Queen record profits Buckingham Palace

The value of the royal family’s portfolio has hit a new high, just as the Queen is set to receive a hefty increase in income.

From 2016-17 the Crown Estate, which includes all of the property and holdings belonging to the royal family, saw a 8.1% increase in value, reaching an overall worth of £328.8m. The portfolio is effectively run like a corporation, with investments generating profits which then go to the Treasury. 

Alison Nimmo, Chief Executive of the Crown Estate, credited “many years of disciplined market positioning” for the performance.

“For over a decade we’ve carefully timed our development pipeline, focussed on creating brilliant places in the best locations and maintained our active support of the UK’s world-leading offshore wind sector.” 

With most of its property located in London’s West End, including much of Regent Street, the Crown Estate has benefitted greatly from increasing demand for rental space in London. Over the last year, 400,000 square feet of retail and office space from the portfolio was rented out, generating £34.4m. 

The Estate has also enjoyed successes in other spheres. Its investments in offshore wind farms, for example, were seen as a major driving force for the rise in profit, generating £27.7m.

“Looking ahead, we expect returns to remain subdued, but we are confident in the underlying strength of our markets and our commitment to quality in what we deliver,” Nimmo continued. “Following a record year of capital activity, this year will see the launch of two major retail schemes at Rushden and in Oxford, and the continued preparation of the next phase of our development pipeline in central London that will form the backbone of our long-term performance.”

While this is fantastic news for the Treasury, it also comes at a time when the Queen is set to receive a bonus to her government income, the ‘Sovereign Grant’. 

Last year, it was announced that the royal family’s share of the Crown Estate’s profits, which go towards the Sovereign Grant, would increase from 15% to 25% in order to pay for an overdue renovation of Buckingham Palace. The wing by wing renovation, which will focus on the property’s severely outdated piping, electrical wiring and boilers, is set to cost around £369m.

Stephen Jury, spokesperson for Plentific said, “Whilst the price for upgrading seems steep, these refurbishments are essential to the safety of the building and will allow Buckingham Palace to continue to attract tourism and generate revenue.”

Indeed, £139m of the bill will be paid for by increased efficiency resulting from the renovation, along with an increase in the number of days when the palace will be open to tourists.

Despite this, initial reactions to the costs were mixed. Plentific’s 2016 research found that two out of three UK taxpayers were not happy with the renovation cost, and a petition to have the Queen pay for the refurbishments out of own pocket quickly gained over 140,000 signatures. 

“In 2016-17 the sovereign grant equated to a cost of 65 pence per person in the United Kingdom — the price of a first-class stamp,” said Alan Reid, Keeper of the Privy Purse.

“When you consider that against what the Queen does and represents for this country, I believe it represents excellent value for money.”