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Crown Estate loses £1bn after rent and property slump
Ed Harris8 Jul 2009
The Crown Estate has seen more than £1billion wiped off the value of its assets after the slump in the property market - the first drop since 1993.
The monarchy's estate, which owns swathes of land and property, was hit after office and retail rents fell. Values dropped by 18 per cent to £6billion in the year ending 31 March. Crown Estate, which owns tracts of prime central London estate, sold £231million of assets and made £412 million of investments.
But recession and the worst banking crisis since the Thirties have hit demand for London offices, shops and restaurants. Annual rents for prime offices in Mayfair and St James's, the benchmark for the West End, fell 35 per cent since the first quarter of last year to £75 a square foot last month, according to data from commercial property company Jones Lang LaSalle. Trading conditions were made harder by December's insolvency of the music and DVD retailer Zavvi Group, which forced Crown Estate to seek a new tenant for the store in Regent Street.
Crown Estate's chief executive Roger Bright said office rents in the West End, where it is the second biggest landlord, would probably not rise until 2011. "That's going be quite tough," he said. But the Crown Estate's West End offices depreciated less than shops, offices and warehouses outside London, Mr Bright said. And he said he expected West End store rents to pick up next year, sooner than offices. "Sales generally have held up relatively well," he said.
The company will show that it has still generated a net income surplus of £226.5million for the year to 31 March, a 6.1 per cent increase on last year. Its annual report was being released today at a ceremony at Lancaster House.
Reader views (1)
They haven't 'lost' anything - the properties are still there and so, mostly , are the tenants. Typically poor reporting on buiness when the language is so important
- Peter Bench, London, 09/07/2009 10:00
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