The Howard de Walden Estate was back in the black in its most recent financial results, a recovery in rental income from its healthcare, residential and retail assets offsetting a drop from its offices.
Rental income on the 92-acre family-owned estate, which stretches across Marylebone, rose by 2.7% to £135.4m in the year ending 31 March.
The estate posted a £90m, or 2%, rise in investment property value, from £4.54bn to £4.63bn. That helped to drive a pretax profit of £199.8m, following a £101.8m loss a year earlier.
The estate sold two properties during the year, both offices, at 4-6 York Street, W1, and 2 Cavendish Square, W1. It described both as “non-core” and said it was “taking advantage of excellent market sentiment for good investment stock”.
Offices income fell by £3.5m, or 12.2%, despite an improvement in grade-A stock leading to an increase of 3.4% in like-for-like valuation. In contrast, rental income rose by 19% in the retail portfolio, 7.9% in healthcare and 0.7% in residential.
Chief executive Mark Kildea told EG: “We were positioning the business to deal with opportunity, so we increased our financial strength during the year. We took actions to get through all the problems in the office sector and retail has bounced back strongly.”
He added that the economic and political climate the company now faces “has parallels with the 1970s”, but said that although the country faces an economic downturn, the steps the company has taken mean the business is in “good stead, whether that’s facing downturn or opportunity.”
“The results show recovery from the pandemic,” said chief financial officer Andrew Griffith. He added that the increase in rental income was “only a small percentage” but “shows the resilience of the portfolio” after early 2021, which “was looking very bleak at times”.
Griffith said: “We sold a couple of large commercial office buildings. The intention is that we will recycle that capital back into the estate but what I think it does do is give us some resilience in the balance sheet for any sort of headwind in the economy. The intention is that we will look to take advantage if there are any opportunities.”
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