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Grosvenor's £600m pre-tax loss 'resilient'

The Duke of Westminster’s property company Grosvenor has posted a pre-tax loss of almost £600 million for last year after the real estate slump wiped more than £500 million from the value of its portfolio.

The group, which developed the Liverpool One retail quarter and owns much property throughout the West End of London, reported pre-tax losses of £593.9 million for 2008.

This is compared to a profit of £524 million the year prior.

But Grosvenor said a 7.4 per cent fall in net asset value of its portfolio, to £2.8 billion, in fact displayed relative resilience in a market devastated by the recession.

The group said its pre-tax losses were “primarily a consequence of the impact on Grosvenor’s portfolio of the decline in asset values in many of the markets in which [we] operate, and excludes currency benefits of £304 million which are taken in reserves”.

Writedowns of £536.7 million included a reduction in value at its Liverpool One site of more than £165 million, despite the scheme only completing last May.

Grosvenor chief executive Mark Preston said the impact of the economic crisis had been “cushioned by our well-diversified portfolio, low gearing, and steps taken since 2007 to curb acquisitions and reduce our development exposure”.

“Hence, the impact on net asset value is relatively limited,” he added.

Grosvenor cut about 3 per cent of its workforce at the end of last year and has reigned in development activity and acquisitions to conserve cash over the past 18 months.