Chairman’s introduction
“I am confident that once the global downturn has run its course, The Crown Estate will continue to go from strength to strength as our previous priorities place us in good stead for the future.”
Despite an increasingly difficult economic climate, this has been another good year for The Crown Estate. Our financial results have improved year-on-year and we have returned £226.5 million to the Treasury, in the form of our net income surplus. This is an increase of 6.1% over 2007/08 (restated). However, our capital values fell by 18% to £6 billion, in line with the global downturn across all our property sectors.
2008/09 has been an extraordinary year for all of us. Events have moved at a pace and in a direction that nobody has experienced during his or her working lifetime. Against this background of market turmoil, The Crown Estate has recorded excellent results in income terms, with important contributions from each of our four estates as they continued to increase their focus on active portfolio management.
On the urban estate, although all sectors of the market were affected by a recession which worsened as the year progressed, our team navigated a path through the storm with considerable skill and commitment. The rural estate again delivered a strong set of results. Farming has experienced a number of difficulties but we have worked with our tenants to explore new ways in which we can support their businesses. At Windsor, we have seen a year of consolidation with thankfully no repeat of the foot and mouth outbreak which marred 2007/08.
The marine estate took great strides towards establishing The Crown Estate as an important partner in the Government's commitment to developing the UK's renewable energy capability. We have the expertise, the sites and also the financial resources, through our new commitment to co-invest in projects, to make a real difference in offshore wind, wave and tidal energy generation.
A challenging year such as 2008/09 places greater requirement than ever upon effective teamwork and once again our organisation owes a great debt to Roger Bright and his colleagues. They have made a tremendous contribution throughout the year and while the waters ahead will be choppy and unpredictable, we have in place a highly capable and committed team. I would also like to extend my thanks to the members of the Board for their support and expertise during the year. Not only have they provided valuable input at Board meetings, they have also shown great willingness to participate in a wide range of sub-committees, specifically with regard to the Quadrant project on the urban estate and on the marine estate.
Looking around our organisation, I have been both impressed and delighted to see how closely our people at all levels have worked together to combat the negative aspects which have prevailed in the broader economy. Together, they have faced difficult days with good humour and on behalf of the Board I extend to them our heartfelt thanks.
In our view, the year ahead will be extremely challenging: one that will require all the expertise and experience that our people can muster. Factors such as the fall in bank interest rates will impact our financial performance and prove more detrimental in 2009/10 than in the year currently under review.
I will step down from my role at the end of December 2009, so this will be the last occasion on which I will report our performance through the annual report. It has been a great privilege to lead this unique organisation for the last seven years. Despite the uncertainties of the present time, I believe our long-term fundamentals are sound and I am confident that once the global downturn has run its course, The Crown Estate will continue to go from strength to strength as our previous priorities place us in good stead for the future.
Ian Grant CBE Chairman