GLOBAL - Real estate holdings for the New York State Common Retirement Fund - the third-largest pension fund in the US - registered a 26.7% return in fiscal year 2010-11, beating all other asset classes.

Eric Sumberg, press secretary for New York State Comptroller Office, said it was a "decent year in the real estate department".

Contributing to the performance was the sale of one of the New York's largest buildings to Google last year, Sumberg said.

Google bought the former Port Authority building that the fund owned with two other investors - Taconic Investment Partners and Jamestown Properties - for $1.9bn (€1.2bn) in December 2010.

Sumberg, however, declined to comment on whether the fund's appetite for real estate had changed.

At the end of March, the value of the fund reached its highest since the global economic downturn at $146.5bn.

The overall rate of return of 14.6% was higher than the expected 7.5%, but still significantly lower than 25.9% reported for the 2009-10 fiscal year.

Under current regulations, the fund can invest as much as 70% in equity (of which 5% can be invested in real estate) and 30% in fixed income.  

In terms of performance, real estate was followed by private equity, with an 18.9% return, while domestic equities returned 17.6% and international equities returned 14.3%.

Emerging market equities registered a gain of 16.1%, while Treasury inflation-protected securities reported a gain of 9.7%. Core fixed income investments returned 8%.

The fund provides benefits for more than 1m state and local government employees, retirees and beneficiaries.