Grosvenor has published its Annual Report and Accounts for 2004, which shows a total return of 13.8% for the year ended 31 December (7.5% in 2003). Total proprietary assets increased to Â£4.0bn (3.3bn in 2003) and total assets under management increased to Â£7.7bn (up from Â£6.1bn in 2003).
Grosvenor also reports flat profit before tax of Â£93.2m (Â£91.7m in 2004) and a reduction in revenue profit to Â£30.9m in 2004, down from Â£54.2m in 2003. As explained fully in the report by Group Finance Director, Jonathan Hagger, this is as a result of higher costs incurred ahead of the start of the Liverpool Paradise Project, and investment in the international fund management business.
The report outlines Grosvenor's main areas of activity in 2004:
- In Britain and Ireland, major developments such as the Â£920m mixed use Paradise Project in Liverpool and the Â£225m Grand Arcade retail project in Cambridge, achieved critical milestones including the start of construction.
- In the Americas, Grosvenor made important new property acquisitions totaling nearly one million sq ft, including a 15-building urban retail portfolio in Washington D.C. and its first residential investments in Seattle.
- In Continental Europe, Grosvenor sold its investment in SociÃ©tÃ© FonciÃ¨re Lyonnaise and acquired over â¬145m of retail properties for its own account and on behalf of Grosvenor Retail European Properties, a new â¬430m fund focused on urban retail and retail warehousing in France and Spain.
- In the Asia Pacific region, Grosvenor acquired two office buildings for AUD$187m in Brisbane and Sydney, as well as buying two other sites for residential development in Australia - in the Northern Territories and a suburb of Sydney. The first large development in Hong Kong, the 22 story residential tower in Repulse Bay was completed and sold soon afterwards for $HK940m. The team also opened a Grosvenor office in Shanghai.
Jeremy Newsum, Group Chief Executive says: "2004 was a year when the full width and scope of the Group was prominently on display. Our total return was a substantial improvement on 2003, largely due to the extraordinary demand for property investments across the world which led to significant increases in the valuation of our portfolio. While we don't like this extreme situation we think it will continue for some time."
Jeremy Newsum continues: "We have progressed with our efforts to increase our exposure to residential markets right across the Group. In spite of well publicized recent growth in residential property values, we still believe that the residential sector has the most robust long-term characteristics compared to other property sectors."
The key themes of the statement by Grosvenor's chairman, the Duke of Westminster, are the importance of the Group's commitment to a major regeneration project in Liverpool; how a private company, such as Grosvenor, views corporate governance initiatives; and Grosvenor's growing involvement in the Universities sector around the world.