Grosvenor Group warns of lower returns and revenue profit in coming years

Billy Bambrough
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Mark Preston, chief executive, said 2015 results were very much in line with expectations and the long-term trend (Source: Grosvenor Group)

Grosvenor, the privately-owned international property group which has existed since 1677, has cautioned of lower returns and revenue profit over the next few years after posting a 22 per cent fall in annual pre-tax profits to £527m.

Revenue profit, the difference between revenue incomes and revenue expenses, climbed to £83.3m last year, from £80.1m in 2014, excluding the impact of property revaluation.

Total assets under management across the group hit £13.1bn, from £11.4bn in 2014 as rental income from Grosvenor's Britain and Ireland division increased by £10.3m, driven by new developments and improvements.

Mark Preston, chief executive and executive trustee of the Grosvenor estate from the beginning of 2017, said:

The rationale for our commitment to developing and co-ordinating an internationally diversified property group became even more evident in 2015, which was a year of divergence, with a struggling Brazil, a relatively strong US and UK, and a recovery in Continental Europe, while the outlook in China is affecting growth prospects globally.

Grosvenor's investment partnership with Brazilian property management company Sonae Sierra recorded a strong performance. Grosvenor has invested in 35 shopping centres in continental Europe and 10 in Brazil.

Read more: Grosvenor’s bet on calling top of London luxury market pays off

Grosvenor, which owns large parts of Mayfair and Belgravia, paid a dividend of £39.6m to the trusts of the Grosvenor family for 2015, up from £37.7m the year before.

The group, owned by Gerald Grosvenor, the 6th Duke of Westminster and Britain’s wealthiest man with a fortune of £8.6bn, has plans for extensive investment in London and the UK this year.

Across Mayfair and Belgravia it has received planning consent for 60,700 square metres of developments.

In Bermondsey public consultation has opened on the design and delivery of a 12-acre development to create homes for private rent and affordable housing.

In Oxford Grosvenor is building 885 new homes, with consent for 400 new homes granted in Edinburgh and 1,200 new homes in Cambridge.