CHINA REAL Estate Opportunities (CREO) paid a subsidiary of one of its shareholders fees of £51 million last year, according to results published yesterday.

The London-listed company reported that the value of its properties grew 61 per cent to £1 billion in 2008. The growth left it with a net asset value per share of £13.24 at the end of 2008, an increase of 59 per cent on the previous year and of 36 per cent on June 30th.

Developers John Ronan, Richard Barrett and their company, Treasury Holdings, own over 50 per cent of CREO.

During the year, CREO paid Treasury Holdings China Ltd fees of £51.52 million. The company, a subsidiary of Treasury Holdings, acts as investment adviser and manager to CREO.

The bulk of it was in performance fees of £43.77 million, made up of £29.98 million in cash and 2.26 million shares, 4.8 per cent of the company. The total performance fee paid in 2007 came to £3.59 million.

According to the accounts, the performance fee is based on increases in net asset value per share. The company assessed the value of the shares paid to Treasury Holdings China at £13.79 million. This was based on CREO’s average market price in 2008.

The performance fee payment left the company with administration expenses of £66 million for the year compared with £18 million in 2007. The remaining £7.75 million was made up of investment and development management fees.

At the end of the year CREO owed its banks £344 million, up from £247 million on December 31st, 2007. The company said this resulted in gearing of 45 per cent on the investment portfolio and 36 per cent on the total portfolio.Gross rental income grew 23 per cent to £26 million. The company incurred foreign exchange losses on dollar-denominated debt, which brought finance expenses to £73 million. This left it with a pretax loss of £92 million for the year.

CREO has a range of commercial and retail investment properties in Shanghai, Beijing and Tangdao. Its properties have more than 90 per cent occupancy.

The increase in their value was partly down to the appreciation of the Chinese yen during 2008. However, chairman Ray Horney said yesterday when the impact of this was stripped out, the result compared favourably with CREO’s peers in the west.

During the year the company bought back 3.5 million of its own shares as they were priced at a discount to the value of its assets.

Yesterday CREO said it has 47.26 million issued shares.