Billionaire Duke of Westminster to sell £700 million of US real estate assets

[LONDON] Grosvenor Group Holdings, the centuries-old British property group owned by the billionaire Duke of Westminster, plans to sell its direct US real estate holdings valued at about £700 million (S$1.2 billion) as it pivots towards indirect investments in the region.

The sale will happen “over a period of time,” James Raynor, the group’s property chief executive officer, said in an interview. Agents are being appointed to market those assets on a case-by-case basis, he added.

The disposal follows a loss of £108 million the group recorded in North America last year, driven primarily by the revaluation of two development sites in Vancouver and downward pressure on valuations in the US. This meant that despite its UK portfolio performing well, the group recorded a revenue loss of £23.2 million for the year.

With its history dating back to 1677, the group is known for developing the affluent London neighbourhoods of Mayfair, Belgravia and Pimlico. It is now a global firm with £10.5 billion of assets under management across 48 cities, according to its website. Hugh Grosvenor, its 35-year-old owner and the seventh Duke of Westminster, has a net worth of about US$12.7 billion, according to the Bloomberg Billionaires Index.

Real estate has had a challenging time since interest rates shot up in 2022. Last year, many parts of the market – including the UK – began to see an improvement on the back of a benign outlook for borrowing costs, though this has now been upended by the outbreak of the US-Iran war and concerns over an energy crisis.

“In a challenging year for global real estate, our international property performance reflected diverging market conditions, with a strong UK performance helping to offset weakness in North America,” Raynor said.

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Grosvenor’s UK portfolio delivered a profit of £88.8 million last year. This was driven by strong leasing across the retail, office and residential parts of the portfolio, much of which is based in the heart of London’s popular West End district. BLOOMBERG