This has been quite a year for Royal partnerships. First there was William and Kate’s marriage, then Zara and Mike’s. Now news of another regal union, first formed in 2010, which is back in the headlines. It may not reach the pages of OK! magazine or warrant an extra Bank Holiday, but it definitely deserves commercial property coverage.
It is the story of the monarchy-owned Crown Estate and their commercial property matrimony with Norges Bank Investment Management (NBIM).
The Crown Estate owns 75% of Regent Street, undeniably a prime London retail site, after selling the other 25% to NBIM for £450m in 2010. Since the deal, they have operated together as the Regent Street Partnership.
As couples do, they have gone shopping together. Opting to avoid IKEA, they have instead visited the West End, managing to pick up £28 million of commercial property along the way. One item is 1 Maddox St, a five-storey 17,000 sq ft building, another is 4 Conduit St, a 6,000 sq ft purchase.
The Regent Street Partnership has already spent somewhere in the region of £730 million this year on regenerating Regent St to the retail Mecca it is today. A £275 million office development will be delivered in the autumn, four months ahead of schedule. A £200 million hotel with retail space is set for completion in 2012, around the same time as £16 million of improvements to Piccadilly Circus will be concluded.
The Crown Estate is one of the biggest property landlords in the UK, with holdings estimated at £7 billion. Ascot racecourse and Windsor Great Park are among its portfolio of rural and urban, residential and commercial property. Technically the Queen is the owner, although neither she nor any subsequent reigning monarch can sell any of it. It is managed independently by the Crown Estate Commissioners, who pay surplus revenues to the Treasury.
NBIM is the Central Bank of Norway, managing the Government Pension Fund of Norway, a stabilisation fund which is the world’s largest investment pool. Their relationship has led to Regent Street retail voids remaining at 0%, a figure certainly fit for a commercial property king.
