Property magnate Queen Elizabeth II outperforms market index
Property managers typically hold portfolios exposed to the defensiveness of ‘prime real estate’ in uncertain economic times – and the same strategy has worked handsomely for Great Britain’s most ‘upmarket’ property owner – the Queen.
Elizabeth II has a portfolio well diversified beyond her London pad, Buckingham Palace in London’s west.
Indeed, the Palace is just one part of her UK property holdings – in a real estate company Henderson Global Investors’ Ainslie McLennan calls “massive” – stretching from Regent Street, between London’s West End and Mayfair, to most of the United Kingdom coast.
For the first time over the year to March her property holdings, in the Crown Estate, became worth more than £8bn.
In the year to 31 March the Crown Estate’s value grew by 11%, and earned a net profit of £240.2m, some 4% higher than the £231m of the previous year.
McLennan praises the monarch’s property investing acumen: “This is not at all bad in a property market that has had the trend of lower capital values since the middle of 2011. The performance can be largely attributed to the super-prime nature of the Monarch’s assets.”
The overall portfolio Her Majesty owns comfortably beat the Investment Property Databank (IPD) annual March benchmark index by 10.4 percentage points, by making a total return for the 12 months of 16.8%.
And unlike many landlords, ‘QEII’ is not satisfied just to let her property deteriorate, as long as it has tenants.
At the southern end of Regent Street, for example, a £400m development is planned, while a similar upgrade program in the leafy St James’s suburb – home to many of London’s hedge funds – is costing £500m.
Half the UK’s beaches and almost all its seabed also belongs to the Queen. She even uses the sea for commercial gain, as it is home to windfarms generating about 1.5% of the UK’s electricity.