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2021 proved another challenging year because of ongoing pandemic restrictions playing out in different ways in each of our markets.
Revenue profit was behind budget due to lacklustre residential sales in Dukes Place, Hong Kong, however, total return benefited from better-than-expected year end valuations, coming in ahead of budget. During the year, we invested in Park Tower Kinshicho, a block of 100 stratified units of a best-in-area condominium building located in one of Tokyo’s major sub-centres. The acquired units offer layouts allowing flexibility for diverse lifestyles and the needs of professionals working from home, with a location which offers direct access to all of Tokyo’s major business districts. The investment was made in joint venture with a longstanding Grosvenor co-investment partner in Asia.
Also in Japan, we were delighted to see two of our Tokyo properties be awarded Development Bank of Japan Green Building Certification. Grosvenor Place Kamizono-Cho achieved the highest rating of 5 stars and The Belgravia Azabu a 4-star rating.In China, following the acquisition of Nanjing IFC in late 2020 in joint venture with Shui On Land, the renovation, upgrading and repositioning works on both retail and office spaces are starting to bear fruit even though completion of these works is not expected until the end of this year. For example, during the year the building was awarded LEED Gold and WELL certifications. Footfall and trade in the mall continues to improve at pace.
We also made very good progress during the year in advancing our ‘strategic adjacencies, proptech and digital’ initiative. We now have three direct investments in our portfolio and through our investment in venture firm Taronga’s maiden fund, exposure to a much broader range of property-related technology companies. Our team is gaining valuable knowledge in areas such as artificial intelligence, data analytics and business intelligence as applicable to real-time problem solving and optimisation for property, portfolio and building management operational issues.
As we look further into 2022, it must be acknowledged that pandemic, economic and geopolitical-related headwinds remain. While the fundamentals of the economy in China remain solid, because of its Covid management policy, travel between China and the rest of the world remains curtailed while its trade continues. Hong Kong has suffered significantly because of this approach given its very externally linked economy, and consequently we maintain a muted outlook for the residential and office sectors.
Against this backdrop, we will help reshape Grosvenor’s Asia property portfolio in line with our Group’s revised strategic direction and we remain excited about the prospects for our investment with Shui On in Nanjing IFC and positive about the resilience of our residential portfolio in Tokyo.