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A private estate established in 1337 which funds the public, charitable and private activities of the Prince of Wales and his family.

Message from the Secretary and Keeper of the Records

Taking our lead from His Royal Highness The Prince of Wales, sustainability has long been at the heart of how the Duchy of Cornwall operates.

With the Duchy’s 2014/15 annual report, we have taken a first step towards ensuring that our sustainable stewardship is put in context and articulated clearly. The publication reflects the Duchy’s transition to Integrated Reporting – a framework which in future years will enable us to describe more clearly what sustainable stewardship in all its forms means to the Duchy.

There have been several developments in our reporting this year. We have revisited our mission statement, set out our business model and strategic objectives, and with our stakeholders have undertaken a review of issues that matter most to the Duchy. In future years we will report on a broader spectrum of risk and the range of resources and relationships which sustain the Duchy and help us meet our objectives. We are investigating material key performance indicators to support this work.

We will also be focusing effort over the next two years to understand better the impact of our tenants on the natural capital within their care, particularly soil and water. Climate change and the state of the rural economy are equally important issues for the Duchy, and for its agricultural tenants. The spread of tree diseases is of particular concern, with potentially far-reaching effects on the extensive woodlands owned by the Duchy, and on the wider landscape.

The most significant event for the Duchy in 2014/15 was the purchase of the Port Eliot southern estate. At over 700 hectares this is the most substantial purchase of farmland in Cornwall since The Prince of Wales became Duke of Cornwall in 1952. It is a significant acquisition which retains an important land holding intact, builds on existing Duchy holdings and enables the Duchy estate to further support farming in the South West. Elsewhere, the Duchy had hoped to make an additional strategic purchase in commercial property, but this has not yet been possible.

The Duchy has successfully recruited for key posts at Poundbury and on the Isles of Scilly this year to ensure continuity of staffing. A staff consultative committee is being established, and consideration is being given to a tenants’ survey so that the Duchy can further develop the service and support it gives. The world-class expertise available to the Duchy has been extended with the appointment as advisers to The Prince’s Council of Sir Michael Hintze (investment management), Henry Richards (land development) and Kit Martin (historic buildings). 

It has been particularly pleasing to let a progression farm to new tenants during the year, after a previous starter farm letting in 2013/14, helping very able younger farmers to establish themselves.

The Duchy continues to meet its main function of providing an income to the heir to the throne while ensuring that the capital value of the estate is maintained for future beneficiaries. There is a balance to be struck in the investment decisions made, both in the short and long term. 2014/15 has been no exception: the distributable surplus has risen by 1.7% and capital values by 3.9% – mirroring performance over the last two decades which have seen sustainable growth in both revenue and capital values. After several years of significant increase in agricultural land values, this year it was a strong performance from the commercial property portfolio which was the main factor behind capital growth.

Investment in the estate has continued to grow, reaching a record £15.1million as important development projects reach their peak at Poundbury or get underway at Nansledan. Poundbury has already provided considerable social and economic benefit to the region and it is envisaged that this will be replicated at Nansledan.

Over the next few years the Duchy aims to increase the revenue surplus at least in line with inflation. Given the economic difficulties facing the agricultural sector and the continuing need for forward-funded infrastructure at the Duchy’s key development sites, meeting this target will be challenging. Further diversification within the portfolio will be sought where possible to underpin revenue growth.

The Duchy will continue with its programme of property renovations and improvements. Capital budgets indicate that there will be record capital expenditure during 2015/16, particularly at Queen Mother Square Poundbury as it nears completion. Construction of a Waitrose store at Truro will commence.

“I thank all the staff who have worked so hard to ensure the Duchy has had such a successful year on so many fronts. The proud history and values of the Duchy, set out in this report, stand us in good stead.”

Alastair Martin Secretary and Keeper of the Records

 

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