Business

Family investment group launches fund to back London’s hospitality sector

Grosvenor Group, owned by the Duke of Westminster, has launched a fund to back the expansion of retail and hospitality businesses in London. 

It has just agreed to provide its first commercial loan to the Sethi family who want to launch a new restaurant in London’s Mayfair.  

The plan suggests the division between landlords and tenants is starting to blur, as they seek ways to move out of the pandemic. 

The Sethi family’s new outlet, Bibi, will be part of its JKS Restaurants chain, whose other businesses include Gymkhana, Hoppers and Sabor.  It will be on North Audley Street, which offered an extensive outdoor eating experience during the pandemic.

Grosvenor is also close to unveiling a commercial loan deal with a food chain called Atis, which has a branch in Spitalfield and wants to open new premises in Victoria.

A third deal could lead to Grosvenor offering equity finance to another retail or hospitality business.

Grosvenor says it is offering equity finance and commercial loans through a Tenant Investment Fund building on a relationship with 500 retailers and hospitality firms in Mayfair and Belgravia. 

It wants to invest in tenants with new business ideas and diversification strategies following the pandemic, which has killed off 10% of the sector.  

Even successful hospitality businesses can be thinly capitalised, making banks reluctant to supply loans in the current environment. Landlords like Grosvenor are far better placed to evaluate their potential. 

Grosvenor’s tenant fund marks a twist on the way it has facilitated residential, commercial and social housing schemes in West London since the 18th Century. 

In 2020 it waived, or deferred, rents for suffering tenants, leading a fall in profit to £25.4 million against £65.9 million. 

The provision of support to tenants in a difficult trading environment has become popular in North America, where Brookfield has set up a $5 billion tenant rescue fund.

Bryon Trott’s BDT Partners raised $9.1 billion in 2020 for a fund to buy family-owned businesses with potential to regrow. JAB Holdings, run by the Reimann family, has worked with Trott for several years to acquire, and revive US hospitality chains. 

Property developers are starting to view tenants as operating partners, rather than a source of rents. Relationships with local tenants around a food anchor are being helped by landlord initiatives like the provision of entertainment, craft centres and local power generation. 

John Mulryan of family-run developer Ballymore, recently said he was less inclined to woo tenants with global brands than in the past. Instead, he likes to think local. 

 

Subscribe

You will need a Premium Plus Subscription to access this database.

Exclusive news, analysis and research on global family enterprise and private investment offices.

Access to the most comprehensive fully interactive database on global family offices, principal investment offices, and family enterprises.

Check Deal Data, Senior Staff, and New Analysis on more than 500 family/principal investment and holding groups

Already have an account? Login

Subscribe

You need at least a Premium Subscription to read this article.

The most comprehensive information service on the global family enterprise world, featuring exclusive news, analysis, research and data on global family enterprises, family offices, and private investment offices.

Premium

£ 299

Annually

  • Exclusive reports, analysis and commentary
  • Exclusive access to family/private investment office deal information
  • Exclusive interviews with principals and senior management of family/investment offices
Subscribe now

Premium Plus

£ 399

Annually

  • Access to All of Premium
  • Access to all of FamilyCapital Analytics, our interactive database with more than 500 detailed profiles of family investment groups

More Info

Subscribe Now

Already have an account? Login

Subscribe

Exclusive news, analysis and research on global family enterprise and private investment offices.

Membership

Free

  • Exclusive reports, analysis and commentary
Sign up

Premium

£ 299

Annually

  • Exclusive reports, analysis and commentary
  • Exclusive access to family/private investment office deal information
  • Exclusive interviews with principals and senior management of family/investment offices
Subscribe now

Premium Plus

£ 399

Annually

  • Access to All of Premium
  • Access to all of FamilyCapital Analytics, our interactive database with more than 500 detailed profiles of family investment groups

More Info

Subscribe Now

Already have an account? Login

Leave a Reply