Downing offices portfolio hit as value falls by £9.5m

Dec 3 2008 by Tony McDonough, Liverpool Daily Post

LIVERPOOL’S biggest commercial landlord, Downing, says the value of its office portfolio has fallen in the past year from £126.5m to £117m.

The firm owns and asset manages around 1m sq ft of commercial space across Merseyside and the north of England.

The value of the commercial property market has fallen in the past year, and this is reflected in the fall in the value of its properties which include the waterfront Port of Liverpool Building and The Capital, the former headquarters of Royal & Sun Alliance, which it purchased in 2006 for a record £51m.

In the firm’s annual review, joint chief executive Sally O’Brien said: “During the year 2007-2008, the turnover across the range of activities was £61m.

“The group used £8m of its own equity to grow the business. Clearly, funding became a dominant issue within the property market and beyond. Our gearing (borrowing) remained sensible and comfortably within banking covenants.

“The main change to our property investment portfolio was the sale of Wellington Buildings, Liverpool, and improvements to our asset base through internal investments which helped maximise value.

“Significant improvements to the Port of Liverpool Building and The Capital will continue into the new financial year as well as improvements to all the buildings. The valuation of our office investment portfolio upheld at £117m. Our rental income amounted to £7.6m and the debt we had against this was adequately hedged to mitigate our exposure to interest rate risk.”

A big plus for Downing during the 2007/08 financial year was the performance of its construction division, which doubled its turnover to £31.6m.

Ms O’Brien added: “The main workload was focused on Manchester and Leeds, while the division took care of the major refurbishments at the Port of Liverpool Building and The Capital in Liverpool.”

Chairman and founder George Downing said the firm was now active in four UK cities, Liverpool, Manchester, Newcastle and Leeds.

He added: “In Newcastle, our record-breaking planning application for the £200m Downing Plaza scheme was followed by the largest pre-let the city has seen in a generation.

“Newcastle University Business School committed to 100,000 sq ft of space over 22 years. In Yorkshire, our development team secured a similar deal with Leeds Metropolitan University involving a 22-year pre-let for 110,000 sq ft of teaching space.”

The group’s turnover across all its activities for the year was £61m.

tonymcdonough