Richest millennial in Britain faces first global crisis in charge

London

HUGH Grosvenor, the UK's richest aristocrat, was just a teenager when the last recession struck in 2008. As the pandemic threatens an even worse economic crisis, new accounts suggest he will likely ride it out.

The 29-year-old seventh Duke of Westminster heads one of the world's oldest real estate fortunes, whose current London holdings date back to the 17th century.

Grosvenor Group, which dominates London's pricey Mayfair and Belgravia neighborhoods, said it had the firepower to weather the worst of the lockdown and continue its growth plans once the outbreak passes.

While revenue profits halved to £65.9 million (S$115.5 million) last year, property assets rose slightly to £7.1 billion. It is still proceeding with £4.9 billion of developments in the UK and globally - and has waived rent for the 26 charities that occupy a chunk of its London estate.

"Our very strong financial position enables us to support our communities at this critical time, but also provides us with the capital to take forward our future plans," chief executive officer Mark Preston said in a statement.

The group's low leverage - about a fifth of its shareholder equity - means the family fortune won't take too sharp a hit. It issued a final dividend last month to complete a £46 million payout for 2019, about the same as the previous year.

The Duke is the youngest British billionaire to appear on the Bloomberg Billionaires Index, a ranking of the world's 500 richest people, with a net worth of about US$12 billion.

His family trace their lineage back almost a thousand years to a relative of William the Conqueror, who invaded England from Normandy in 1066.

Their initial wealth was accumulated through mines and minerals, but they owe their modern fortune to a 17th century marriage.

Sir Thomas Grosvenor received 500 acres of swamp and orchard to the west of the City of London as a dowry from the parents of his 12-year-old bride.

There may be some short-term pain with about half of Grosvenor's property assets located in London. Lisbon, Shanghai, Vienna and Monaco are the only major prime residential markets set to see growth in the rest of 2020, Knight Frank predicted.

But the British capital is expected to bounce back in 2021. For now, some properties in the neighbourhoods that traditionally attracted hedge funds and the richest of residents are welcoming a new type of tenant.

Grosvenor said in the statement it had made a number of properties in Mayfair and Belgravia available to key workers and local government. It is also offering rent deferrals and rent-free arrangements to vulnerable retail tenants and other commercial businesses.

Grosvenor has not furloughed or laid off any staff during the virus crisis, a spokesman said, while the Duke himself has donated more than US$15 million to help the UK's ongoing relief efforts. BLOOMBERG