UK - Merseyside Pension Fund has announced it is looking for a strategic property investment adviser for its  £262m (€278m) direct UK property portfolio.

The contract, which is valued at £50,000 a year, will be for an initial four-year period and Wirral Borough Council will have the option to extend the agreement for up to two years at its discretion.

"Our existing contract with Savills has come up for renewal after five years and we are merely re-tendering the contract under EU procurement legislation," said Peter Wallach, head of Merseyside Pension Fund.

Wallach told IPE Real Estate that the new appointment was not a reflection of a change in the pension fund's real estate strategy, but said it would help make the management of existing buildings more efficient and improve on rental yields and the mix of tenants.

"We are not changing our strategy in any significant way. In fact, to a greater extent the strategy is determined by the current market conditions. We are focusing on the asset management side of our property portfolio and not particularly looking to buy or sell for the existing portfolio," he said.

The pension fund currently allocates 10% to real estate and has a property portfolio valued at around £320m.

Merseyside pension fund is holding back from investing as it believes the market has further to fall, but said it had funds available for purchases and would consider buying prime properties at discounted prices.

"There hasn't been very much evidence of distressed sellers just yet, but if there is we will look to take advantage if the properties are appropriate," said Wallach.

The council is calling for chartered surveyors and property economists to submit their applications for the strategic property investment adviser tender before 5 May 2009.

Wallach noted Savills has been invited to re-tender and is likely to do so.

The decision on the appointment is subject to the approval of the local authority's pensions committee and Wallach expects a decision to be reached between July and September this year.

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