The story of the Grosvenor Group – the Duke of Westminster’s vast heritage | UK News

Although the Grosvenor family is automatically linked, in many people’s eyes, to properties in the upscale neighborhoods of Mayfair and Belgravia in west London, these assets are only part of the Grosvenor Group, the company that manages the Duke of Westminster’s wealth.

The Duke, Hugh Grosvenor, who will marry Olivia Henson today, inherited title and control of historic Grosvenor Estate at age 25 following the death of his father from a heart attack in 2016.

The business now encompasses a range of assets and activities, including properties in the UK and abroad, investments in food producers and agricultural technology companies and three large rural properties in the north of England and the Scottish Highlands.

The group also controls the Westminster Foundation, one of the UK’s leading philanthropic organisations, which helps organizations working with vulnerable children and young people. The foundation, whose trustees are chaired by the Duke, has made grants of more than £6.7 million in 2022 alone.

The family invested for centuries in a diverse range of assets, including coal, stone and lead mines in Wales, when in 1677 they acquired – by marriage – a parcel of meadows, pastures and marshes to the west of the city.

This land developed from the 1720s and is now among the most valuable properties in the world.

This became the family’s main source of wealth until a major change in strategy in 1952.

This led to the Grosvenor Group selling most of its assets in Pimlico, partly to raise money to cover expected death fees from the passing of the second Duke of Westminster, with what was left used to take the business into international investment by first time – building Canada’s first industrial park. Further diversification into Australia, the Asia-Pacific region and continental Europe occurred in subsequent decades.

Having learned from its experience in Canada, Grosvenor was also a pioneer in the property sector, building one of the UK’s first covered shopping centers in Chester in 1965.

It has continued to build 16 city center commercial developments in the UK, the largest and best-known of which is the 42-acre retail and entertainment destination, Liverpool ONE, completed in 2008 in one of the country’s largest urban regeneration projects.

This development was typical of the patient way in which the Grosvenor Group is known for investing. Most British commercial property companies tend to focus solely on the UK and avoid international investment. They are structured like so-called REITs (real estate investment trusts), which must distribute 90% of their property income profits every year to shareholders.

They also tend to focus on a particular type of real estate asset. For example, the FTSE-100 company Segro specializes in industrial warehouses, while the FTSE-250 company Grainger owns residential properties.

Grosvenor, by contrast, is more diversified and is also happy to commit distributions to its owners if the money can be better used elsewhere.

Liverpool ONE, completed during the height of the global financial crisis at a time when other commercial property companies controlled their investment activities, is a good example of this.

The cost overruns led Grosvenor to make £190m worth of provisions for the £1billion project – but no one seriously argues that it wasn’t worth pursuing. This long-term approach has also seen Grosvenor build war chests in the most recent downturns in the commercial property market.

This patient approach is supported by the way Grosvenor is structured. The company is owned by a series of UK resident (in other words, land) trusts set up by the family in the 1950s to protect themselves from the risk of costly divorces or reckless spending by wayward family members.

The agreement means that although the duke and his family are the ultimate owners of Grosvenor, he will not be able, for example, to sell assets if he feels the need to raise money. Major transactions, such as asset disposals, must be agreed by administrators.

Contrary to what is often suggested, all families are registered in the UK for tax purposes and pay UK tax, whilst trusts are liable for income tax and capital gains tax.

They are also responsible for inheritance tax levied by the UK government, although, as is common with trusts of this type in the UK, most trusts pay a recurring payment to HM Revenue & Customs of 6% of the value of your assets every 10 years. years, instead of a 40% inheritance tax payment in the event of the death of the beneficiaries.

For a private company, Grosvenor is unusually open about its activities, publishing annual reports and financial statements in the same way a listed company would.

Its latest results for 2023 revealed a £400 million drop in the value of the group’s portfolio, to £8.6 billion. This portfolio is split approximately 50/50 between UK and international assets. A pre-tax loss of £28.6m for the year, compared to a profit of £110.4m in 2022.