The Crown Estate, the property company that generates income for Queen Elizabeth II, plans to spend 400 million pounds ($630 million) redeveloping an area near London’s Piccadilly Circus.
The St. James’s Market project will create 245,000 square feet (22,760 square meters) of offices, shops and restaurants on Regent Street and Haymarket as well as a new public square, the company said in an e-mailed statement today. Crown Estate said it would seek planning approval for the development, with construction set to start late next year.
“The regeneration of St. James’s Market is an opportunity to revive a neglected location,” said James Cooksey, Crown Estate’s head of the district.
The project is the second part of a 500 million-pound revival of the St. James’s neighborhood, which vies with Hong Kong as the world’s most expensive office market. It follows a 1 billion-pound revamp that made Regent Street one of London’s top shopping areas and helped persuade Norway’s sovereign-wealth fund to buy a 25 percent stake for 443 million pounds.
The London-based company is trying to attract higher-paying retailers and office tenants to the St. James’s leg of Regent Street, which wasn’t included in the deal with Norway. Crown Estate owns half of the real estate in St. James’s. The first phase of the renovation, the Gateway project near Piccadilly Circus, involved a 100 million-pound venture with Healthcare of Ontario Pension Plan.
Queen Elizabeth II
While the Crown Estate is one of Queen Elizabeth II’s “hereditary possessions,” she doesn’t own the company as private property. The U.K. treasury collects its earnings and, under the Sovereign Grant Act approved by lawmakers last year, provides the monarch with 15 percent of the company’s annual earnings. Profit was 230.9 million pounds for the fiscal year ended March 31, 2011.
As well as the Regent Street shops, the Crown Estate also owns shopping centers, golf courses, Ascot Racecourse, parks, farms, and “virtually all the U.K.’s seabed” out to the 12-mile nautical limit, according to documents posted on the company’s website.
Farmers sold hay and straw at St. James’s Market for 200 years until it made way for a development of Regent Street in the early 19th century. As part of the project announced today, Crown Estate will provide 40,000 square feet of new residential space in other locations in St. James’s.
Carlyle Group LP, a Washington-based private-equity firm, last month bought a property next to St. James’s Palace in central London from the Crown Estate for 36.5 million pounds and said it plans to build luxury apartments.