Grosvenor, the privately-owned international property group with extensive multifamily holdings in the U.S. and Canada, reported improved results including a return to profit (before tax) of £394.8m in 2010, following a loss of £235.8m the previous year. Total return was 10.9% compared with negative 2.8% the previous year.
During the year Grosvenor's operating companies began stepping up reinvestment again, after four years of declining development exposure, using the financial capacity built up over the past two years. The Group's managed development pipeline of opportunities at year end was around £2.5bn of which £1.1bn was committed; our fund management business sees new opportunities for funds in each of our geographical markets.
Mark Preston, Group Chief Executive, said:
"We have ambitious plans for the future and during 2010 we laid the foundations for growth over the coming decade. After two years of mildly negative returns, 2010 saw them move in line with the historic long term average.
"We remain committed to expansion in Asia, especially China, and to reinvesting in our core business in London. Expanding our fund management business, now under new leadership, is also a priority."
"We still see threats to a sustained recovery, but Grosvenor's diversified business and financial prudence will stand us in good stead."
Grosvenor benefited particularly from a good performance from Grosvenor Britain & Ireland and improved returns from Grosvenor Asia Pacific and Grosvenor Fund Management.
Grosvenor focuses on revenue profit as its best measure of underlying performance. It includes rental income and profits from trading and development activities but not property revaluation gains and losses which are included in the pretax figures. Despite the drag from low returns on cash, revenue profit grew from £62.2m to £64.2m.
During 2010 Grosvenor financed and refinanced £1.1bn of debt on behalf of itself and funds and joint ventures which it manages. At the end of 2010 Grosvenor had cash and committed facilities of £829m compared with £964m a year earlier. Post year end Grosvenor Britain & Ireland agreed to raise £125m of debt, for periods of 20 and 30 years, at fixed interest rates of 5.57% and 6.05% respectively, in the US private placement market, providing it with a degree of protection against inflation and rising interest rates.
The Group also published its first Environment Review.