An increase in commercial and leisure activity is helping to boost incomes on lowland British estates, according to new figures from Savills’ 2005 estate benchmarking survey.
But agricultural activity and residential property still rank as the biggest earners, according to the survey, which covered almost 300,000ha (740,000 acres).
Michael Horton, head of estate management at Savills, said: “Pressure on residential incomes, stagnating income from agricultural sources and fixed costs rising ahead of inflation have slowed the rate of growth of estate net incomes.
“However, where estates have diversified into commercial and leisure enterprises the rewards have in many cases been significant, although location is often the key to success.”
Commercial and leisure sectors accounted for almost a fifth of total gross income, up 5% on last year’s contribution.
But on some estates that figure climbed even higher, totaling 32% of gross income with agriculture contributing only 18%.
Across the whole survey, commercial income alone accounted for 14% of gross income, the equivalent of £47/ha (£19/acre).
Average office rents increased over 10% to £9/sq ft, with rents in the retail sector rising even more sharply by 15%. However, rents for industrial space slipped to £3/sq ft.
Income from agriculture remained flat at about £124/ha (£50/acre), while let residential property made up a static 37% of gross income.
In terms of capital growth, let housing showed a much stronger return with a 22% increase over the year. The capital value of agricultural land rose 12%, although it is uncertain how long this trend will last.
Overall, net incomes on the 150 estates surveyed increased by only 5.7% in 2005 to just over £185/ha (£75/acre).
Spending rose 5% to just over £138/ha (£56/acre) or 43% of gross income.