Crown Estate brushes off retail challenges as returns hit record levels
The royal family’s commercial property arm delivered a record £343.5 million to Treasury coffers last year, despite what it described as “challenging market conditions”.
The Crown Estate, which owns large swathes of land and property across Britain, said income was up 4.3% compared with last year, driven by the growth of its offshore wind business as well as acquisitions in central London.
This brings the total which the real estate business has contributed to public finances to £2.8 billion over 10 years.
Dame Alison Nimmo, outgoing chief executive of The Crown Estate said: “I am proud that despite challenging market conditions we have delivered another set of strong results and our 11th consecutive year of outperformance.
“This long-term success has been delivered by a talented team, with a clear purpose and strategy and a commitment to our chosen sectors, where we have been active investors and developers throughout the market cycle.”
The group said its property portfolio value had risen by 2.1% to £13.5 billion in the past year, while its capital value had stepped up 1.7% to £14.3 billion.
This marked slower growth compared with the previous year’s results, when property and capital value were up 6.8% and 7.3% respectively.
It comes at a challenging time for retail landlords, with a number of operators pursuing rent cuts and store closures as high street footfall declines.
But The Crown Estate’s chief financial officer Kate Bowyer said that its assets had been relatively insulated from the upheaval, as they are “well-located”.
Only three units were shuttered out of a possible 30 which were subject to closure under company voluntary arrangements (CVAs).
The occupancy rate above the portfolio remained at 97%.
But the performance of the regional portfolio was hit by challenging markets, with capital growth down by 7%.
New lettings in the division comprised 290,000 square feet, generating £6.6 million in rental income.
During the period new shops were let to the likes of H&M Home and Sandro Menswear in central London, while TK Maxx and Clarks were among the retailers to sign up to the forthcoming extension of Fosse Park shopping centre in Leicester.
In London, demand for offices in the West End remained strong, with 36 new lettings completed across 130,000 square feet of space.
It was the final set of results for Dame Alison, who is to step down from her position at the end of 2019, after eight years as chief executive.
She is to be succeeded by Dan Labbad, who joins from Lendlease.