Crown Estate profit up by 5.2%

The Crown Estate has today announced another record financial result, posting a profit of £252.6 million, which was up by 5.2% on last year and the organisation’s capital value rose by over 7% to more than £8.6 billion.

For the fifth consecutive year The Crown Estate outperformed its bespoke industry benchmark, recording a total return of 11.3% against the IPD (Investment Property Databank) target of 9.9%.

After an increase of 7.2% its total property value has now exceeded the £8 billion mark for the first time, totalling £8.1 billion. Third party funds under management at the end of the financial year totalled £610 million.

Sir Stuart Hampson, Chairman of The Crown Estate said: “We’re proud that another record Crown Estate performance.”

Alison Nimmo CBE, Chief Executive of The Crown Estate added: “Today’s results are a ringing endorsement of the quality of our portfolio, our active asset management and our highly skilled team. Despite challenging market conditions, we are well placed as a business with a clear vision and investment strategy, great partners and a strong balance sheet.”

Urban Portfolio: The urban portfolio had another strong year, outperforming its industry benchmark by 6.5% and achieving a total return of 10.6% on a portfolio of assets now worth £5.9 billion. The Crown Estate made major progress in central London. Since year-end it has delivered the £100 million St James’s Gateway scheme, a joint venture with Healthcare of Ontario Pension Plan (HOOPP) and established a £320 million partnership with Oxford Properties to deliver its landmark St James’s Market project. On behalf of its partnership with Norges Bank Investment Management, The Crown Estate secured a range of world class retailers for Regent Street, including J Crew and Watches of Switzerland, and made significant progress on the next generation of redevelopment projects. It also continued to promote its Recruit West End programme, which this year brokered 118 jobs for young Londoners. Outside London, the regional portfolio, now valued at £1.6 billion, delivered a strong total return outperformance through an active approach to asset management and strategic investment in new assets.

Energy and Infrastructure: The value of the portfolio rose by 8.2% in 2012/13, reaching £564 million, and delivered a total return of 10.6%. Over the year, the energy and infrastructure team continued to facilitate growth in the offshore wind industry with a number of initiatives to drive down costs and encourage investment in the sector, including a comprehensive study into cost reduction released last May. This year has seen an extra 1GW of offshore wind power come on stream, with approximately 300 new turbines erected offshore. The success of the wind energy industry this year meant that, during one 24 hour period in March, enough electricity was produced by wind technology to power 40% of homes in the UK. Across the portfolio, The Crown Estate worked to support local communities, including brokering an agreement to unlock BT’s largest ever sub-sea engineering project to bring high-speed broadband to Highlands and Islands communities in Scotland.

Rural and Coastal portfolio: During a successful year, the portfolio delivered a total return of 13.3% and increased in value by 3.2% to £1.4 billion. The Crown Estate renewed its focus on its strategic land pipeline capable of delivering 10,000 new homes over the next 25 years. During the year, and since year-end, planning applications have been approved for approximately 1,800 new homes, including major schemes at Taunton and Nottinghamshire. The Crown Estate continued to enhance the portfolio through investment, including £250,000 into new mountain bike trails at its Glenlivet Estate in Scotland and supporting coastal communities through its £1 million Marine Stewardship Fund.

The Crown Estate’s results were for the first time published in an Integrated Annual Report, offering a concise overview of how it creates value in the short, medium and long term and demonstrating how sustainability is embedded within its business model. As a member of the International Integrated Reporting Council’s pilot programme, The Crown Estate will continue to develop this approach over the next few years.