Grosvenor Reinvests for the Future

Share Article

2010 RESULTS: • Total return 10.9% versus negative 2.8% • Revenue profit £64.2m versus £62.2m profit • Pretax profit £394.8m versus £235.8m loss

We have ambitious plans for the future and during 2010 we laid the foundations for growth over the coming decade. After two years of mildly negative returns, 2010 saw them move in line with the historic long term average.

Grosvenor, the privately-owned international property group, reported improved results including a return to profit (before tax) of £394.8m in 2010, following a loss of £235.8m the previous year. Total return was 10.9% compared with negative 2.8% the previous year.

During the year Grosvenor’s operating companies began stepping up reinvestment again, after four years of declining development exposure, using the financial capacity built up over the past two years. The Group’s managed development pipeline of opportunities at year end was around £2.5bn of which £1.1bn was committed; our fund management business sees new opportunities for funds in each of our geographical markets.

Mark Preston, Group Chief Executive, said:

“We have ambitious plans for the future and during 2010 we laid the foundations for growth over the coming decade. After two years of mildly negative returns, 2010 saw them move in line with the historic long term average.

“We remain committed to expansion in Asia, especially China, and to reinvesting in our core business in London. Expanding our fund management business, now under new leadership, is also a priority.”

“We still see threats to a sustained recovery, but Grosvenor’s diversified business and financial prudence will stand us in good stead.”

Grosvenor benefited particularly from a good performance from Grosvenor Britain & Ireland and improved returns from Grosvenor Asia Pacific and Grosvenor Fund Management.

Grosvenor focuses on revenue profit as its best measure of underlying performance. It includes rental income and profits from trading and development activities but not property revaluation gains and losses which are included in the pretax figures. Despite the drag from low returns on cash, revenue profit grew from £62.2m to £64.2m.

During 2010 Grosvenor financed and refinanced £1.1bn of debt on behalf of itself and funds and joint ventures which it manages. At the end of 2010 Grosvenor had cash and committed facilities of £829m compared with £964m a year earlier. Post year end Grosvenor Britain & Ireland agreed to raise £125m of debt, for periods of 20 and 30 years, at fixed interest rates of 5.57% and 6.05% respectively, in the US private placement market, providing it with a degree of protection against inflation and rising interest rates.

The Group also published its first Environment Review.

ENDS – Notes for editors follow

For further information please contact:

Fenella Gentleman, Group Director of Communications, Grosvenor
Tel: + 44 (0) 20 7312 6435;
Mob: + 44 (0) 7920 712758;
E-mail: fenella(dot)gentleman(at)grosvenor(dot)com

Sorrel Comley, Media Relations Assistant, Grosvenor
Tel: + 44 (0) 207 312 6101
Mob: + 44 (0) 7886 458 774
E-mail: sorrel(dot)comley(at)grosvenor(dot)com

Notes to editors

Grosvenor Group Limited (Grosvenor) is a privately-owned property group
with offices in 18 of the world's most dynamic cities. As of 1 January 2011, we have regional investment & development businesses in Britain & Ireland, the Americas, Asia Pacific and Australia. Our international fund management business operates across all these markets and also Continental Europe. We also have indirect investments, managed centrally.

The Board of Directors comprises six Non-Executive Directors and two
Executive Directors. Biographies are available at http://www.grosvenor.com.

Operating Company highlights

Grosvenor Britain & Ireland (‘GBI’)
GBI reported a pretax profit of £326m compared with a £15.0m loss the previous year. Total return improved from 1.8% to 16%. Assets under management rose by 9.9% to £3.5bn, reflecting revaluation gains on the London estate – both market-driven and gains delivered through active management. GBI also significantly stepped up development activity during 2010, starting the year with one project under construction and ending it with five. It achieved planning consents on a number of projects it expects to progress in 2011. At the year end the development ratio was 18.2%. The two innovative public realm projects carried out with Westminster City Council at Elizabeth Street, Belgravia, and Mount Street, Mayfair, were both successfully completed.

Grosvenor Americas
Total returns improved significantly from -14.4% to 8.6% but revenue profit was down from C$33.5m to C$14.3m due to the reduced portfolio as a result of asset sales in the first half of the year and lower trading profits. The Canadian market continued to benefit from the strength of an economy heavily reliant on natural resources and from a sound banking system. However high unemployment in the USA led to weak occupier demand at a time when banks were seeking to reduce exposure to property. At the year end the development pipeline stood at C$1.1bn of which C$106m had been committed.

Grosvenor Continental Europe
Returns from Sonae Sierra, the shopping centre developer owned 50% by a Grosvenor controlled company, dominated Grosvenor’s Continental European portfolio, and its performance was resilient in the face of the pressures in its markets. Total return improved from -3.1% to 3.1% while revenue profit was slightly down at €33.3m compared with €37.5m in 2009. The returns from Sonae Sierra’s Brazilian operations provide significant geographical diversification.

Grosvenor Asia Pacific
The strength of the Chinese economy, which grew by more than 10% during the year, helped to ensure a strong performance from Grosvenor Asia Pacific in 2010. Revenue profit improved at HK$96.1m compared with a loss of HK$107.6m the previous year. However total returns dropped to 3.9% from 12.8% because of lower disposal profits and capital growth. At the end of the year 95% of capital was in investment assets and 5% in development projects. Long-term this ratio is likely to return to trend around 70% to 30%.

Grosvenor Australia
Grosvenor Australia performed strongly and the second half of the year saw the start of a new commodity boom fuelling the economy. Total return improved from -3.6% to 7.5% however revenue profit was down from A$30.4m to A$13.3m reflecting the absence of significant trading activity although rental income remained strong. Strong economic growth is expected in the next 12-18 months.

Grosvenor Fund Management
Markets improved during 2010 and investor confidence returned steadily. Funds under management increased from £3.6bn to £3.8bn, as a result of the recovery in real estate prices and selective acquisitions. Revenue profit increased significantly from a loss of £4.1m to a profit of £12.5m, reflecting performance fees arising from benchmark out-performance of funds over several years. Grosvenor Fund Management is looking at a number of new opportunities in each of its markets. Jeffrey Weingarten succeeded Stuart Beevor as Chief Executive in March 2011.

For further information, and a glossary of key terms, please refer to the
Grosvenor Annual Report & Accounts 2010 and the Grosvenor Environment Review available online from 9am on Tuesday 19 April 2011 at http://www.grosvenor.com.

# # #

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Lorin Horosz, Director of Marketing Communications
Visit website