IRELAND - The Construction Workers' Pension Scheme (CWPS) in Ireland is undergoing a review of its real estate investment strategy following similar reassessments of its equity and bond investments.
The pension fund's investment consultants are currently investigating the role real estate should play in the portfolio in the future and may report their findings by the third quarter of the year.
Pat Ferguson, chief executive at CWPS, said: "We need to look at what structure property should take in our pension scheme. We have really looked at every element of it - our equities, our bonds, and our alternatives.
"We have gone fairly significantly into alternatives and out of equities. The next in line was property."
CWPS currently has a €66m exposure to real estate, representing 7% of the entire fund.
It consists of three retail assets and three office blocks in Dublin worth €35m in total, and a €31m holding in Standard Life Investments' European Property Growth fund.
Ferguson said it was difficult to predict the outcome of the real estate review.
The implications could potentially be significant, ranging from a possible reduction or removal of CWPS's overall real estate exposure to the creation of a global property portfolio.
"I don't know what direction it will take in terms of whether we would dispose of our direct-held property or not," Ferguson said.
The CWPS real estate portfolio has lost 60% of its value in the past two years.
Irish property has been particularly hurt by the global downturn, with a peak-to-trough fall of 55.6%, according to Investment Property Databank.
Only in the first quarter of 2010 have total returns begun to surface into positive territory.
"The downturn in the property market hasn't really affected us," Ferguson said.
"It has in terms of the value of our property, obviously - there was a significant downturn in the value of our Irish property here - but we never needed to cash in, and we have time to sit and wait until it comes back.
"If we didn't have that, we would have been in trouble."
Ferguson said the pension fund would still have undertaken its review of real estate even if the asset class had remained buoyant in recent years.