Analysis: The Grand Old Duke Is on the March ; after a Bumper Year, Grosvenor Has Ambitious Plans to Expand Its Property Interests, Writes Clayton Hirst
Hirst, Clayton, The Independent (London, England)
For a man who enjoys playing soldiers as a brigadier in the Territorial Army, the Duke of Westminster should be used to sticking his head above the parapet. But Britain's richest man, worth an estimated pounds 4.4bn, has on the whole kept the source of his vast fortune relatively secret. Until now.
His great money machine is Grosvenor, the private property company that owns some of the most opulent addresses in the West End of London. The company has been in family ownership for over 300 years, dating back to when Sir Thomas Grosvenor married the rich heiress Mary Davies, owner of vast tracts of Mayfair and Belgravia. As a result of this long family history, Grosvenor's finances have been a closed book.
But on Thursday the Duke made his most open gesture yet by launching for the first time a pounds 100m bond into the public market, opening his company to the financial scrutiny of the City.
The move is part of a growing climate of transparency at the private company that is becoming the envy of many of its quoted property rivals.
Its last set of accounts, filed in April, revealed a pounds 97.5m pre-tax profit, from a pounds 1.88bn property portfolio spread across the world.
In a further sign of the company's openness, UK & Ireland chief executive Stephen Musgrave and finance director Richard Handley revealed to the Independent on Sunday their plans to strengthen Grosvenor's position as a world player in real estate.
The property industry is populated by colourful characters: take the gritty owner of Heron International, Gerald Ronson; the flamboyant boss of Helical Bar, Mike Slade; or the smooth-talking chairman of British Land, John Ritblat, to name just three. But the men running Grosvenor are surprisingly modest about the company's achievements.
Mr Musgrave is quick to point out that Grosvenor's bumper results were a one-off. "The whole economy is softer than it was last year so I think that the chances of doing it again are limited," he says.
Similarly, Mr Handley is keen to play down last week's bond issue. "We don't see ourselves as an annual visitor to the bond market. We may tap into it once or twice over a five-year period," he says.
But a quick glance at the projects that Grosvenor has been involved in over the last year tells a very different tale.
It is linked to the Millennium Dome, has pitted itself against royalty for one of London's most sought-after properties and worked on umpteen developments in the UK and abroad.
As for the Dome, Grosvenor is part of a consortium of companies hoping to buy the beleaguered attraction and surrounding land in Greenwich, east London. The Government will launch an auction for the site shortly after the election.
In partnership with Stanhope, run by veteran property developer Sir Stuart Lipton, Lend Lease, the Australian property giant, Quintain, a quoted property group, and the BBC, Grosvenor wants to transform the site into a giant development with mixed leisure, residential and office space.
"Our plans [for the Dome] will have an element of entertainment, an element of business and an element of retailing," says Mr Musgrave.
If Grosvenor wins, it will turn the Dome itself into an entertainment centre. …