UK’s wealthiest man not yet ready to invest in the British property markets
It is too early to start investing big time in the UK real estate market and better opportunities will come along, according to the property company owned by the country's wealthiest man.
The chief executive officer of Grosvenor Group, which is owned by the Duke of Westminster, said it has £523 million available for acquisitions but it is not yet ready to invest it in the UK markets.
'People talking about green shoots of recovery have been spending too much time looking at the bulbs in their garden. By being patient there will be more compelling opportunities coming in due course,' declared Mark Preston, CEO of the London based company.
Grosvenor, owned by the Duke of Westminster's family trust, began hoarding cash two years ago to allow the company to take advantage of an anticipated decline in property values.
Prices for homes and commercial properties in the UK slumped last year, while high levels of household and government debt combined with reduced bank lending will prevent values from recovering anytime soon, Preston said.
'This downturn is going to be long and hard. We're approaching all planning with that view,' Preston said.
UK commercial property values fell 26% last year while average residential prices dropped 16%, according to data compiled by Investment Property Databank and Lloyds Banking Group Plc's Halifax division. About 42% of the £12.6 billion of properties owned or managed by Grosvenor are in the UK.
While Grosvenor plans investments for decades, most other property buyers have shorter term profit objectives, Preston said. Grosvenor aims to expand its fund management arm, which manages £4.2 billion of assets, and has begun preliminary talks that may lead to the purchase of businesses or asset management teams. It is also considering opening an office in China.