Crown Estate returns to Treasury fall by almost £500 million amid slump in profits
The Crown Estate’s profits fell last year due to a smaller boost from offshore wind, resulting in the amount of money transferred to the Treasury more than halving.
The latest annual figures from The Crown Estate, which oversees the royal family’s land and property holdings, revealed operating profits fell to £1.2bn in March, compared to £1.4bn last year.
The decline is primarily linked to offshore wind, as the previous increase in fees associated with the offshore wind option has disappeared and projects are now starting construction.
Earnings had reached record levels in the previous two years, thanks to option fees (payments companies make to reserve part of the seabed to build wind turbines).
The business owns large tracts of land across the country, as well as much of the seabed and coastline around England, Wales and Northern Ireland.
The Crown Estate also revealed revenue account profits fell to £487 million from £1.1 billion the previous year.
This decreasing profit figure also reflects the amount the organization returned to the Treasury during the year to support public expenditures.
Meanwhile, the value of The Crown Estate’s assets rose significantly last year, driven by a recovery in property values.
Its net asset value rose to £16.7bn this year, compared to £15bn the previous year.
The group also reported that operating profits from its marine operation rose to £175 million, excluding the impact of wind farm option fees.
It was stated that favorable wind conditions, new offshore capacity and the expansion in different activities in the sector increased this.
Elsewhere, profits from property and development activities rose from £242 million to £258 million, thanks to the strength of the West End.
The update comes after The Crown Estate confirmed plans to step up investment after the Government last year gave it new powers giving it greater flexibility in how it invests money.
As a result, it plans to invest up to £5bn over the next decade in renewable energy, housing, science and innovation.
Dan Labbad, chief executive of The Crown Estate, said: “These results demonstrate both the strength of our core business and the importance of taking a long-term approach to managing national assets.
“We have delivered strong growth for the country in recent years and invested in areas of national importance such as renewable energy, housing, science and innovation.”
