asia Pacific. It operates from 12 offices and has interests in 17 countries including a 50% shareholding in international shopping centre specialists Sonae Sierra. Grosvenor manages or has interests in approximately $15.5 billion of real estate.

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