Grosvenor’s chief executive of Britain & Ireland, Peter Vernon, this morning spoke candidly about the company’s 2.4m sq ft Liverpool One development saying that they paid too much for the scheme.
In a wide-ranging interview about his upbringing, career prior to Grosvenor and his time at the company, at the second Face-to-Face event (hosted by Profile, Estates Gazette and Hogan Lovells), Vernon spoke of the £1bn scheme which resulted in losses of more than £200m for the Duke of Westminster’s property company.
Funding partners, including Hermes and Liverpool Victoria, were protected from the development risk under the terms of their agreements.
“We gave a cost guarantee which was based on a cost which turned out to be too low – in a nutshell that’s what it was about.”
“There was an absolute commitment by Grosvenor to deliver what we had promised to the city of Liverpool by 2008. That put quite a lot of time pressure on the deal so we probably gave a guarantee at a stage that was a bit too early in relation to the development of the scheme.
“We did the scheme because we saw it as a good commercial opportunity and it was something Grosvenor could deliver that very few others could, and we did deliver it.
“The scheme is finished now, and it’s performing extremely well as an investment. We are an investor alongside others in the Liverpool One Fund and we are very pleased with its performance, we just paid a bit too much for it.”
Watch more from Peter Vernon’s Face-to-Face profile interview with former EG editor Peter Bill on EGTV tomorrow morning.
