The Crown Estate is one of the key landlords in central London’s retail sector and it said this week that yearly net profits more than doubled to a record £1.1 billion.

That said, its high-end retail property portfolio had little to do with the sparkling performance. The Crown Estate is a hugely diversified property giant and much of the gain was down to increasing efforts in its drive to net zero, underpinned by its expanding offshore wind projects.

But any profit’s good profit and the owner of 10 million sq ft of property across Regent Street and St James’s in London’s West End saw earnings rise by £658 million in the last financial year from £442.6 million a year earlier.

The £15.5 billion estate plays a significant role in British royal finances having once been owned by the monarchy. But today it both funds the institution and also provides big revenues to the British state. 

But there are suggestions of better news for retail. While it expects a slowdown in earnings from green projects, it noted that underlying profits would continue to grow “thanks to a recovery in its commercial property holding following the hit from the Covid-19 pandemic”. 

And chief executive Dan Labbad said there were “signs that property valuations may be approaching the bottom of the cycle” and would start to recover, with rents on stores and offices “already showing growth”.

That’s perhaps unsurprising given the flagship locations in which its properties are situated. There’s no denying that key shopping thoroughfares like Regent Street have seen continued demand from some of the biggest names in global fashion.

In its London portfolio, the estate said there was “returning demand for office space” and like other big landlords the value of its holdings was hurt by rising interest rates, dipping £443.3 million to £8.4 billion. 

That office space demand may not be directly relevant to retail, but it’s all part of the general process that gets shoppers back into the West End of London. The significant spend by office workers during lunch breaks and after work had a major impact pre-pandemic.

Also positive for retail was the fact that more than 60 new retail leases were completed in the period as rents rose an average of 4% above estimated values.

It also noted that footfall is still down 15% on pre-pandemic levels, “impacted by the cost-of-living challenges and the end of tax-free shopping for non-EU tourists”. We’ve heard from a number of reliable sources that those shoppers who are venturing into physical destinations are spending more per head. But the tourist issue remains a major one for the West End.
 
Revenue was “stable” across the Regional business (outside of London and Rural portfolios) at £104.8 million, compared to £105.5 million last year, “supported by a stronger than expected performance across the retail park sector”. Vacancy rates here increased slightly to 8.1%, up from 7.5% in 2022/23.