Soaring land values together with astute buying and selling have helped the Queen’s commercial property empire top £10bn in value for the first time, marking an increase of 15% over the past year alone.
The Crown Estate, which runs the Queen’s land and property empire, said it would be handing more than £267m in annual profits to the Treasury, some of which would then be passed on to the Queen.
Reports from the property business, which can be traced back to William the Conqueror and ranges from tracts of seabed to the swankiest central London addresses, said total returns from capital growth and revenues reached 20% across the year. Commercial rivals, it said, had achieved 17.3%.
The Crown Estate, an independent commercial business created by a parliamentary act, has acquired part of its latest revenues from letting prime properties on Regent Street, London, to companies including J Crew and Watches of Switzerland.
It has also let new office space around Regent Street and St James’s to companies such as Twitter and Virgin Money, while raising more than £450m by selling the Intercontinental hotel on nearby Park Lane and other assets.
The Crown Estate is also the fifth largest owner of retail parks outside of London and is the frontrunner to spend £350m buying the Fosse shopping park in Leicester, amid a recovery in consumer spending.
The organisation says its primary job, as set out by parliamentary statute, is to maximise, over the long-term, the financial benefit from its assets. But it is also aiming for good business and environmental standards.
“It’s been another fantastic year for the Crown Estate and with a portfolio now valued at close to £10bn, this record performance shows that from the heartlands of our real-estate business to our investment offshore, we’re truly at our best when we’re actively managing,” said its chief executive, Alison Nimmo.
She insisted the business was not just benefitting from soaring land values in London saying “we made good [investment] decisions when others were not investing in the market”.
She added that it was not the job of the Crown Estate to tackle the problem of homelessness or Britain’s north-south divide. She said the organisation had plenty of commercial property in the north of the country and widespread rural land holdings; it had helped many coastal areas, not least through its work with windfarm developers.
The Crown Estate has responsibility for most of the UK’s seabed and so helped prepare the conditions that encouraged developments such as the London Array, the world’s biggest offshore wind farm which is installed in the outer Thames estuary.
Rent of £15m a year is being taken from the offshore windfarms by the Crown Estate, a sum that has risen by almost 50% on the previous year. The business also said it was working on other new energy projects such as wave and tidal schems and carbon capture and storage.
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