18 September 2020

Chief Executive’s review

I joined The Crown Estate in December 2019 and in the short period since, I have come to understand what a remarkable business it is.

During the 2019/20 financial year, many of our real estate markets were already facing long term structural challenges, which have now been accelerated as a result of COVID-19. Against this backdrop, and the ongoing economic uncertainty, we have delivered a net revenue profit of £345.0 million (a growth of 0.4%), reflecting the underlying strength of our portfolio and the active approach of our team.

“As we look ahead, we are under no illusions about the challenges we face. However, we will build on our solid foundations, strengthened over hundreds of years, to ensure we deliver value in the broadest sense for our customers, stakeholders, partners and the nation.”

Our overall performance was ahead of the market with an annual total return of 1.4% against a bespoke benchmark of 0.5%, delivering our 12th year of consecutive outperformance. These results have been driven primarily by disposals and re-gears in our Central London portfolio and the continued growth in fully operational offshore wind farms.

The value of our overall portfolio decreased by 1.2% to £13.4 billion. This is principally as a result of a revaluation loss of £552.5 million or 17.0% in the Regional portfolio, reflecting the challenging operational markets faced by our retail customers during the year.

Before COVID-19, as a new CEO coming in, we began a deep review of our purpose and strategy, to make sure we are well positioned for the future. This is now more important than ever. This review includes how we grow financially, and also how we create social and environmental value, making a positive impact across the many communities where we operate. As part of this, we are looking at how we actively respond to the long term trends facing us, such as climate change and technology, as well as immediate considerations like the future of physical retail.

Let me conclude by saying that during its long and vast history, The Crown Estate has witnessed and experienced many major societal and economic changes. As we write its next chapter I am both humbled and excited by the opportunity we have before us. Although there is uncertainty ahead, we will draw on our underlying strength to evolve into a purposeful, agile and dynamic business that is fit for the future.

Dan Labbad
Chief Executive

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