Grosvenor's operation in Britain and Ireland is the largest within the group, representing 63% of the assets. Our London portfolio is the core of the UK business, but much of our business is regional, focused on the areas surrounding three cities - London, Edinburgh and Dublin. Research is a fundamental part of our business and we have built a detailed understanding of these centres and the local markets and issues.

The Grosvenor theme of partnership underscored our investment, development and fund management activities in 1999. Our partners include institutions, companies and local authorities. We value these long-term business relationships highly; they enable us to broaden our exposure to different markets and we learn from working with other investors from the UK and elsewhere.

Grosvenor's development programme covers a broad spectrum of sectors and geographical areas and, with a total completion value of £800 million, we are one of the most active developers in the UK.

Since the mid-60s, Grosvenor has been closely associated with town centre shopping. Growing restrictions on big out-of-town developments mark a renaissance for the town centre, long Grosvenor's preferred area of operation.

We believe that the advent of e-commerce is challenging the traditional view of retailing and will contribute to the rebirth of our towns and cities as centres that have to offer an exciting mix of retail, leisure and culture and be attractive places in which to live and work.

Our major scheme to remodel Basingstoke town centre is under way funded by Equitable Life, Hermes, NPI and Grosvenor through a Limited Partnership. We have also been invited by Preston Borough Council to prepare plans for the redevelopment of a major part of Preston town centre. In Ireland, we have continued with the expansion of Liffey Valley, a shopping centre, retail and leisure park outside Dublin, totalling 139,350m2 (1.5 million sq ft).

In 1999, Enron Europe Ltd moved into a 20,000m2 (215,000 sq ft) office building at 40 Grosvenor Place which was jointly developed by Grosvenor and Mountcity plc. We created a three-way partnership with Enron and the main contractor, John Laing Construction, which enabled us to integrate base build and fit-out, saving six months and approximately10% of the total fit-out cost.

Fund management is an increasingly important part of our business. Two further acquisitions were made for the Arkle Fund, a £300 million retail investment fund with partners PGGM (the Dutch pension fund) and Equitable Life. GMETRO, a fund for investing in central London offices, was launched with an initial investment of £175 million and there are plans for it to grow much larger. Our partners in GMETRO are PFA (the Danish pension fund), PGGM and NFU Mutual.

The London Estate forms the heart of Grosvenor's residential portfolio of 771,360m2 (8.3 million sq ft) and with 493,760m2 (5.3 million sq ft) of offices and 109,120m2 (1.2 million sq ft) of retail. The Group owns the substantial office buildings around Belgravia's periphery and the apartments of Eaton Square. The remaining area is owned by Grosvenor Trusts and managed by the Group. We carry out a constant programme of improvement across the portfolio through development, investment and asset management including innovative leasing policies. In maintaining and enhancing these world famous districts, we work closely with occupiers, residents and business groups, voluntary organisations, local authorities and heritage groups.


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