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Another record year with £240.2 million profit and an £8.1 billion capital value

21 June 2012

Annual report 2012

The Crown Estate earned a net profit (income surplus) of £240.2 million in the year ending 31 March 2012, up 4 per cent on the previous year. This marks another record return for our business, with the profit being paid to the Treasury for the benefit of the nation's finances.

For the first time our total capital value has reached more than £8 billion, rising in the year by 11 per cent. Total property value of the estate now stands at £7.6 billion, up 7.4 per cent on the previous year. The total return as measured by IPD was 16.8 per cent, outperforming the industry benchmark by 10.4 percentage points and our bespoke benchmark by 7.3 percentage points. During the last 10 years the portfolio has contributed £2 billion to the Treasury.

Chairman Sir Stuart Hampson said: "We're pleased to report another record financial performance and a year of remarkable achievement, which has seen us yet again make the very most of our diverse and high quality ownership by looking at the bigger picture and taking long-term investment decisions.

"Whilst we remain cautious about the prospects for the coming year we are confident that we can build on these achievements with a world-class team of energy and real estate professionals, and continued focus on our core areas."

Alison Nimmo, Chief Executive added: "It has been another tremendous year for The Crown Estate. Our super prime portfolio and active asset management have been the cornerstones of this strong financial performance and resilience during recent market volatility.

"Highlights for the year have to be the completion of our Quadrant 3 development ahead of time and budget, the launch of our most ambitious development yet in St James's and reaching the milestone of 1.5 per cent of the UK's electricity being generated by offshore wind farms on seabed we manage."

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During the year we continued to deliver on our investment strategy to drive performance. The urban estate's £300 million Quadrant 3 scheme on Regent Street is now 70 per cent let or under offer to tenants including UGG, Wholefoods, Jack Spade, REX Restaurants, Telefonica Digital and Al Gore's Generation Investment Management. A cohesive investment programme was launched for the St James's portfolio, which consulted the public on a landmark £400 million redevelopment proposal, known as St James's Market. Investment also continued in prime retail property outside London with acquisitions in Maidstone, Swansea and Milton Keynes taking this part of the portfolio past £1 billion in value for the first time.

The value of marine estate rose by 23.4 per cent and it also reached a number of important milestones during the year. There are 4.2 GW of offshore wind operational or under construction, a further 0.9 GW consented and an additional 4 GW in the consenting system. Installed capacity of offshore wind farms is now close to doubling year-on-year and already accounts for around 1.5 per cent of UK electricity production; piling began for the installation of the first met mast for Round 3 and on wave and tidal, the UK now has 36 sites operating or under development, more than any other country in the world.

During the year the rural estate's achievements included the completion of a number of sales and major re-lets and securing a resolution to grant planning permission for a 580 home development scheme on the Taunton estate, a major step forward in a renewed focus on strategic land for the delivery of capital values increases.

Financial highlights by estate:

  • The value of the urban estate's property including shares of property held in joint ventures, increased by 4.4 per cent to £5.5 billion, with an additional £539 million under management. It outperformed the IPD Annual March Universe benchmark by 6.4 per cent, delivering a total return of 12.5 per cent. Sales, acquisitions and development expenditure totalled more than £1 billion. Void rate and arrears were just 2.7 per cent (excluding Quadrant 3) and 0.4 per cent of total rental value at year end.
  • On the marine estate revenue rose by 17.3 per cent to £55.6 million and property value by 23.6 per cent to £725.6 million. Total return was 27.9 per cent. Revenue from the renewable sector more than doubled to £7.8 million from £3.5 million last year. With activity in the construction industry picking up, demand for dredged aggregates also rose delivering a revenue increase from the sector of 14.2 per cent, to £17.7 million.
  • The rural estate delivered an impressive 19.5 per cent total return, comprising 13.3 per cent uplift in value, to £1.2 billion, and a revenue return of £25.9 million, up 0.8 per cent.
  • The Windsor estate delivered a solid performance with revenue up 8.8 per cent to £7.4 million and capital value up 5.4 per cent to £195.9 million.

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