Understandably, chief executive Roger Bright says he was "quietly pleased" with the results, attributing the strong performance across all areas to the portfolio's "diversity, scale and quality." Rental income also saw a hike, up 2.5%, to euro 346.26 million ($421.6 million) driven principally by new retail lettings in London's Regent Street, which is now valued at more than euro 1.45 billion ($1.77 billion).
Bright reports that a major shake-up of the portfolio to reduce its exposure to urban offices in favor of other sectors, in particular out-of-town retailing, would continue apace. Knight Frank has been instructed to sell around euro 264.95 million ($217.6 million) of offices, while CBRE is advising on retail opportunities. Offices currently represent 40% of the portfolio by value.
"We are looking at how we can work our assets most effectively to optimize performance," he states. "While we are restricted by statute to investment in the UK only, we are considering joint-venture partnerships and swap deals along the lines of Land Securities' recent swap of its industrial holdings for Slough's retail."
Bright went on to report progress on its euro 725.26-million ($883.2-million) plans to redevelop a section of its Regent Street estate in Central London. The Estate is engaged in four major refurbishment projects along the historic street, the largest of which will cover the Tower Records and Café Royal blocks on Regent Street, plus Glasshouse Street, Air Street, Brewer Street and Sherwood Street.
Crown Estate has one of the most unusual property portfolios in the UK. In addition to a large commercial and residential portfolio, it also owns most of Britain's foreshore and a large proportion of moorings and marinas. The value of this coastal estate increased by 6%. And it owns a number of windfarms and farmland.
The results reinforce the continued strong performance of Crown Estate, consistently one of the best performing developer/investors in the UK. But its existence is a quirk of history. King George III, who needed to fund foreign wars, handed over his entire estate to the government in 1760. So the state effectively owns the freeholds and manages the estate, but any surplus revenue goes to the Treasury. The Queen is then paid an income from the government through the Civil List to finance her duties and the running of the Royal Household.
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