UK - The UK pension fund of car manufacturer BMW has sold a distribution centre in Europort, Wakefield to UK real estate company Patrick Properties.
The 220,000 square foot property, let to Royal Mail, was sold for £10.6m (€12.2m), reflecting an initial yield of 8.4%.
The pension fund diversified outside the UK for the first time last year by committing to a European fund of funds managed by CBRE Investors.
The £100m commitment to the vehicle was to be funded by proceeds from sales of UK properties, but BMW would not confirm whether the equity freed up by the latest disposal was to be reinvested in European markets.
Since April 2007, the pension fund has targeted a 20% exposure to alternative assets, comprising a 7.5% weighting to active currency, low risk hedge funds and infrastructure, alongside a 12% allocation to real estate.
The UK section of the property portfolio constitutes a 9.5% weighting, with the balance (2.5%) invested in Europe ex-UK.
Legal & General Property manages the pension fund's domestic real estate portfolio and has the objective of outperforming the International Property Databank (IPD) UK benchmark by 0.5% per annum over three-year rolling periods.
The UK real estate portfolio returned -12% during 2007-08, underperforming its benchmark of -10.1% for the period.