The Crown Estate has reported a record £1.1 billion in net revenue profit for the second consecutive year, thanks largely to a surge in offshore windfarm “option fees” paid by developers. However, the King’s property company has warned this windfall will soon pass, with profits expected to “normalise” from 2026.
The bumper profits were driven by payments from energy companies who secured leases to build six new offshore windfarms in January 2023. These projects—three in the North Sea and others off the coasts of Cumbria, Lancashire and North Wales—could eventually power eight million homes.
Until construction begins, the developers are required to pay annual option fees to the Crown Estate. These payments helped lift net revenue profit to a record £1.1bn in the financial year ending March 2025, matching last year’s record-breaking figure. However, the estate noted that excluding these extraordinary windfarm revenues, core profits were £366 million.
“We always knew the boost to our profits due to offshore wind leasing option fees from round four was short-term,” said Dan Labbad, chief executive of the Crown Estate. “We expect this year to be the high point for these returns before our net revenue profits normalise and move to more steady growth.”
The Crown Estate, which manages an extensive portfolio including central London property and the UK’s seabed, pays all profits to the Treasury. A portion of these profits—historically 25 per cent—is returned to the royal family in the form of the sovereign grant. This has since been reduced to 12 per cent to reflect the increase in Crown Estate earnings from offshore wind.
In the 2025-26 financial year, the royal family is set to receive £132.1 million from the sovereign grant, up from £86.3 million in previous years. This rise is based on earnings from two years ago, when the first wave of windfarm fees began to inflate the estate’s returns. The Treasury will next review the sovereign grant formula in 2026.
Elsewhere in the portfolio, the value of the Crown Estate’s central London holdings rose for the first time since the pandemic. Its West End real estate, including Regent Street, was valued at £7.1 billion—driven by strong demand for high-quality office space and a limited supply of prime real estate.
However, the estate’s overall net asset value fell by £500 million to £15 billion, largely due to a drop in the value of seabed holdings as the lucrative option fees phase out.
Despite this, Labbad said the Crown Estate remains well-positioned for the long term, highlighting a new partnership with his former employer, Lendlease, to develop major housing and innovation projects in London and Birmingham. Critics have questioned the tie-up given Lendlease’s delays on previous projects, but Labbad said the Crown Estate is well-placed to “unlock complexity at scale” in developments such as Euston, Thamesmead, and Silvertown.
“Given the housing shortage and the need for more life sciences space nationally, it’s very important these schemes come to fruition,” he added.
