UK - Figures posted by the £7.3bn (€8.2bn) Crown Estate - the UK joint-venture partner of choice for sovereign wealth funds (SWFs) in search of trophy assets - show that it returned £230.9m last year, £226.9m of it from its prime London portfolio.
Much of the return came from the outperformance of prime assets in London's West End, which saw capital growth of more than 4% (compared with 1.7% outside London), 5% growth in rental values and yields compressed year-on-year from 5.4% to 5%.
Urban assets account for 74% of the Estate's overall portfolio and 77% of returns.
The Estate identified a deal on prime London retail with NBIM, which manages the Norwegian Government Pension Fund Global, as a "highlight of the year".
Under the terms of the agreement, the Estate will have access to investable capital from the SWF, which now owns a 25% stake in return for a 150-year lease.
The firm - which has grown its overall assets under management by 12.4% in the year to date - said the partners shared "core values of commercialism, integrity and stewardship".
Supply constraints and a shortage of prime space continue to drive outperformance of London office, according to the report.
The Estate has three development schemes scheduled for delivery at the end of 2013, including a £100m mixed-use development with Healthcare of Ontario Pension Plan (HOOPP).
The Estate said it expected a continuation of the sluggish recovery, high inflation and falling disposable incomes over the next year, with low bond yields continuing to support prime property values.
Its medium-term assumptions are predicated on economic stagnation until around 2014, when a return to trend levels of growth and consumption will drive the retail sector outside London.
Planning remains an issue for the Estate's £1bn rural portfolio. Despite using the recession to work planning applications, it said it had failed to make progress on large strategic sites with the planning regime in flux.
"However," it said, "the market for smaller, uncomplicated development sites has been improving, and we expect to deliver a number of these to the market over the next year."
Despite suspicions from some investors that the UK wind industry is already bubbly, the Estate forecasts windfarms will drive growth within its marine portfolio and create opportunities to invest in the associated coastal infrastructure. Its wind farm holdings increased in the portfolio by 32% to £587m.
Following a trend started by Canadian pension schemes, the estate will also enter the gas and CO2 storage sectors next year.
