The crown estate, run by regeneration specialist Alison Nimmo, owns Regent Street and much of St James’s in London, along with Windsor Great Park, large swaths of farmland and the seabed around the UK. It hands all its profits to the Treasury, about 15% of which is then passed to the Queen. The organisation’s portfolio value has hit an all-time high of £11.5bn, up 16% on 2014.
Profits rose 6.7% over the past financial year as the estate benefited from rising land values and property sales of £451m into “strong markets”, outstripping acquisitions of £327m. The group said it outperformed the market for a fifth year, with total returns from capital growth and revenues up 20.8%.
All of the crown estate’s West End shops in London are let. The estate will build half of the total new office space in the West End (about 38,000 sq m) in the coming year. There is so much demand that the group now lets new space before a building’s practical completion.
Although the property estate dates back to the Norman conquest of 1066, the organisation began in 1760 when George II handed over management of the royal lands to the government. According to the director of investment, Paul Clark, save for the “odd acquisition”, the group now focuses on new developments.
The estate made its biggest acquisition ever last summer, when it bought Fosse Shopping Park in Leicester, one of Britain’s biggest out-of-town retail parks, together with the Chinese state investor Gingko Tree for £345m. Fosse joined its portfolio of 16 retail parks worth £1.5bn, with empty space at 2%. “We haven’t bought a lot in London this year. More of the capital is going into developments,” Clark said.
While it does not build homes itself, the crown estate owns strategic land across the country that received approvals for 2,410 new homes over the past year. The estate also leases the seabed to offshore windfarms that now generate close to 5 gigawatts of electricity. The goal is to double generation to 10GW by 2020. This would deliver 10% of the UK’s electricity and bring costs down below £100 per megawatt hour. The price at present ranges up to £121.
As part of devolution in Scotland, management of the group’s Scottish assets –now worth £260m – will pass to a standalone organisation, although the crown estate will continue to own them. Assets include farmland, coastal waters and the rights for renewable energy – wind, wave and tidal power plus carbon capture storage. Annual revenues in Scotland make up less than 4% of the group’s total.
In Scotland, more than 80% of rural land remains privately owned, with about half of that owned by 432 landowners, led by the Duke of Buccleuch, the Sunday Herald reported recently. Scotland has the most concentrated pattern of private land ownership in the developed world.
The crown estate has been careful not to take sides before the referendum on Britain’s membership of the EU. Clark said: “Our preference is for the UK to remain an open economy, but how that is achieved is a matter for others.”
This article was written by Julia Kollewe, for theguardian.com on Wednesday 24th June 2015 00.01 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010