UK – Kent County Council Superannuation Fund has invested £30m (€36m) each into two property funds – Fidelity UK Real Estate Fund and the newly launched Kames UK Active Value Property Unit Trust.
Both funds run properties in a number of secondary locations across the UK.
The £60m allocation has been made on top of the existing £316m portfolio run by DTZ Investment Management (DTZIM), bringing the total near to the fund’s target allocation to property of 10%.
Within the segment run by DTZIM, £270m is held direct, with the rest in specialist pooled funds.
All properties are located in the UK.
Nick Vickers, head of financial services at Kent County Council, which administers the £3.8bn pension fund, said: “Property has been a very good long-term investment for us.”
Over the 12 months to 31 March, its core property portfolio returned 7.4%, compared with 1.9% for the benchmark.
The annualised return over three years to the same date was 9.8%, compared with 7.6% for the benchmark.
The pension fund’s main portfolio is in prime locations, but Vickers said prime was keenly priced at the moment.
“However, there are currently some good secondary properties with good long-term growth and yield, so it’s a once-in-a-lifetime opportunity to invest,” he said.
“These funds give us access to a part of the market that will do very well.”
The pension fund is looking at 6-7% target returns from its main property portfolio, but Vickers said the secondary funds were expected to make higher single-digit or lower double-digit returns.