NORTH AMERICA – The Massachusetts Pension Reserves Investment Management Board (MASS Prim) is looking to add up to $527m (€385.4m) into real estate as part of its 2014 annual plan.

The pension fund said the vast majority of the capital would be in the acquisition of core assets through its separate account real estate managers. 

In a board-meeting document, it said it set aside $345m for net core acquisitions.

This capital will be invested through its existing mangers, which include Invesco Real Estate, LaSalle Investment Management, AEW Capital Management, JP Morgan Asset Management and TA Realty.

Mass PRIM will be investing this capital in the main property types of office, industrial, retail and apartments, solely in the US.

The pension fund is also planning to conduct internal research on potential investments outside the country for the first time, including Europe. 

Mass PRIM is looking to invest the remainder of the capital in a non-core strategy. 

These could be in acquisitions and a new investment development programme.

The pension fund wrote in a board-meeting document that it would be creating an industrial development programme this year, overseen by AEW Capital Management, that will be allocated $100m. 

However, investment staff at Mass PRIM will perform individual transaction reviews, and the pension fund will maintain control over major asset-level decisions.

Mass PRIM will have a 95% ownership stake in any of the properties in the programme. 

The other 5% will go to the development partners signed up for each property. 

These partners will be responsible for managing the design of the properties, construction process and tenant sourcing.

Overall, Mass PRIM aims to achieve a 6.25% return on all of its new real estate investments. 

The pension fund has a real estate portfolio valued at $4.9bn, representing 8.6% of its total investment portfolio. 

Its targeted allocation to the asset class is 10%.

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