The Crown Estate's decision to sell The Gate in Newcastle at a massive loss undermines its commitment to the North East, MPs have said. The Estate, which manages property owned by the British monarch, bought the leisure centre for £60m in 2012 but sold it this year for around £15m.
MPs highlight failings in report
That sale has been highlighted in a report by the Parliamentary Public Accounts Committee, a cross-party group of MPs that aims to ensure accountability in public spending. The report highlights a number of failings at the Crown Estate, including Andrew Mountbatten-Windsor receiving an income for renting out cottages on his former Royal Lodge estate.
The committee also urged the Estate to provide greater transparency on how it is diversifying its property across the UK, with 75% of the portfolio concentrated in London and the south-east of England. And it questioned why The Gate was marketed for sale for around £15m after being bought by the Crown Estate for £60m in 2012.
The Gate sale and M Core purchase
The Gate - which houses a mix of bars, restaurants and other leisure businesses - was bought by property group M Core in September. That deal came after M Core had also bought the nearby Eldon Garden shopping centre.
The MPs' report says: “We also noted instances where The Crown Estate has divested from urban developments outside London, including the sale of The Gate, a retail and leisure complex located in the centre of Newcastle, at a potential loss given the sale price of around £15m against a 2012 purchase price of around £60m.
Investment strategy questioned
“In his evidence, Mr Labbad (Crown Estate chief executive Dan Labbad) argued that the disposal of The Gate was necessary to redeploy capital into opportunities associated with offshore wind supply chains. While recognising The Crown Estate’s ambitions to diversify its portfolio and increase investment outside London, it was not made clear how individual investment decisions, both current and future, would contribute to a more geographically balanced portfolio or support growth in areas that have historically received lower levels of investment.
“We were therefore sceptical that The Crown Estate had provided sufficient evidence to demonstrate that its current investment strategy will unlock growth opportunities in communities outside of London and the south-east of England, rather than primarily concentrating investment where growth is already established.”
The Crown Estate has faced criticism in recent years for not using its significant resources to invest in all parts of the UK. In 2024 The Estate established a £50m Supply Chain Accelerator fund to support companies in the North East offshore energy sector, and earlier this year it made an announcement with North East mayor Kim McGuinness and the Tees Valley mayor Ben Houchen that it would aim to boost the region’s economy by leasing areas of the seabed for offshore wind farms.
The Gate is not alone is seeing a significant fall in its value in recent years. Changes to shopping patterns have seen many city centre sites lose value compared to 10 and 15 years ago. The Crown Estate declined to comment on the report at this stage.
