PGIM Real Estate has been awarded a £265m mandate to develop and manage a UK real estate portfolio for the Co-operative’s pension scheme.

PACE, the largest of the Co-op’s pension schemes with 90,000 defined benefit members, has £11bn in assets under management.

PGIM Real Estate will seek long-term, inflation linked returns through investments in UK commercial and residential properties, including leisure, social housing, care homes and car parks.

Harry Baines, chair of PACE Trustees, said the pension scheme was exploring “alternative opportunities to capture inflation-linked returns”.

“PGIM Real Estate demonstrated both its credentials and experience in managing a range of property solutions to deliver this,” he said.

PGIM Real Estate said its UK pension fund client base has grown steadily since 2010. As of 30 September, it manages £1.1bn in UK real estate for its UK pension scheme clients.

“We are pleased to partner with PACE to help secure financial security for its members, and appreciate its confidence in our ability to manage liability matched strategies built over several years of working with UK pension schemes,” said Andrew Macland, head of UK for PGIM Real Estate.