Coronavirus: The Crown Estate warns COVID-19 will hit value of profits and property | Business News

The Crown Estate has said it expects the value of its profits and property to be badly affected by the COVID-19 pandemic.

The news comes as the estate, which includes London’s Regent Street, the Windsor Estate, retail parks and rights to various seabeds, reported a profit of £345m during the 12 months ending 31 March.

But the value of the Queen’s land and property decreased by 1.2% to £13.4bn, mostly as a result of a £552.5m (17%) write down of its regional portfolio due to the challenging retail market, including falling rental values.

Dan Labbad, chief executive of The Crown Estate, said many of the organisation’s real estate markets were already “facing long term structural challenges which have now been accelerated as a result of COVID-19”.

Mr Labbard said the estate was “under no illusions about the challenges we face”.

“Whilst it is too early to accurately forecast our performance for next year, we do expect our net revenue profit and property valuations to be significantly down.

“However, our resilient structure, established to operate in perpetuity and with no debt, coupled with our diverse portfolio, provides us with the means to navigate this current crisis, while continuing to invest for the long term.”

The Crown Estate said it had focused on supporting businesses where it can make the greatest difference, for example smaller, independent businesses who are facing particular challenges.

It added: “The current economic and market disruption has led The Crown Estate to take the precaution, with the agreement of the Treasury, of implementing a staged process for the payment of the whole of its net revenue profit for the year 2019/20.”

The Crown Estate would usually pass all its profits to the Treasury, which passes 25% to the Queen through the sovereign grant.

“As it cannot draw on its capital account to cover operating expenses, this step has been taken to ensure that it has sufficient revenue reserves given the current reduction in rental receipts,” the estate added.

“Of the £345m net revenue profit, a first payment of £87m was made to the Treasury on 21 July 2020, with further payments to follow as trading conditions develop.”

Source Article