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Britain's queen set for 5% raise on back of bumper real estate profits

By Laura Smith-Spark, CNN
updated 2:22 PM EDT, Thu June 27, 2013
STORY HIGHLIGHTS
  • NEW: Spending last year includes $1 million for work on apartment for William, Catherine
  • The Crown Estate manages a huge property portfolio for Queen Elizabeth II
  • Its profits for the past year are up by 5.2% from the previous year
  • The profits go into the public purse, and the queen gets a grant equal to 15% of profits

London (CNN) -- Britain's Queen Elizabeth II can expect a sweet 5% raise next year, thanks in large part to record profits from real estate.

The Crown Estate, a public body that manages property for the monarch, posted a record profit of 252.6 million British pounds ($387.2 million) for the last financial year -- up by 5.2% from last year.

The good news for the nation is that all the profit from the estate is paid into the public coffers.

Read: Queen Elizabeth II marks 60th anniversary of coronation

The queen is then paid a grant each year by the Treasury equal to 15% of the profit from two years before.

Queen joyous at Royal Ascot win
Queen Elizabeth celebrates 60 year reign

That means the monarch, who celebrated 60 years on the throne last year, will receive income of nearly 38 million pounds next year, according to the estate's annual report, released Thursday.

The Crown Estate is owned by the queen as monarch but is not her private property, meaning she has no direct control over it. The total portfolio is now valued at 8.1 billion pounds (nearly $12.4 billion).

The estate's revenue comes from everything from chic central London stores to offshore wind farms and rural housing developments.

Even U.S. retailer J. Crew helped swell its profits in the last year -- it's one of a number of international brands to open a new store on Regent Street, in the heart of London. Apple, Banana Republic and Anthropologie are three more of the big American firms to find a home on the Crown Estate-owned street.

As for energy production, about 300 new offshore wind turbines came on line over the year.

The estate manages almost all of Britain's coastal waters and some of its finest parkland, including Windsor Great Park, by Windsor Castle.

It is also one of the country's largest rural landowners, holding about 356,000 acres of agricultural land and forests, together with mineral resources, homes and commercial property.

Read: Who can inherit the British throne?

In the past year, it put 250,000 pounds into creating new mountain bike trails at the Glenlivet estate in Scotland and invested 1 million pounds to support coastal communities and care of the marine environment.

According to its website, the estate's vision "is to be the UK's most respected property business because of the way in which we manage this portfolio of assets on behalf of the nation."

Overspending

The queen's grant for 2012-2013 totaled 31 million pounds, jumping to just over 36 million pounds for the current financial year.

She spent 2.3 million pounds more than the allotted grant last year -- when she was "exceptionally busy" with travel and events to mark the diamond jubilee -- the annual report said. The extra cost was met from a reserve fund.

The queen had 288 public engagements in the year to March 31, 2013, and her husband, Prince Philip, had 275, the report said. The queen didn't travel abroad in the last financial year, but other members of the royal family, including Princes William and Harry, undertook 30 foreign engagements on her behalf.

Spending last year on royal properties included 700,000 pounds (just over $1 million) so far on the refurbishment of an apartment at Kensington Palace for William and his wife, Catherine, who are expecting their first child in July.

Work on the apartment, which was built to the designs of Sir Christopher Wren, architect of London's landmark St. Paul's Cathedral, is due to be completed this fall.

The "Sovereign Grant" came into effect in April of last year, after the passage of new legislation that consolidated public funding for the monarch's official duties and royal palaces in return for the profits from the Crown Estate.

The queen has her own private estate, which includes Balmoral, in Scotland, and Sandringham, her country retreat in Norfolk.

The Crown Estate's record profits will be welcome news for the Treasury, as the government struggles to bring the nation's debt and spending under control.

Chancellor of the Exchequer George Osborne announced more cuts to public spending Wednesday in his 2013 Spending Review.

CNN's Susannah Palk and Max Foster contributed to this report.

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