special report: church land
The big squeeze
Line between religion and business crossing in bid for land as congregations grow
By Lee Siew Hua , Susan Long
The rising cost and scarcity of church land, coupled by fierce bidding over the past five years, have made it more viable for some churches to venture into commercial territory and go into business to pay for it.
In the past few years, the winning bids for church land with 30-year leases have shot through the roof, with prices breaching $4,500 per sq m in 2007 - much more than similar suburban residential land costs.
'As a ballpark comparison, the church site sold in 2007 worked out to $3,238 psm per plot ratio. If we convert that to a 99-year equivalent, it would be about $4,860 psm per plot ratio, which is over 50 per cent higher than the prices of suburban residential land sites sold in that period,' notes Associate Professor Yu Shi-Ming, head of the National University of Singapore's (NUS) Department of Real Estate.
The Government plans and zones land for places of worship, factoring in population growth in towns and mindful of Singapore's multi-religious setting. Each parcel of land is open for tender by the Housing Board only to each particular religious group. The HDB is a government land sales agent, along with the Urban Redevelopment Authority (URA).
The sky-high rates for church land could partly be because very few sites were released after 2005. Before that, about a couple of sites were released every year - with up to four in 1992 and three in 1998.
But in the last five years, only two sites have been released. Both were hotly contested by various church denominations seeking to plant new churches or upgrade to bigger premises.
In 2007, a 3,000 sq m tract of land in Compassvale Link in Sengkang sold for a whopping $13.6 million, after intense bidding by nine churches. The Church of Jesus Christ of Latter-day Saints clinched the parcel, using tithes from its 2,300 members here, plus gifts from sister churches worldwide.
Earlier this month, a 2,973 sq m plot at Gangsa Road in Bukit Panjang fetched $11.28 million, with the 1,500-member Korean Church In Singapore outbidding three other churches.
What has aggravated the problem is that religious land leases were shortened from 60 to 30 years around 1990. Lighthouse Evangelism is said to have snapped up the last of the 60-year-leases with its church in Tampines, which opened in 1992 on National Day.
Pastors say the clock starts ticking the moment they successfully land a site. Before they finish paying for the building costs, which can be equivalent to or greater than land costs, they have to start saving for the next 30 years.
'The trouble is that there are no indicators as to what the new lease price will be, and what considerations will go into renewal of lease,' says the pastor of a large mainline church in the central area, speaking on condition of anonymity.
As some churches close in on their expiry date in about 10 years' time, pastors hope the authorities will reveal the criteria and quantum for lease extension soon. Deacon Jack Ho of the New Creation Church wonders if it will be like 'the development charge to top up the lease, like what happens in an en bloc sale'.
Space crunch
Meanwhile, second-guessing and uncertainty have led to a bidding frenzy whenever a new plot is released. The recent bid for the Gangsa Road site even led to cloak-and- dagger corporate tactics.
For example, some churches got more than one cashier's order from different banks to make up their deposit, in case other contending congregations with members working in one of the banks were able to guess their bid amount.
Some churches, like the 12,000- strong Lighthouse Evangelism, have a group of people continually looking at land acquisition. Lighthouse has put in bids for the last five rounds of tenders between 2003 and this year, only five years after it acquired its second piece of land in Woodlands Circle in 1998. Other frequent bidders in the last 12 years include Victory Family Centre and Bethesda Community.
In fact, fast-growing churches like City Harvest hire property consultants like Knight Frank for tenant representation - a suite of services that can involve analysis of options and negotiation of contracts.
This is because large churches say they are hit by a double whammy - a space crunch as membership grows, as well as the trend that church land sites have been shrinking over the years. Since 2000, released sites have been consistently under 3,000 sq m in size, compared with 4,617 sq m in 1995, according to HDB data.
The challenge for growing churches is how to keep the whole congregation in one auditorium. At the 20,000-strong New Creation Church, the main auditorium in Suntec City accommodates 1,400, or about a quarter of those who attend each of its four Sunday services. The majority have to watch the simulcast at five other venues - two Eng Wah cinema halls and three overflow rooms - in Suntec City.
From today, the church is expanding to its sixth overflow room - a GV Marina cinema hall - with a capacity for 1,800 people.
New Creation, which first met in a member's Holland Drive HDB flat in 1983, was registered the following year. From 30 people that year, attendance has soared to 20,000 and, along the way, the me- gachurch has outgrown about 10 venues.
'Over the years, we were sojourning through hotel ballrooms mostly,' says Deacon Ho, whose list includes Grand Central, New Otani and Westin.
Then in 1998, the church rented an auditorium from Suntec City, forming Rock Productions to rent out the venue for secular uses on weekdays to get around zoning issues, and to secure for itself a large- enough venue for its weekend worship services. But with an annual church growth rate of 12 per cent over the past five years, it is now bursting at the seams for its first two Sunday services.
No-signboard churches
Smaller churches with fewer resources are also resorting to contortions to get around expensive church land. Many move their meetings from home to home, or settle between greasy workshops in industrial estates. They go without signboards, careful to maintain friendly relations with neighbours and keep the decibels low.
