GLOBAL - Global property firm Hines is to team up with the New York State Common Retirement Fund (CRF) - the third-largest pension fund in the US - to invest more than $1bn (€613bn) in office and medical office projects.

Capitalised with $500m (€307m), the new venture, Hines Corporation Properties II, will "invest, develop, acquire, own and manage buildings primarily occupied by single-tenant users".

The latest deal mirrors an earlier partnership formed between the two parties that, according to Hines vice-president Doug Donovan, was a financial success and "provided a great office space solution for our tenants".

The first joint venture acquired approximately 3m square feet of building space between 1997 and 2004.

Donovan said the new venture would target all major US cities, but that the locations of where it invested would be determined more by the needs of individual tenants than by overall market conditions.

Houston-based Hines, which owns more than 460m square feet of property, currently invests in 65 key US markets.

Asked if the new deal showed that the real estate market was recovering, Donovan said: "Hines and NY Common together believe the timing is right to pursue this strategy and that there will be compelling opportunities to develop build-to-suits given the market dynamics."

According to the deal, the new company will hire Hines to provide "comprehensive" real estate services, including site selection, development management, conceptual construction, construction management, property management and operations.

Besides the US market, Hines has also completed similar build-to-suit projects in international markets.

The New York State CRF provides benefits for more than 1m active and retired state and local government employees, police officers and fire fighters.

With approximately $146.5bn in assets under management, it is the third-largest public pension plan in the US.

Hines is one of the largest real estate firms in the world, with offices in 106 cities in 17 countries and assets valued at approximately $23.7bn.