"These results show the benefits of long-term investing in a broad range of asset classes as well as exploiting opportunities within them," says Church Estates commissioner Andreas Whittam Smith. "The Commissioners' property holdings have been a big contributor."

Its most valuable property assets include nearly 2,000 homes in its Hyde Park Estate, many overlooking the Royal Park; a number of properties lining trendy King's Road in Chelsea; and 1,590 flats and cottages in Central London, known as the Octavia Hill Estates and spread between Waterloo, Pimlico, Vauxhall, Walworth, Stoke Newington and Maida Vale.

The long-term property investments, nearly 30% of the fund's overall value, helped boost average total return, including capital gain and income, up to 10.2% over the past 10 years. This compares with 6.4% for 300 other similarly diversified funds, Church Commissioners claimed in their 2003 annual report, citing data from giant US fund manager State Street's WM Co performance measurement unit.

The Church's euro 1.7-billion ($2.1-billion) property portfolio, up only euro 43.5 million ($56.3 million) by value last year but at its highest in a decade, helped the overall fund give a total return of 17% last year against a 9.3% slide in 2002. One of the Church's top property performers in terms of total annual return (21.9%) came from its 100,000 acres of rural land, much of which dates back five centuries to Henry VIII's Reformation land grab from the monasteries.

The Church has been adopting a piecemeal approach to selling off bits of land whenever "they become rezoned for planning purposes," a Church Commissioners spokesman says. More recent commercial real estate investments, which showed a 7.7% total return last year, include a 10% stake in Europe's largest shopping centre--Gateshead's MetroCentre and a share in the Bluewater mall in Kent.