UK - Greater Manchester Pension Fund (GMPF) is to contribute as much as £25m (€30m) towards a joint venture housing development by Manchester City Council, following a 66% increase in assets targeted at local investment.

The £11.1bn local authority fund explained its decision by saying that demand for housing in the city centre would only increase as its population grew and supply levels were still low.

In a statement, the fund said: "GMPF has a long history of investing a small proportion of its assets locally with the twin aims of commercial returns and supporting the area. The lack of capital for investment is believed to be creating good opportunities.

"The initial scale of investment currently being considered is up to £25m. The aim is to create an approach to investment that is capable of being applied across Greater Manchester."

The statement added that GMPF had recently decided to increase its local investment target from 3% to 5% of scheme assets, allowing for an estimated £500m investment in the region.

The pilot project will see land owned by the council used for the construction of as many as 244 homes, with one-quarter of the units put up for sale upon completion and the remaining 173 retained to be let.

As a result of the joint venture approach, GMPF will own an 80% stake in the development, with the remaining 20% owned by he council to compensate for the loss of its land.

In minutes from a January council meeting, Manchester City Council said it hoped that, if successful, the pilot scheme would lead to a development pipeline of 5-10 years.

It noted that its efforts had so far been to develop and redevelop commercial property holdings in the region.

"An example of this type of investment is the joint venture being undertaken with [property developer] Argent to create One St Peters Square, a prime 270,000 square foot office development in Manchester city centre," the statement said.

The development, previously known as Elisabeth House, was considered an eyesore locally and targeted for redevelopment in early 2010.

At the end of March last year, the scheme had direct property holdings of £340m, held by its Greater Manchester Property Venture Fund, with a further £189m in real estate holdings in managed funds and unit trusts.