North Carolina Retirement Systems is investing $300m (€289.9m) in US self-storage properties through Prime Group.

The pension fund said the investment is being made by way of a newly created non-core separate account relationship with Prime Group.

Prime Group is a real estate owner-operator focused on acquiring and adding value to a large and growing portfolio of self-storage facilities located throughout North America.

The separate account intends to acquire cash-flowing properties that are located in high-growth markets where self-storage penetration per capita is at or below average.

Prime Group will have full investment discretion over the investments made for the separate account which targets a net internal rate of return of 12% to 14%, according to the pension fund.

The separate account will have a leverage component of up to 65%.

North Carolina Retirement told IPE Real Assets that self-storage real estate is one of the most consistent performing sectors in real estate.

“It does well in up markets and has done well in overall down markets. This is in part due to its simplicity of operations and low capital expenditures to operate assets,” the pension fund added.

North Carolina Retirement has in the past invested in self-storage properties through funds. The asset class represents less than 1% of its overall real estate portfolio.

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