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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.
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.
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.
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 tradingprofits. 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.
Fonte: CS della Società
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