Crown Estate Confident It Can Outperform Despite Brexit Turmoilby
The Crown Estate, the property company that generates income for Queen Elizabeth II, “will continue to outperform the wider market in the mid- to long-term,” Chief Executive Officer Alison Nimmo said in a briefing.
The U.K.’s vote last week to exit the European Union will cause an “extended period of uncertainty and volatility,” the London-based firm said. The result prompted the resignation of Prime Minister David Cameron, who said it would tip the country into recession.
The value of the company’s real estate, which includes most of the St. James’s district in London’s West End, rose 9.7 percent to a record 12 billion pounds ($15.8 billion) in the 12 months through March, the company said in a statement on Tuesday. Total return, comprised of rental income and value increases, from its properties, wind farms and other assets was about 17 percent The company has been a net seller of property over the past 18 months.
Office rents in the West End remained at a record high of 115 pounds per square foot for a fifth consecutive quarter in the three months through March on robust demand for new and refurbished offices, according to broker Knight Frank LLP. The Crown Estate will reach its target of completing 50 percent of all new office space in the district in 2016, Nimmo said at the briefing.
The Crown Estate oversees real estate surrendered in 1760 by the monarchy in exchange for annual payments. The U.K. Treasury collects its earnings and provides Queen Elizabeth with a percentage.