Annual Report 2012 - Cadogan

CHAIRMAN’S STATEMENT 31 DECEMBER 2012
VisCount Chelsea
I took over as chairman of Cadogan Group Limited from my father in March 2012. Since then I am delighted that the
group has continued to prosper and 2012 has proved to be a successful year in which to have taken over the reins of
our business.
The eyes of the world were focused on London in 2012. The Queen's Diamond Jubilee celebrations, the Olympics and
the Paralympics were all successful and greatly acclaimed. The great sense of history and tradition, for which London
has always been known, married perfectly with London's modern cosmopolitan culture and ethnic diversity to produce
truly memorable events again and again.
While the sporting and cultural events of 2012 took centre stage, the economic backdrop provided continuing strong
support to activity levels and market sentiment. London’s broad international investment appeal has proved a great
strength, enhanced by its status as an international ‘safe haven’, and by the continuing weakness and wobbles of the
Eurozone. Each renewed bout of economic fragility in Europe or political instability in the Middle East has only added
to the perceived attractions of London.
These factors have contributed to the desirability of London as a place in which to work, to live and to operate a business.
They help to generate continuing healthy levels of occupational demand for both residential and commercial properties.
Thus the property market in central London has flourished with yields remaining firm and with high levels of investment
and occupational activity. Again the strength of the property market in London has been in marked contrast to much of
the rest of the UK, where the lack of any consistent growth in the economy and a depressed property market have
produced poor returns and minimal activity levels.
With all our property interests focused in central London and specifically in Chelsea and Knightsbridge, I am therefore
able to present another successful set of results for 2012. The total value of our properties reached £3.88 billion, gross
rental income £104.7 million and profit before taxation was £57.3 million. This is less than the profit before taxation
figure we reported last year of £71.6 million, but the reduction largely reflects a lower write back of £3.9 million (2011
- £16 million) from the release of provisions made previously against the value of our investment properties.
In spite of the gloomy prognosis for the broader UK economy, the outlook for London remains positive. There will come
a time when the property market in the UK regions starts to recover, but there is no reason to expect that that will of
itself damage London's prospects. We believe that our attractive locations and clear strategic priorities will enable our
business to continue to prosper in the years ahead.
I was delighted to announce at the end of 2012 that Francis Salway had agreed to join the board as a non-executive
director. As former Chief Executive of Land Securities and a non-executive director of Next plc, Francis brings immense
experience and judgement which we are already benefitting from greatly and which augment the considerable talents
provided by the rest of the board.
I have very much enjoyed my first year as chairman of Cadogan, and I am extremely grateful to my fellow directors and
all our staff, led by Hugh Seaborn, for the guidance and assistance which they have given me over this time.
Viscount Chelsea
25 April 2013
VisCount Chelsea
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