Grosvenor, the Duke of Westminster’s property company, is launching a £900mn lending business focused on residential development, as property investors eye debt investments.
The group, which primarily focusses on prime central London, most notably, Mayfair and Belgravia, wants to expand its investment into different types of residential property nationwide, including homes for sale as well as rental, student and retirement housing.
Grosvenor said funds for the lending business would come from “organic growth” and “strategic sales around the periphery of the [London] estate”.
The company’s expansion into lending reflects a growing desire among property investors to avoid buying assets outright or developing themselves, amid market uncertainty.
Some investors have been reluctant to buy assets for fear that their property prices may have further to fall in the near term.
Rachel Dickie, executive director of investment at Grosvenor said that there was “no lack of equity or debt wanting the finished product” in residential property.
“I think it’s the development bit that people are nervous about,” she added.
Dickie said that because Grosvenor was already a commercial developer, funding construction was “already within our risk appetite” and the company could more easily “take a view on pricing that risk”. It was also better placed to take over construction sites in case of defaults, she added.
So far, Grosvenor’s lending has funded 1,800 homes.
It has financed projects including 316 rental homes in Bath and a joint loan with insurance group Generali for 65 homes for sale in Canary Wharf.
