Press Release
THE CROWN ESTATE ANNOUNCE PROFITS OF OVER £200 MILLION
12 July 2007
The Crown Estate has announced today a net revenue surplus of £200.1 million for the year ending 31 March 2007, a 4.9% increase on last year. All of this money is paid to the Treasury for benefit of all UK taxpayers. Turnover was £262.2 million, an increase of 3.9%. The capital value of The Crown Estate increased by 19.4% over the year to £7,091 million.
For the full annual report and accounts for 2006/07, please follow this link:
Ian Grant, Chairman of The Crown Estate, said: “This year has been an excellent year for The Crown Estate, and as we complete our first year in our new offices, we have sent out a clear signal that The Crown Estate is a modern organisation which has at the heart of our business best working practice and clearly supports and values our employees by providing a good working environment.”
Our total return performance of 25.7% far exceeded that of the industry benchmark, the Investment Property Databank (Quarterly Index) of 15.6%.
Roger Bright, Chief Executive of The Crown Estate, said: “Last year, as I looked forward to 2006/07, I expressed confidence that our new investment strategy would enhance our financial performance and set us on an even firmer footing. I am delighted that this confidence has been reflected in this year’s results. Both the real terms increase in our profits and the growth in our capital value indicate a strong financial performance.”
This success can be attributed to our investment strategy that has led to exciting acquisitions and sales throughout the year such as the purchase of Magna Park warehouse in Milton Keynes for over £72 million, which, upon completion, will host many ‘green’ features helping to bring down the energy costs of the occupier who is already confirmed as John Lewis Partnership.
This year has also seen a very important initiative for The Crown Estate in the form of participation in a limited partnership for the first time. In September, we acquired a share of the Lend Lease Retail Partnership for £39 million giving us an equity interest in the Bluewater Shopping Centre in Kent and Touchwood Court Shopping Centre in Solihull. This approach gives us access to investments of a size and scale that have not previously been available to us.
Sales on the urban estate this year have been made in line with the strategy to dispose of secondary stock outside our core holdings and to reduce our exposure to central London offices. Consequently, disposals have been made at Bedford Square WC1, Osnaburgh Street NW1, Hobhouse Court SW1 and perhaps most notably a long lease on 13-16 Carlton House Terrace, our old London headquarters building.
As a result of these acquisitions and sales, the urban estate saw a rise in turnover of 3.8% to £195.7 million and capital value rose to £5,352 million, an increase of 17.5% over last year. It has been a tremendously active year, which has yielded great results for the urban portfolio.
Regent Street had an impressive line up of new entrants, as it welcomed Bose, Habitat, Gerry Weber and Zara Home. These were joined by new stores for Penhaligons, Duchamp, Desigual and Hoss Intropia, the Spanish retailer, which opened its first UK store, and COS who made their European debut on the street. In 2007/08 the retail offer will grow even more with scheduled openings including Armani Exchange, H&M, and the first UK openings for Nokia, Banana Republic and the first National Geographic store in the world.
The marine estate had a very good year, with turnover increasing by 3.8% to £38.3 million and capital value increasing by 13.2% to £336.5 million. During the year the marine aggregates business performed well and contributed approximately £15.8 million, up 14.5% on last year.
The Crown Estate has identified the marine estate as an area for investment with potentially good returns, which could form an important part of the overall investment portfolio of the business. The expectation is that through direct investment in the marine estate, its considerable potential may start to be unlocked. In order to achieve this, an outline investment strategy has been developed during the year and this has now moved into implementation during 2007/08.
The capital value of the rural estate, comprising some 780 agricultural tenancies as well as around 700 residential tenancies, forestry and natural mineral resources, was £714 million, 6.1% up on the previous year. Turnover increased by 3.2% to £22.3 million, notwithstanding that, a number of strategic disposals completed during the year reduced revenue potential by approximately £260,000.
Income on the rural estate continues to be supported by growth in residential and commercial rents alongside gains from non-farm enterprises. Improving commodity market conditions during 2006/07 eased the pressure on farm incomes, with the exception of the dairy sector that remains subdued in spite of buoyant world market conditions.
Turnover for the Windsor estate was £5.5 million with a capital value of £170.3 million. The net cost of maintaining Windsor Great Park as a valuable historic and unique environmental public amenity was £2.6 million. The costs were offset by net income derived from commercial and residential property amounting to £0.4 million and agricultural and forestry revenue of £0.2 million.
The completion and opening of the new Savill Building in 2006 represents a pinnacle in our development of The Royal Landscape. It now provides excellent facilities for visitors who wish to enjoy The Savill Garden and other aspects of the southern area of Windsor Great Park. The award-winning building was officially opened by HRH The Duke of Edinburgh in June 2006.
This year we are again incorporating our corporate responsibility (CR) report into the annual report, we are also integrating the online version into The Crown Estate’s corporate website, with a new, more comprehensive CR section that clearly demonstrates our commitment to CR and its integral place in the way that we operate as a business. We are pleased to have fully achieved 58% of the challenging targets we set ourselves for the year. We will continue to work hard to further improve on this achievement in 2007/08.
For the 2007 CR report, please follow this link:
Further Information
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