Grosvenor has amassed a £6bn residential-heavy development pipeline after adding schemes valued at £2.6bn last year.
The Duke of Westminster’s development programme comprises close to 65% residential.
The balance of the predominantly UK and North American pipeline is roughly equally shared between retail, offices and hotels on 10% each and mixed-use on 5.4%.
After signalling concerns last year about the high level of property values in the prime central London housing market, the group is moving into the mid-market “where there is unsatisfied demand for good quality housing for rent”.
Chief executive Mark Preston said Grosvenor’s £51m purchase of the Biscuit Factory redevelopment site in Bermondsey, SE16, in October last year, earmarked for 800 homes, illustrated this shift.
He added that the firm’s decision to sell £240m of luxury residential schemes in 2013 was taken “as an opportunity to harvest returns and did not reflect any cooling on London residential”.
The strategic sales saw the firm double its revenue profit – which includes rental income and profit from trading and development activities, but not property revaluation gains and losses – to £175.1m, boosted by Britain and Ireland, which trebled its share to £117.5m.
It is the third year in a row that Grosvenor delivered a record revenue profit. But the group cautioned that owing to the one-off nature of trading profit, it would drop back to less than £100m in 2014.
Pretax profit increased by 38% to £506.9m, while total returns were 9.7%, up from 7.2% last year.
At the year end Grosvenor’s gearing stood at 29% and it had £1.1bn of committed undrawn credit lines that could be ploughed into its development pipeline.
bridget.oconnell@estatesgazette.com
