Regent Street landlord, the Crown Estate, is implementing measures to conserve cash as it confronts the challenges presented by the ongoing pandemic. The company, which oversees a property portfolio valued at over £13 billion on behalf of the Queen, has postponed its annual payment to the UK Treasury due to a decline in rent payments.

What distinguishes the Crown Estate from other property firms is its ownership of a significant amount of property on behalf of the Queen. A portion of its income is allocated to the UK Treasury, with 25% serving as the “sovereign grant” for the Queen.

According to sources, the company reported a net income of £345 million in the year ending March 2020, reflecting a 0.4% increase compared to the previous year. This notable achievement was primarily driven by property disposals and lease negotiations conducted in central London. However, the challenging retail environment led to a revaluation that caused the portfolio’s value to decrease by 1.2% to £13.4 billion.

Despite owning some of the most valuable properties in the UK, including significant portions of London’s West End, the Crown Estate will delay returning its income to the state, and ultimately the Queen, this year. It has already made a payment of £87 million in July and will only make further payments as trading conditions develop.

To tackle the impact of the pandemic, the company has set aside £12.9 million to cover income it does not anticipate receiving due to disruptions caused by Covid-19. While most office tenants have fulfilled their rent obligations, almost half of the rent owed by retail tenants has remained outstanding since the end of March.

CEO Dan Labbad has emphasized the Crown Estate’s commitment to working closely with its tenants on an individual basis to provide support and modify leasing arrangements as necessary. Labbad also highlighted that there is currently limited demand for new tenants to enter the portfolio, underscoring the significance of resilience during these testing times. Although he did not provide specific forecasts, Labbad acknowledged that property income will see a substantial decrease. However, thanks to the estate’s lack of debt and its diversified portfolio, he remains confident that it will weather the challenges posed by the pandemic.

The decision by the Crown Estate to conserve cash reflects the trying circumstances faced by major landlords during the Covid-19 crisis. By prioritizing resilience and working closely with tenants to address leasing arrangements, the company aims to safeguard its portfolio and navigate the uncertainties of the retail market.

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