The Massachusetts Pension Reserves Investment Management (Mass PRIM) board is doubling its industrial development programme with AEW Capital Management via a new $100m (€90.7m) commitment, according to a board-meeting document.

The investment programme was started by the pension fund in 2014 with a $100m allocation.

Mass PRIM said opportunity existed to achieve return premiums relative to core acquisitions.

It said the fund had sought to enhance the industrial portfolio by increasing exposure to new, highly functional assets at current market specifications.

Most of the projects are likely to become core assets in the future.

When Mass PRIM first started the development programme, it targeted returns of 150-200 basis point above returns on existing core industrial properties.

All of the capital for the development programme will be invested in the US.

The pension said it would target major industrial property markets on the east and west coasts.

The Atlanta, Miami, Seattle and Southern California markets have been targeted, with a typical equity commitment for a project being $25m.

Leverage may range from 0% up to 60%.

The initial make-up of the programme called for the pension fund to get a 95% ownership stake in any assets developed.

The other 5% would go to any development partner involved in each property.

The programme has a non-discretionary structure, with Mass PRIM reviewing individual transactions.

Industrial makes up 17% of the pension fund’s real estate portfolio, compared with 14% for the NCREIF Property Index, the benchmark used by Mass PRIM for real estate.

Mass PRIM will be issuing an RFP for real estate and timber-land consulting services.