UNITED STATES - The value of real estate portfolios for US pension funds is still declining as Ohio Police and Fire pension fund has revealed as its real estate assets dropped in value from $1.01bn (€713.9m euros) at the end of 2008 to $784m by the end of the first quarter this year.

Real estate commentators say the situation is significant as it is likely to encourage more pension funds to leave monies on the sidelines until valuations suggest the market has bottomed or is flattening out.

Ohio Police and Fire currently has $126m of capital that has been committed to commingled funds but has not been called for by the real estate managers as there is low transaction activity and most real estate managers do not want to buy assets as long as their value still dropping.

Ohio Police and Fire now has several unfunded commitments: $38m for the Heitman America Real Estate Trust, $25m with Westbrook Real Estate Fund VIII, $12m for Blackstone Real Estate Partners VI, a further $8.5m for the Westbrook Real Estate Fund VII for $8.5m and Stockbridge Real Estate Fund II for $9.8m.

The recent review of its property valuations means the real estate portfolio is now worth 9.5% of the pension fund's total plan assets, but rises to $910m or 11% once unfunded commitments are factored in.

The pension fund also has a little more capital which could be invested in real estate and there is room for manoeuvre as it has a targeted allocation for real estate of 12%.