Church Commissioners' £2bn property portfolio delivers strong returns

The Church Commissioners has delivered a total return of 11.6% from its £2bn property portfolio in 2016 – boosted by investments in timberland and forestry. The body, which manages the Church of England’s investments, began investing in global timberland markets five years ago and has built up a portfolio worth more than £360m across the UK, the US and Australia, which notched up a 24.3% return last year.At the same time, it has been scaling back its commercial and residential property holdings in recent years – notably with the sale of its stake in the Pollen Estate in 2014 to The Crown Estate and Norges for £381m.The Commissioners’ annual report, which was published at the weekend, stated that, it was monitoring the commercial property markets closely and “has funds to reinvest when we think the time is right.

”Property markets ‘very full’

Rosemarie Jones, deputy surveyor at the Commissioners, said it was comfortable “to be patient and take a long-term view” given its view that property markets were “very full”.Its residential property portfolio – which is dominated by the Hyde Park Estate – generated a total return of 14.1% last year despite the slowdown of the London market. It said it had generated £23m from lease extensions and sales at the estate, and reinvested £9.9m in improvements.The Commissioners’ indirect property holdings also performed well – delivering returns of 17% - helped by currency gains related to its US and European investments. The indirect portfolio saw the greatest volume of sales of the property portfolios, generating £66.3m. Meanwhile, the wider investment portfolio delivered a total return of 17.1% - more than double last year’s 8.2% return. First church estates Commissioner Sir Andreas Whittam Smith described it as a “stellar outturn”.