The pastor of one such 50-member church, which operates out of a rented $2,000-a-month shophouse in the heartland, says: 'I always remind everyone to keep their shoes indoors and not to create a nuisance.'
However, it is understood that the authorities are about to clarify principles on the use of secular space. This has caused much anxiety among churches without their own land, which are now more diligently than ever saving towards their next bid.
'Rising land cost has become a big pressure point and some churches' biggest-ticket item, exceeding even staffing costs. But when you grow beyond a few hundred, it is imperative to secure a stable location and facilities,' says a prominent denominational pastor here.
A comparison of data over the last decade shows that church land costs on average about 50 per cent more per square metre than Chinese temple land. It also costs 3.5 times more than Hindu temple land, based on 1992 figures, when the last Hindu site was tendered. Mosque sites are allocated to the Islamic Religious Council of Singapore (Muis) at a price determined by the chief valuer, usually three to four times below market value, according to a paper by NUS geographer Lily Kong.
Since churches are paying market rates for land, by extension, some have also resorted to the market and doing business to pay for it.
'After all, they must be creative to recoup funds to operate, and the quickest way to make it back is to go into business. And it becomes a vicious circle,' says a seminary dean, who declined to be named.
Commercial investments
Seeking a better return from assets, two megachurches have invested hugely in commercial spaces. New Creation's business arm Rock Productions has teamed up with mall developer CapitaMalls Asia to build a $1 billion lifestyle hub in one- north. This will house shops, a concert hall and a theatre, when ready in 2012.
In 2001, Rock Productions also bought Marine Cove, hoping to build an auditorium, for which the previous owner had received in- principle approval from the National Parks Board. But the deal fell through as the URA had zoned the beachfront cluster for food and recreation. The owner then dropped the price, from the valuation of $14 million to $10 million. Marine Cove is known to be 'profitable' for the church today.
In March, City Harvest Church announced it was paying $310 million to become a co-owner of Suntec Singapore. The church is looking to move to a 12,000-seat auditorium there in the second quarter of next year, after its Singapore Expo lease expires. The plan is that profits will eventually be able to cover the rent, and that financing will be self-sustaining.
Responding to these moves, theologians here say the Bible is not explicit on whether churches should be in the real estate business, but that their core business should be spiritual.
They note that churches often start out acquiring commercial land to secure more permanent church premises, then incorporate a company to run it independently in accordance with regulatory requirements, both done out of necessity. But along the way, they discover the joy of making profits.
Many pastors then feel compelled to run their churches like CEOs. Executive Pastor Derek Dunn of City Harvest Church, for instance, serves as CEO for Singapore's biggest church with a congregation of 33,000.
Sociologist Mathew Matthews observes that the corporate model has now permeated churches here, many of which amass a wealth of professional and managerial talent on their boards. This is pervasive in the United States and developed nations. 'Congregations like organised and professional structures,' says Dr Matthews, who has written on Christianity in Singapore.
The trouble, says Dr Roland Chia, dean of postgraduate studies at Trinity Theological College, is when the church becomes distracted from its core mission. 'The church, of course, is not a business enterprise. Its main work is the proclamation of the gospel of Jesus Christ,' he says.
But undeniably, the stakes are so high today that becoming big, if not mega, is necessary to some extent for survival, say pastors.
Two under one roof
So what are viable solutions to this space crunch, going forward?
Mr Teoh Chong Tatt, a pastor at Bukit Panjang Gospel Chapel, is not convinced that every church needs its own land. 'Why can't a couple of churches join forces and resources to bid together for one space and share it? Otherwise, the building is often under-utilised, especially on weekdays.'
A pastor of an 800-strong Presbyterian church agrees: 'There are just too many church buildings in Singapore. Do we need another one? I believe that the church should be a blessing to others and not just to itself. The money used in acquiring land could be better used to fight poverty and social problems.'
After all, Hindu temples do share premises. As many as 13 temples merged into four in the mid-1990s. They combined to build new temples, responding to a 1992 call by the Government, which had noticed that Hindus were overstretched trying to raise funds to build temples.
But the reality is that doctrinal differences among churches often stand in the way of sharing. As the pastor of one of the oldest churches here puts it: 'Though we have one God, we have many different perspectives how to do church. Each church has its own mores, traditions, theological perspectives, decision-making processes and structures.'
Plus, church is a seasonal business. Everyone wants the best slots on Sunday, say pastors. No one wants to be allotted the sleepy hours in the afternoon.
Since 1982, only about three sets of churches have forged a successful land-sharing arrangement. That year, Mount Carmel Bible-Presbyterian Church and independent Bible Church jointly tendered for a West Coast Road site. Both ended their nomadic days in 1985 with the launch of Clementi Bible Centre.
In 1985, the Lutherans and Anglicans also evenly split the cost of building and running Yishun Christian Centre. A joint parish committee now administers the building and coordinates usage. This union has worked out, say observers, because while the two denominations are distinct, both sprang from the 16th-century Reformation Movement when the Protestants broke away from the Roman Catholic church. Plus Anglicans and Lutherans are 'liturgical', reading scriptures on a similar schedule.
