Grosvenor has booked its first negative return since the global financial crisis, as the property company counted the cost of rent waivers and reductions to its tenants throughout the pandemic.
The Duke of Westminster’s property company, which owns the Liverpool One shopping centre and properties in more than 60 cities globally, suffered a -2.9% return, as well as a 61% drop in revenue to £25.4m during 2020.
The drop in revenue was partly a result of tenant support, and partly because of increased bad debt provisions and delayed sales, the company said.
Assets under management dropped to £11.1bn from £11.9bn at the end of 2019, while property assets totalled £6.7bn, down from £7.1bn. Grosvenor’s development exposure – the level of committed development activity as a proportion of its entire property exposure – grew to 13.2%, up from 11.9% the year before.
The group said it had collected 89% of rents due for the year, a figure which increased to 95% when accounting for pandemic-related concessions given to tenants.
Chief executive Mark Preston said the company, which has sizeable estates in the Americas, also offered support for tenants across its international base. This included offering so-called “worry-free” flexible break clause leases for students in Brazil, sourced laptops for schools in Washington DC, and supported vulnerable tenants with their shopping.
“Many of these initiatives, combined with increased bad debt provisions and a delay in a number of sales, have inevitably affected our financial performance,” he said.
Preston added: “While Covid-19’s global impact has affected even the broadest diversified strategy, the case for international diversification remains compelling. There are global challenges and opportunities which we plan to address and capture within our investment strategy, notably those connected to digital disruption and climate change.”
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