Grosvenor shifts focus as profits dip

The Duke of Westminster’s property and asset management firm, Grosvenor, saw profits and turnover drop in 2011 as it shifted its focus to property investment and asset management, particularly in Asia, to take advantage of growth opportunities. The group, which owns commercial and residential developments in Scotland such as the Edinburgh Technopole science park joint venture, saw revenues fall from £214.7 million to £195.2m, and pre-tax profits slide from £394.8m to £315m in the year to the end of 2011. This was due mainly to falls in values, notably of retail properties in Europe, the firm said.

But the company said that “revenue profit” – its own measure of underlying performance – rose 25.9 per cent to £80.8m.

Assets under management rose from £10.9bn to £12.5bn due to acquisitions and valuation growth, it said.

Grosvenor’s 600-home residential development in Edinburgh, Springside, is expected to be completed by 2015, it added. The firm bought out its joint venture partners in the former brewery site, the Royal Bank of Scotland and developers AMA, last year.

It noted that the core aim of its Britain & Ireland division is to reinvest in its top-end London estates, which includes large swathes of Belgravia and Mayfair.

The publication of the results of the duke’s family owned investment vehicle came as a new report revealed that commercial property development activity in the UK grew for the first time in nine months during March.

Estate agent Savills said that its March data pointed to the strongest monthly expansion in total commercial development activity in over two years. Growth was occurring at the same rate outside of London as in the capital, as developers anticipate a “demand-side improvement”, Savills said.