Switzerland’s largest pension fund Publica plans to invest between CHF150 and 200m (€158m and €211m) in real estate annually in the coming years to mainly target residential assets, the pension fund’s head of real estate Christoph Gerber told IPE Real Assets.
Gerber said the CHF39.4bn pension fund intends to make the investments to help increase its real estate allocations in Switzerland, as the target quota for the asset class has not yet been reached, adding that Publica will also aim to reduce the share of commercial real estate properties in its portfolio.
Last year, the pension fund designed a new strategic asset allocation, reducing fixed-income investments in favour of other asset classes, including Swiss and international real estate, and infrastructure private equity.
According to 2022 figures, Publica has CHF3.3bn invested in directly held in real estate. Publica’s overall real estate investments amount to nearly CHF6bn, according to the latest published figures.
The scheme has recently invested an undisclosed sum to buy 166 apartments, 4 commercial spaces, 4 offices and 70 storage spaces in Quartier Cedres in Chavannes pres Renens in Lausanne.
“The acquisition [in Quartier Cedres in Chavannes pres Renens] is a new and modern residential property that meets high sustainability requirements, very well developed, in a robust market with high demand,” Gerber said.
Publica anticipates that interest rates will exhibit a sideways movement, reducing the likelihood of negative value adjustments.
“We expect an increased of investor appetite in the real estate market in 2024, compared with 2023, with a focus on properties with high ESG compliance,” Gerner said.
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