Estate returns double IPD benchmark halfway through 10-year restructuring

The Crown Estate’s core commercial property portfolio has achieved its best-ever annual performance, beating the Investment Property Databank Benchmark by more than 1,400 basis points.

The commercial property holdings generated a total return of 30.6% in the year to 31 March, nearly double the IPD benchmark of 16.3%. They are now valued at £4.75bn and account for 70% of the Crown Estate’s entire £6.57bn estate, which also includes residential, marine and rural assets and the Windsor Estate.

The biggest asset is Regent Street in London’s West End, which rose in value from £1.4bn to £1.7bn.

The Crown Estate’s annual report, which was published yesterday, showed that the entire estate rose by 15.6% in value and generated a return of 25.7% – also well above the IPD benchmark.

‘This outperformance is driven by our sector weightings, in particular our high exposure to central London offices,’ said chief executive Roger Bright. ‘Strong contributions have also come from our residential and rural portfolios, and retail rents have been driven forwards on Regent Street on the back of active asset management.’

The net revenue surplus, which is paid by the Crown Estate to the Treasury, rose 4.9% to £200.1m. The capital value of the estate increased by 19.4% to £7.1bn, which is the £6.57bn property estate and around £500m of cash.

Retailers opening on Regent Street this financial year are Armani Exchange, H&M, Nokia, Banana Republic and National Geographic.

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