Queen’s property empire drops half a billion to £13.4bn because of coronavirus

The Queen will pay the Treasury in instalments this year after her land and property empire fell in value by £552.5million because of a sudden drop in rental income from shops hit by coronavirus lockdown.

Regents Street and St James’s in London as well as retail parks across the country are included in the Crown Estates. 

It has been revalued at £13.4billion in annual results published today – after a tough year for retail sales, reported the Guardian. 

All profits are handed to the Treasury which then passes 25 per cent of the funds back to the royal family in the form of the Sovereign Grant after a two-year period.

But the difficult financial year has left the Crown Estate making staggered payments to the Treasury to ensure it has enough revenue reserves to support itself.  

The Queen’s crown estates have been revalued at £13.4billion in annual results published today – after a tough year for retail sales. Pictured, Queen Elizabeth on July 17

The Crown Estate’s annual report reads: ‘The current economic and market disruption has led us to take the precaution, with the agreement of the Treasury, of implementing a staged process for the payment of the whole of our net revenue profit. 

‘As we cannot draw on our capital account to cover operating expenses, this step has been taken to ensure that we have sufficient revenue reserves given the current reduction in rental receipts. 

‘Following a careful review of the viability and going concern position, of the £345.0 million net revenue profit, a first payment of £87.0 million was made to the Treasury on 21 July 2020, with further payments to follow as trading conditions develop. 

‘Our resilient capital structure, established to operate in perpetuity and with no debt, gives us confidence that we can continue to invest for the long term.’

Figures also showed a profit of £345million in the year up until March 31, when the UK went into a nationwide lockdown to try to stem the spread of Covid-19.

The early profit, which was up 0.4 per cent from last year, suggested the value of the estates would have risen if not for the impact of coronavirus.

Regents Street and St James’s in London as well as retail parks across the country are included in the Crown Estates. Pictured, Regents Street in London in March

The Crown Estates has so far collected 52 per cent of rents from retail tenants in central London and 53 per cent outside the capital this year.

The rental income from officers in central London in 88 per cent. 

Dan Labbad, the Crown Estate’s chief executive, said the country’s retail parks were slowly recovering.

‘We’ve seen most of our retail and food and beverage come back and want to open where they are still trading.

The St James’s area of Westminster is also included within the Crown Estates. Rental incomes have fallen as footfall stagnated amid lockdown

‘There have been a number of CVAs [company voluntary arrangements] and administrations,’ he said. 

Company Voluntary Arrangements involve coming to an agreement over how best to settle debts. This could include paying only a proportion of the amount that a company owes to creditors. 

Mr Labbad said London’s West End was ‘slowly filling up again’ following the Government’s successful Eat Out To Help Out scheme. 

MailOnline has contacted the Treasury for comment.