Grosvenor reports further losses at Liverpool One

Liverpool One inflicted more financial pain on Grosvenor in the past financial year, losing £165.3m and contributing to the group's overall loss of £593.9m for the 12 months to 31 December 2008.

Grosvenor said the £165.3m loss included a decline in capital value but also a £121.6m trading loss based on 'construction and letting progress, an estimate of the remaining costs to complete the project and its investment value at completion.'

The balance sheet provision is the latest made by Grosvenor on the £1bn, 43-acre, 2.4m sq ft regeneration project. In 2005, a £10m write-down was recorded, £140m of cost over-runs followed in 2006, and values fell £49m in 2007.

The Duke of Westminster's property company owns 23.5% of Liverpool One through the Grosvenor Liverpool Fund, alongside other investors.

Managed by Grosvneor on behalf of the fund, Liverpool One is 90% let and trading well with consumers, the company said.

Overall, in the year to the end of 2008, group net asset value was down 7.4%, from £3.1bn to £2.8bn. The value of total assets under management, including those directly owned and those managed on behalf of other investors, fell by only 2.3% from £12.9bn to £12.6bn.

The pre-tax loss of £593.9m in 2008 compared with a profit of £524.0m the previous year, mainly due to the fall in capital values.

Mark Preston, group chief executive, said: "This is a challenging time for the property industry and inevitably Grosvenor has been affected. But the impact has 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."

The developer said it would delay the start of new projects and concentrate on completing existing ones.

An outline planning application for the Preston Tithebarn joint venture with Lend Lease is due to be discussed by Preston City Council in May 2009.

As at 31 December 2008 Grosvenor had cash and undrawn committed facilities amounting to £523m, compared to £607m in 2007, and relatively low gearing.

Preston continued: "2009 is likely to be another difficult year of continued credit restrictions and poor confidence in the occupier markets. Looking beyond the downturn, our significant financial capacity puts us in a good position to take advantage of the excellent buying opportunities which will arise as the property market recovers."