Even more doctrinally compatible is the example of Hebron Bible-Presbyterian Church. In 1993, it won a bid for a 3,915 sq m plot in Choa Chu Kang. At least three sister Bible-Presbyterian churches now rent premises there. Sunday services run like clockwork - at 9am, 10am, 11am, 1pm, 5pm and 8pm.
One 100-member tenant church based there is Mount Horeb Bible-Presbyterian Church, led by Reverend Timothy Phua, who is mindful that it takes effort for churches to coexist and that his 5pm service slot is not ideal.
But he says: 'The Lord opened the door for this time slot, so we went in. From a worldly perspective, everyone will want the best property in Orchard Road, a 200-space car park, food court, MRT. Sure, the church will grow.'
He says he sticks to the 'main philosophical question of what the church is for', which is to win over people wherever it is planted.
Land-scarce solutions
Going forward, there are no easy solutions to the problem. Should the Government release more land for religious use, and perhaps consider different-sized plots and clearer guidelines on land leases for these purposes?
The URA says it sets aside land for places of worship in its masterplan, and has a zoning system to clearly define the uses allowed at each location. In planning for the size and location of each site, it seeks to balance the needs of various religious groups and the public.
But more immediately, to ease pent-up demand for sites, NUS' Prof Yu says existing sports halls and school auditoriums could be opened up for church use, which would increase their usage on weekends.
Anglicans and Methodists already use the halls of their mission schools for church activities, notes Deacon Ho of New Creation. Why not let government schools also earn some money by renting out their halls? 'As long as there are no crosses and altars,' he qualifies, and suggests that when churches install good sound and video systems, that too will benefit the schools.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak, however, thinks schools should stay secular. 'Using industrial premises on weekends may be a more creative solution,' he says, but adds that there may be issues like security and parking woes in industrial estates.
He maintains it is no fault of the Government that the size of some congregations have outstripped national provision for church land. 'The Government can't change plans each time just because a few churches grow very fast.'
And perhaps, there is some comfort after all from the daunting data on church land prices.
Knight Frank group managing director Danny Yeo calculates that from 1991 to 2010, the average land price paid by churches was about $1,900 psm. Prices for parcels moved up and down in those years, 'mostly in line with the general market', he says.
But the real disconnect, he notes, is that supersized churches today 'have the budget but no choice' in a situation where sites on offer are too small to meet their requirements. With new sites offered all below 3,000 sq m, the biggest auditoriums that can be built will seat only 1,000.
'But megachurches like New Creation and City Harvest need auditoriums that seat 4,000 to 5,000 at least. They need much larger premises,' he says.
If not, churches will perpetually be on the move, having to devise various market solutions and at risk of encroaching into secular space.
siewhua@sph.com.sg
suelong@sph.com.sg
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TWO VIEWS
A necessity
'Rising land costs have become a big pressure point, and some churches' biggest-ticket item, exceeding even staffing costs. But when you grow beyond a few hundred, it is imperative to secure a stable location and facilities.'
A prominent denominational pastor
An indulgence?
'There are just too many church buildings in Singapore. Do we need another one? I believe that the church should be a blessing to others and not just to itself. The money used in acquiring land could be better used to fight poverty and social problems.'
A pastor of an 800-strong Presbyterian church
The congregation at a City Harvest Church service at the Singapore Expo last Sunday. --ST PHOTOS: LAU FOOK KONG, NG SOR LUAN
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URA Response
The Government sets aside land for places of worship, taking into account Singapore's population growth and demographic make-up, and mindful of various religious needs in a multicultural setting.
The land sites are 'planned and safeguarded' for use as places of worship in the masterplan for the city and released in the Housing Board tender, in tandem with the population growth in each town.
The Urban Redevelopment Authority (URA) highlighted these principles in response to The Sunday Times' queries as to what guides the authorities in planning and zoning land for religious use.
In planning for the size and location of each site, the URA says it seeks to balance the needs of various religious groups and the public.
These places of worship are planned near or amid neighbourhoods as a 'social amenity', to be conveniently close to worshippers.
'On the other hand, we have to ensure that the size and location of these sites do not lead to significant traffic, noise and other disturbances to residents living close by,' said a URA spokesman.
Singapore has a land use zoning system that defines clearly the nature of the uses allowed at specific locations. 'The zoning system is important as it helps to safeguard the amenity of certain locations and provides certainty and transparency on land use to home owners, businesses, and various groups in society,' the spokesman added.
In response to questions about churches venturing into commercial land, the URA said sites zoned for 'commercial' use are intended for commercial activities and to serve as 'secular spaces for people from all segments of our society'.
'While we recognise that there may be a need for various religious organisations to make use of commercial venues for large-scale events on an ad hoc basis, sustained and significant use of commercial venues for religious activities should not crowd out the commercial uses and significantly alter the secular nature of these places,' said the spokesman.
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