Employees Retirement System of Texas (Texas ERS) could invest up to $825m (€700m) in real estate in its next fiscal year, starting on 1 September 2018.

The minimum it would look to commit over the 12 months would be $550m, and most of the capital would be allocated to non-core strategies, according to board meeting report.

The plan is part of the pension fund’s objective to increase its real estate allocation in the next few years. Texas ERS increased its target allocation from 10% to 12% in December of last year.

The $29bn pension fund will typically make commitments in the range of $50m to $75m, and it considers funds, co-investments and separate accounts on a global basis.

Texas ERS believes non-core strategies can offer better risk-adjusted returns today, although it will continue to look for core opportunities, the pension fund said.