The Duke of Westminster’s property company has revealed a 38% surge in pretax profit last year as it continues to benefit from the strong London residential market.
Grosvenor posted a profit before tax of £506.9m, up from £367.8m the previous year.
The group also doubled its revenue profit – which includes rental income and profit from trading and development activities, but not property revaluation gains and losses – to £175.1m.
This is the third year in a row that the group has announced a record revenue profit driven by its Britain and Ireland division, which turned in the strongest performance, trebling revenue profit to £117.5m.
Grosvenor said this was due to significant development profit “arising from the decision to take advantage of current prime residential pricing”.
Grosvenor America’s revenue profit increased by 76% to £23.7m, also due to higher residential development profits. Asia Pacific revenue profit fell 54% to £4.5m due to lower trading profits from joint ventures.
However, Grosvenor cautioned that in light of the one-off nature of much of the 2013 trading profit “expectations for 2014 should be based more on the trend established up to 2012”.
The value of the group’s property assets remained stable at £5.8bn year-on-year as valuation gains were offset by disposals and currency movement arising from the relative strength of sterling.
Chief executive Mark Preston said: “We have had an excellent year: we doubled revenue profit, chiefly through timely disposals in London which took advantage of favourable conditions, and we delivered a strong total return of 9.7% – ahead of our long term average.
“Reflecting the confidence we have in those cities we consider to have particularly good prospects, we have restocked our pipeline of developments, which has increased from £3.4bn to £6bn, which positions us well through to 2020.”
Its fund management division did not have such a good year, posting a loss of £14.9m.
Grosvenor said this arose principally from lower fees due to the termination of funds coupled with restructuring costs in Asia and office closure costs following the sale of its legacy Australian assets.
bridget.o’connell@estatesgazette.com
