Press Release

THE CROWN ESTATE ANNOUNCES PROFITS OF £211.4 MILLION

9 July 2008

The Crown Estate has announced today a net revenue surplus of £211.4 million for the year ending 31 March 2008, a 5.6% increase on last year. All of this money is paid to the Treasury for benefit of all UK taxpayers. Turnover was £264.8 million, an increase of 1.0%. The capital value of The Crown Estate increased by 3.3% over the year to £7,328 million.

Please follow the link to our Annual Report and Accounts.

Ian Grant, Chairman of The Crown Estate, said: “2007/08 has been an excellent year for The Crown Estate in difficult market conditions. These results show we have become increasingly opportunity-focused, and have put in place firm foundations for active portfolio management in the future.”

Our total return performance of 7.7% significantly exceeded that of the industry benchmark, the Investment Property Databank (Quarterly Index) of -9.1%.

Roger Bright, Chief Executive of The Crown Estate, said: “This has been a challenging year for the property sector. Although we take a long-term view and focus on good quality assets that will sustain continued growth for the future, we are nevertheless subject to short-term market conditions. I am pleased to report that we have navigated through troubled waters with demonstrable success and are well-positioned to face the challenges that lie ahead.”

This year’s success in the face of difficult economic conditions can be attributed to our investment strategy, which has seen a rebalancing of our portfolio and a reduction in our exposure to high risk sectors such as central London offices, and asset management activities across all sectors of the portfolio.

On the urban estate we have also acquired new residential property and entered into investment partnerships such as the Gibraltar Limited Partnership. This is a £600 million 50/50 arrangement with British Land to own and manage large retail parks, enabling both parties to share expertise and generate attractive rewards from a portfolio of retail parks.

We have also made a number of key disposals, including the Quadrangle in Oxford Street. This sale, together with others in High Holborn and elsewhere in London, is part of our strategy to dispose of non-core assets in order to concentrate on our core London holdings – including Regent Street – and to increase our diversification outside central London.

The economic climate has resulted in a slight drop in urban estate turnover to £194.4 million, down 0.7% on last year and also in property values to £5,381 million, down 0.2% on the same period last year.

The Quadrant, our most important current Regent Street development, continued to make good progress during 2007/08 with planning consent granted by Westminster City Council in December 2007. The Quadrant is a mixed-use regeneration scheme of the Regent Palace Hotel, Café Royal and Quadrant Arcade blocks, at the southern end of Regent Street, just off Piccadilly Circus. This redevelopment is a key milestone in our £500 million Regent Street investment programme; one that will create a new 1 million sq ft built area in the heart of the West End, with an additional 44,000 sq ft of public realm area. After Trafalgar Square, this will be the most significant addition to London’s public realm seen in the West End over the last 30 years.

The marine estate had a very good year, with turnover increasing by 9.4% to £41.9 million and property value increasing by 10% to £370.2 million. During the year the marine aggregates business performed well and contributed £17.7 million, up 13.3% on last year.

2007/08 was characterised by important progress in three distinct marine areas: in our established business sectors; in developing our portfolio of interests, through direct investment; and in continuing to identify and evaluate the latent value in the estate, such as the potential for renewable energy generation.

In Conwy in north Wales, we acquired our first marina. The 165-berth Deganwy Marina offers excellent sailing and will be leased to Quay Marinas. Our strategy to expand our marina interests was endorsed during the year by a comprehensive study which revealed the vital role played by marinas in economic development. The Economic Benefits of Coastal Marinas of the UK and Channel Islands Report shows that the sector directly employs over 1,700 people, supports the employment of a further 22,000 people and adds value of over £500 million a year to the British economy.

The property value of the rural estate, comprising some 780 agricultural tenancies as well as around 730 residential tenancies, forestry and natural mineral resources, was £903 million, 26.5% up on the previous year. Turnover increased by 0.9% to £22.5 million.

Demonstrating our commitment to remaining a long-term rural landowner, this year saw the purchase of the historic Tabley Estate near Knutsford in Cheshire. At £35 million, this was our largest rural acquisition for many years.

We continue to develop and implement new and more effective ways in which our expertise and experience can be aligned more closely with those of our customers, for mutual benefit. Towards the end of the financial year we confirmed an agreement to work with our tenants and premium retailer Waitrose, to pilot the development of a new red meat supply chain. If this project is successful for all parties we anticipate expansion to other product areas, offering new opportunities to many of our tenants across the rural estate.

Turnover for the Windsor estate was £5.8 million up by 5.5% with a property value of £173 million, an increase of 1.8%. The net cost of maintaining Windsor Great Park as a valuable historic and unique environmental public amenity was £2.1 million. The running costs were offset by net income derived from commercial and residential property amounting to £4.8 million and agricultural and forestry revenue of £1 million.

Despite the closure of Windsor Great Park for six weeks in September 2007 due to the nearby outbreak of foot and mouth disease, overall visitor numbers to the new visitor centre at The Savill Gardens, part of The Royal Landscape within the Great Park, increased to 413,000. The Savill Building was once again recognised for its innovative design and was one of only two UK finalists in the RIBA Stirling Prize 2007. Since its opening in June 2006, the building has attracted over 800,000 visitors and been recognised by 11 award schemes.

During the year, we also completed the restoration of the car park at Virginia Water. This important facility has now been modernised, with new ticketing arrangements, making it more convenient for visitors to enjoy this part of the park. Looking ahead, we anticipate an increase in visitor numbers together with progress on several important projects.

This year we are again incorporating our Corporate Responsibility (CR) report into the annual report showcasing our achievements in completing 75% of our CR targets. We are also integrating the online version into The Crown Estate’s corporate website, with a CR section that clearly demonstrates our commitment to CR and its integral place in the way that we operate as a business, and we have also produced a comprehensive CR report detailing all of our targets and KPIs. This is only available online from the corporate responsibility section of the website.