Story highlights
The Queen's property portfolio returned a record-breaking income surplus this year
The company that owns the sovereign's property and land in the UK made a net profit of £240.2m in year to March 31
The capital value of the estate's assets hit £8bn for the first time during the year
Rural holdings experienced strong growth with total returns of 19.5 per cent
Soaring farmland values and increased demand for central London retail outlets helped the Queen’s property portfolio return a record-breaking income surplus for the year of her Diamond Jubilee.
The Crown Estate, the company that owns and manages the sovereign’s land and property in the UK, made a net profit of £240.2m in the year to March 31. The 4 per cent year-on-year increase underscores the quality of the Crown’s assets, which include large swathes of London’s Regent Street and 106,000 hectares of farmland.
The capital value of the estate’s assets hit £8bn for the first time during the year, marking an increase of 11 per cent on 2011. Total returns of 16.8 per cent meant the company outperformed the industry IPD index benchmark by 10.4 percentage points.
“Our super-prime portfolio and active asset management have been the cornerstones of this strong financial performance and resilience during recent market volatility,” said Alison Nimmo, chief executive of the Crown Estate.
The Crown’s rural holdings experienced strong growth during the year, generating total returns of 19.5 per cent, comprised of 13.3 per cent uplift in value, to £1.2bn, and revenues of £25.9m.
Farmland values have outperformed almost all other areas of the UK land and property market during the past few years, hitting a record £6,156 per acre during 2011. The rise in values has been underpinned by increasing soft commodity prices and the push to find sustainable alternative fuel sources.
However, it was the company’s marine estate, which includes the seabed for 12 miles out from the shore and large stretches of the UK’s beaches, which produced the best performance of the company’s three core divisions.
Growing investment in offshore wind farms and demand for dredged aggregates for the construction industry helped lift the value of the marine estate 23.6 per cent to £725.6m and generate revenue of £55.6m.
The portfolio, which belongs to the monarch for the duration of his or her time on the throne, does not include Buckingham Palace, Windsor Castle or the Balmoral estate in Scotland, which are directly owned by the Royal family.
The Queen has no powers to liquidate assets belonging to the Crown Estate. She cannot buy or sell properties and is entitled to a modest slice of the company’s revenues.
Under an agreement struck between King George III and the government in 1760, the portfolio was managed by the Crown on behalf of the state, with surplus revenue going to the Treasury. In turn, the Treasury made a fixed annual payment to the monarch.
The agreement was overturned in 2011, however, and replaced with the Sovereign Grant Act under which this year the Queen will receive 15 per cent of the Crown Estate’s revenues.
