Grosvenor is expecting further growth in its fund management business this year following a 9% boost to assets under management in 2011.
The Duke of Westminster’s property company this week reported assets under management of £12.5bn, up from £10.9bn in 2011 and close to levels last seen in 2007.
The company said the increases were due to valuation uplifts and acquisitions.
Net asset value increased by 7% during the year under review to just under £3bn, while revenue profit – which includes rental income and profit from trading and development activities – increased by 26% to £80.8m – up from £64.2m a year earlier.
However, faltering values across the group’s retail portfolio meant that pre-tax profit dropped by 20% to £315m.
Group chief executive Mark Preston said the results showed the benefit of “the extensive reshaping of the group over the past few years” and a new focus on operational efficiency.
At the end of the year, Grosvenor’s development exposure stood at 15.7% after its pipeline grew to about £3.2bn.
The group’s fund management business had a strong year, launching four vehicles, investing £762m and adding £1.2bn to its £5bn of funds under management.
Preston said: “We do not expect 2012 to be the year in which everything becomes clear. In too many markets, current property prices reflect the security and income characteristic of property as an asset class, rather than the underlying economic fundamentals of those markets, so buying opportunities remain scarce and discipline and patience will continue to be required.”
? Grosvenor has provided funding for the relaunch of Industrial Ownership, a shed investment vehicle, led by John Sims and Angus Scott Brown. IO will buy multilet industrial estates and small business parks throughout the UK, with an initial investment programme of £35m. It will target lot sizes of £2.5m-£4.5m. Grosvenor’s investment in the business is part of its strategy to use third-party specialist expertise to gain exposure to sectors and geographies that are not accessible through its proprietary and fund management activities.
bridget.o’connell@estatesgazette.com
