Estate Benefits; the Crown Estate Owns the Most Valuable Houses in London, but until Recently It Was Run like a Gentleman's Club. Now There's a Sharp New Team in Control Who Are Determined to Exploit This Billion-Pound Property Goldmine. and They're Starting by Revamping Regent Street

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As the crow flies, only 15 miles separate them. In terms of background, they are a million miles apart. One was educated at Downside and Cambridge, lived in a small castle overlooking the River Tay in Perthshire and sat in the House of Lords. The other went to a minor Scottish public school, attended Edinburgh University, farmed for most of his life and lives in a bungalow. Which one is in charge of a [pounds sterling]4.6 billion property empire?

It depends when you asked the question. In 1974, you would have been right in assuming that the peer of the realm - the Earl of Perth (a relative of the film producer Matthew Vaughn) - would be heading up one of the pillars of the British establishment. Thirty years later, the same institution - the Crown Estate - is still a pillar of the establishment; except the establishment has changed and now the farmer is in charge. It is just one indication of the many changes that are taking place in one of Britain's most august organisations.

Despite its name, the Crown Estate has very little to do with the Queen. Its profits are either ploughed straight back into the business or paid to the Treasury. This dates back to 1760 when George III gave up his right to any profits generated from Crown Lands in return for an annual income - the Civil List - granted to him by Parliament. Since that time, the Crown Estate has essentially been managed to benefit the government.

There is a serious amount of benefit involved.

The Crown Estate possesses some of the most expensive houses in the world including all of the properties on Kensington Palace Gardens - a tree-lined avenue so elite that security personnel guard each end. An industry insider suggests that the price for a ten-bedroom house here is somewhere between [pounds sterling]35 million and [pounds sterling]41 million.

The empire doesn't stop there. The Estate owns all of Regent Street, huge chunks of land round Regent's Park (the rule of thumb is that all the cream buildings, most of which were designed by Nash, have the Queen as their nominal landlord), as well as properties in the City (Holborn Viaduct, East Smithfield, Royal Mint Court and Farringdon).

Substantial parts of Park Lane, Piccadilly, Whitehall, St James's, Trafalgar Square, Blackheath and Richmond also belong to the Crown.

Outside London, the estate owns 276,000 acres of agricultural land (including Windsor Great Park, but not the castle) and 32,000 acres of forest. Its assets also include the seabed within a 12 nautical-mile limit around the UK, with rights to all minerals.

The Crown Estate paid the Treasury [pounds sterling]176.9 million this year, while the Queen only received [pounds sterling]9.9 million from the Civil List. Go back to 1974 and the Crown Estate paid the Treasury [pounds sterling]5.2 million. Even taking inflation into account, an improvement of [pounds sterling]171.7 million is substantial.

What has caused such an extraordinary turnaround? The answer is that the Crown Estate has undergone a quiet revolution from the inside.

'The Crown Estate used to be an island of unaccountability, a bastion of the aristocracy,' explains Anthony Sampson, author of The Anatomy of Britain series.

It was renowned for being old-fashioned.

Having first done business with the Crown Estate 25 years ago, Roger Lewis, chairman of the Berkeley Group plc, comments, 'It used to be a little fuddy-duddy, a bit of a gentleman's club.'

One of his contemporaries agrees. 'At the top of the Crown Estate you had the great and the good. In the middle there were a bunch of civil servants and then at the bottom there was complete inertia. They were a nightmare to get a decision out of because they moved so slowly. It was like an unbelievably frustrating game of tennis - you played the ball over the net and then had to wait weeks for it to come back again. …