UK: Queen's property drops in value by £500m after rental receipts decline

[Barun]

Sept 18: Coronavirus forces Crown Estate revaluation as retailers and tenants struggle to make payments. 

In the year to date, the Crown Estate has collected 52% of rents due from its retail tenants in central London and 53% outside the capital, while the rental take from offices in central London is 88%.

Annual profits were reduced by a £12.9m bad debt provision as the group expects a further increase in the number of retailers falling into administration or adopting a company voluntary arrangement (CVA), an insolvency procedure that allows them to shut shops and renegotiate rents.

The Crown Estate is carrying out a review of its strategy, begun before the pandemic, to look at the future of physical retail, amongst other other things, Dan Labbad (CEO of Crown Estate) said. The group is looking at moving to turnover-based rents in many cases.

Demand for office space has changed as companies move to more flexible working. About 10-15% of staff have returned to their desks at the Crown Estate, and a similar number have gone back in the offices it rents out. “There’s no doubt that Covid will bring about some permanent structural shifts,” Labbad said.

Read the complete news item here. 

https://www.theguardian.com/business/2020/sep/18/queens-property-holdings-crown-estate-500m-writedown-fall-rental-receipts