No new church property is being built yet new churches start everyday. The result? Demand easily outstrips supply.
Church property is overused and services are held back-to-back
We work with a number of clients helping them in their quest for a suitable commercial property. These commercial properties are potential places for worship. We know of some churches that have 5 or 6 different churches using the same building. There is so much pressure on accommodation they usually hold services back to back to cope with demand. Outside the sector no one realises the pressure in the church property world.
A vacuum in the city
At Tunji Adebayo & Co we are also seeing a trend where developers come in and buy buildings. Good, you may say, but they are buildings currently being used as churches. In one sense the church receives a decent amount of money and benefits for this transaction. But the problem is they often move out of the community to cheaper areas on the periphery of London. This leaves a vacuum in church property availability.
Gentrification pushes out church communities from central London
The problem with this is that many of these churches are in areas that were traditionally considered non-desirable. As gentrification sweeps across London the value of these buildings are rising astronomically. As a specific example one of our clients sold their building on the Old Kent road to a developer for £8 million in 2015. Another is in the process of selling for £4 million in Hackney. You can see church property is actually hot property!
It’s time for commercial property owners to reappraise their portfolio
So, we can see it is very difficult for new churches to even begin to think about purchasing new church premises. It’s even more difficult to find one in their community when prices are this high. This is especially true as lending to this market is rather under developed. That doesn’t mean it’s not possible to borrow. We must give credit to the Charity Bank and Kingdom Bank for the work they do to fund church property development. These factors all mean that this type of leasehold property is in even higher demand. Landlords would do well to look at changing the use of their existing buildings. It really is a fertile opportunity.
A church tenant is an excellent bet
Therefore, if you are thinking about your own commercial property portfolio it is worth considering leasing to a church. There are so many types of building that might be appropriate. We are not looking at traditional style church buildings either. So many of our clients have moved into ex offices, warehouses and other commercial spaces. Apart from a sign outside you would not realise a church operates from the building. There is very little change. In addition churches are usually a long term tenant that is often prepared to pay more to find the right accommodation for their congregation. You might be surprised to see how beneficial current church property trends might be to your portfolio.
If you have a suitable property and would like to explore renting it to a church in London then please contact us and start the conversation.
Tags: church property