California State Teachers’ Retirement System (CalSTRS) is planning to change the parameters of its core real estate allocation to include non-stabilised assets.

The $207bn (€184bn) pension fund wants to introduce a sub-category to its core real estate portfolio called “transitional core”, according to a board meeting document.

Such assets are expected to become core over time as CalSTRS improves them physically or through new leasings. Transitional core can also include forward funding of core developments and strategies that use higher leverage but focus on core assets.

Sophisticated real estate investors are increasingly pursuing so-called build-to-core strategies, whereby non-core buildings are turned into core assets.

The approach means investors can avoid the high prices and competitive bidding usually associated with core markets.

The proposed changes, which CalSTRS will discuss at its board meeting on Wednesday, should help the pension fund increase its exposure to such strategies.

The new sub-category will be able to make up 20% of the core portfolio.

At the end of 2016, CalSTRS owned $13.7bn in core assets, making up just over half of its $24.7bn real estate portfolio. Value-added investments represent 28% of the portfolio and opportunistic 17%.

CalSTRS will also begin a search for a real estate investment consultant ahead of the expiry of its current contract with The Townsend Group in February 2018.

The pension fund will issue a request for proposals in the coming weeks. A final decision is expected in November.

The consultant will provide a variety of services, including performance monitoring, analysis and advice on the global real estate markets, and reviews and recommendations on investment strategies and policies.