Falling real estate values have driven London’s Howard de Walden Estate to a pretax loss of more than £100m.
The historic estate, which spans Marylebone and includes Harley Street, said a £199.5m loss from revaluing its investment properties was the reason for almost all of its pretax loss of £102.3m over the year to 31 March 2023. A year ago the company made a profit of £199.8m.
Despite this the company hailed a near-double digit increase in rental income across its portfolio, led in large part by its office and residential units, up by 10.7% and 10.2% respectively. Excluding valuation movements, the estate’s revenue profit before tax increased 16.7% from £64.2m to £74.9m.
The increase in office income was driven by a rise in lettings throughout the year, as occupiers prioritised encouraging workers to ditch the home dining room table in favour of the desk.
This contrasted with 2022, when occupier uncertainty increasingly led to terminated leases.
Growth in residential income was due to strong demand in occupancy levels on the estate, maintained at near 100% for the duration of the year.
Healthcare income, which represents over 40% of the total income across the portfolio, increased by 9.7% year-on-year, while retail income rose by 7.5%, spurred by a recovery in footfall.
Yet the estate could not escape the wider woes facing capital values. The value of its investment properties, which include Marylebone Village and the Harley Street Medical Area, was down 4% to £4.45bn.
Howard de Walden chief executive Mark Kildea said: “Our efforts and strategy remain focused on growing long-term sustainable profits and meeting our sustainability requirements.”
Chairman Sir William Proby said: “Our growth in rental income and gross profit was impressive when set against a challenging geopolitical and economic backdrop, demonstrating the resilience of our location, our strategy, and the effort of our colleagues.
“Last year, like many businesses, we were impacted by wage inflation and rising costs. However, our teams have worked extremely hard to deliver a performance for which the Board and shareholders are extremely thankful.
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