Queen’s Paycheck Gets Lift From Crown Estate’s Wind-Farms
Queen Elizabeth II, who celebrated 60 years on the British throne earlier this month, may see her income rise 16 percent after lawmakers changed the way royal finances are calculated and the Crown Estate reported record earnings today.
The monarch will be entitled to 36 million pounds ($56 million) for the fiscal year through March 2014, up from 31 million pounds for the current year. Crown Estate’s profit grew by 4 percent to 240.2 million pounds in fiscal 2012 on rising revenue from land leased for offshore wind parks.
The Sovereign Grant covers expenses incurred by the Queen in her duties as head of state and is pegged at 15 percent of profit generated two years earlier by Crown Estate, which manages the real estate surrendered by the monarchy in 1760. The measure, adopted last year, simplified grants previously made by the Treasury and other government departments.
“They’re a landmark set of results,” Crown Estate Chief Executive Officer Alison Nimmo said in interview at the corporation’s office off Regent Street in central London. The 48-year-old joined in January after overseeing the design, construction of most venues for the London 2012 Olympic Games and devising plans for their use after the event.
Profit was boosted by a 17 percent rise in revenue at the marine estate, which leases sites used for offshore wind farms. The marine estate’s value climbed by 23 percent in fiscal 2012.
The Crown Estate owns and manages the seabed around Britain extending to 12 nautical miles offshore. It plans to invest 200 million pounds to establish offshore sites for operators to install wind turbines.
The company has offered sites for lease since 2000 and the parks in operation currently generate 1.5 percent of the U.K.’s electricity production. That will double next year as more sites become operational, lifting income. Crown Estate also oversees 36 sites across the U.K. for tidal or wave-power generation, Nimmo said.
“We will not allow revenues from offshore wind to lead to a disproportionate rise in revenues to the royal household,” Chancellor of the Exchequer George Osborne told lawmakers last year when he presented the sovereign grant bill. The size of the payment is subject to the same kind of scrutiny as government departments and is supervised by Royal Trustees, who include the prime minister and chancellor of the exchequer.
The Queen’s other sources of income are the estates and assets owned by the Duchy of Lancaster as well as her own privately owned estates, Balmoral in Scotland and Sandringham in eastern England. The monarch owns the royal palaces, most of the royal art collection and the crown jewels on behalf of the nation and therefore is prohibited from selling them for her personal gain.
Nimmo replaced Roger Bright, who generated 2 billion pounds of income for the Treasury and doubled the value of the estate during his 10 years in charge.
Crown Estate is also the majority owner of Regent Street in central London, half of the land in the St. James’s district in the British capital as well as shopping centers across the U.K., golf courses, Ascot Racecourse and farms. It is prohibited from borrowing and may only invest in real estate or U.K. government bonds.
The estate’s assets appreciated by 11 percent to 8.1 billion pounds in fiscal 2012, it reported today.
Nimmo is proceeding with the next phases of a 1 billion- pound project to revamp Regent Street. Work done so far has already transformed it into one of the U.K.’s premier shopping strips and persuaded Norway’s sovereign wealth fund to acquire a 25 percent stake in the street for 443 million pounds.
Earlier this month, Crown Estate broke ground on 200 million pounds of projects on Regent Street that will deliver 270,000 square feet (25,080 square meters) of new stores with offices on the upper floors.
The 300 million-pound Quadrant 3 project, which was completed in November, is now 70 percent leased after attracting tenants including former U.S. Vice President Al Gore’s Generation Investment Management.
The proceeds from the sale of the stake in Regent Street will finance the redevelopment of the shopping strip and a 500 million-pound program for the St. James’s neighborhood. It has also financed acquisitions to improve the balance between assets owned outside London.
Crown Estate acquired shopping parks in Milton Keynes and Swansea in fiscal 2012, lifting the value of its non-London retail real estate above 1 billion pounds for the first time.
“We have a pretty good balance across asset classes and geographically,” Nimmo said. She added that her initial full year in charge of the corporation will involve “consolidating” the portfolio and disposing of assets in locations, including the City of London financial district.
To contact the reporter on this story: Simon Packard in London at firstname.lastname@example.org.