Grosvenor has delivered what it described as a “solid” performance for the financial year ending 31 December 2022, despite a fall in profit.
The company posted a fall in profit across its international urban property business from £99.7m to £52.7m, with its total return dropping to 3.5% from 5.2% in 2021. It blamed the fall on reduced trading activity in its North American and diversified property investment businesses, with its total return impacted by higher interest rates across key property markets.
In the UK, Grosvenor said that the value of its commercial portfolio had fallen by 3.7% but that assets in sectors such as residential and logistics increased in value overall.
Mark Preston, chief executive of Grosvenor, said: “Our urban property, food and agtech and rural estates activities all faced challenging economic conditions yet delivered a solid overall financial performance in line with our expectations and strong examples of environmental and social benefit.
“Our established strategy of international diversification, the enduring appeal of the quality of our properties and destinations, alongside our ability to time a slowdown in our property development pipeline with falling valuations and to adjust to new post-Covid work and consumer trends played a key part in helping to balance our property returns. Against this backdrop, our long-term view gives us the confidence to continue to invest.”
As well as announcing its results, Grosvenor unveiled ambitious goals to drive carbon reduction globally and deliver, at a minimum, a science-based target reduction in line with limiting global warming to 1.5°C.
“We believe that this is the right thing to do, but also see it as an essential value driver which will underpin the resilience of our business,” said Preston.
He added that Grosvenor was looking to double the size of its diversified property investments business to £1.5bn over the next five years and was looking to expand its partner network and identify opportunities to build its property portfolio across different sectors, with a near-term focus on Europe and Asia.
Preston continued: “From a macroeconomic perspective, we expect the remainder of 2023 to be very challenging, which will continue to weigh on property values but also provide opportunities for the long-term investor. Likewise, in the food and agtech sector we expect elevated economic uncertainty and inflation risks to continue to depress company valuations for some time.
“Notwithstanding that backdrop, I am clear and confident that we will stay the course with our strategy. Property as a tangible asset, and food as a basic human need, make for defensive investment options in a low-growth, inflationary world.”
