Finance News

The Queen’s Estate makes Record Returns

Em Morley - June 21, 2012

Mounting farmland values, and a rise in demand for central London retail spots, have aided the Queen’s property portfolio to make record-breaking returns this year.

The Crown Estate is the company that owns and manages the monarch’s land and property in the UK. They made a net profit of £240.2m in the first three months of the year. This 4% annual growth highlights the worth of the sovereign’s assets, including large portions of London’s Regent Street, and 106,000 hectares of countryside.1

The capital value of the Crown’s properties reached £8 billion for the first time this year, an 11% rise on 2011. Total yields of 16.8% mean that the Crown Estate has outpaced the IPD index industry benchmark by a staggering 10.4%.1

The Queen's Estate makes Record Returns

The Queen’s Estate makes Record Returns

Chief Executive of the Crown Estate, Alison Nimmo, says: “Our super-prime portfolio and active asset management have been the cornerstones of this strong financial performance and resilience during recent market volatility.”1

The rural assets of the Crown witnessed strong progress during the year, making total returns of 19.5%. They experienced a 13.3% rise in value, to £1.2 billion, and £25.9m in revenue.1

Farmland values have surpassed most other areas of the UK land and property market in the last few years, reaching a record high of £6,156 per acre in 2011.1

Nevertheless, the company’s marine estate has performed best out of the Estate’s three core divisions. Marine assets include the seabed for 12 miles from the shore, and large portions of beaches in the UK.

The value of the marine estate has been fuelled by added investment in offshore wind farms, and a high demand for dredged aggregates for the construction trade. The value has increased by 23.6% to £725.6m, and makes £55.6m revenue.1

The portfolio belongs to the monarch for their time on the throne, but does not comprise Buckingham Palace, Windsor Castle, or the Balmoral Estate, which are owned by the Royal Family.

The Queen cannot buy or sell assets belonging to the Crown Estate, but does take a share of the company’s revenues.

An agreement made in 1760 between King George III and the Government determined that the Crown Estate manages the portfolio, with additional revenue going to the Treasury. The Treasury then makes an agreed annual payment to the monarch.

However, this arrangement was abolished in 2011, with the Sovereign Grant Act taking its place. This means that the monarch receives 15% of the Crown Estate’s revenues.

1 http://www.ft.com/cms/s/0/649e3640-b944-11e1-b4d6-00144feabdc0.html#axzz3RXdM3PZS