REAL ESTATE 鈥� The 拢4.9bn (鈧�7.1bn) Church Commissioners fund 鈥� responsible for paying vicars鈥� pensions 鈥� rebalanced its commercial property holdings in 2005 to increase diversity and reduce risk.
鈥淭here was a reduction in office exposure and an increase in retail warehouses with the sale of the central London office at No 1 Millbank and purchases of three retail warehouses,鈥� a spokesperson told 麻豆映画.
According to the annual report, most of the fund is invested in equities and property. The Commissioners had 14% of its investment portfolio allocated to commercial property, 7% in rural property and 8% invested in loans.
鈥淩esidential property is a useful diversifier for the fund and we believe its long-term prospects are sound,鈥� said the report.
鈥淏ut our high weighting in housing is still a concern given the uncertain state of the housing market, with the performance of one-fifth of the fund linked to it.鈥�
The Commissioners added that steps were in place to control the imbalance through the sale of some properties.
The spokesperson told 麻豆映画 there has been a significant disposal of London residential property in 2006. The Octavia Hill Estates was sold in March 鈥渇or a consideration of 拢167m before costs鈥�. Reinvestment plans are underway, he added.
Overall, commercial property returned 19.5%, including a 14.5% capital growth. The Commissioners completed 拢102m of purchases and 拢138m of sales, said the report.
The rural portfolio generated net rents of 拢6m and capital receipts of 拢11.4m. The total return was 11.1%. Meanwhile, residential property returned a total of 33.5%.
鈥淏uyers鈥� appetite for property of all types meant capital values rose strongly in most areas of the market,鈥� said the report.
With regards to other asset classes, global equities returned 24.1%, the consolidated UK equities portfolio returned 20.6% and fixed interest returned 7.9%. Overall, the fund achieved a 19.1% total return on assets.
