Two public pension funds have approved $160m (€144.5m) of commitments to Exeter Property Group’s Industrial Value Fund IV.

The Pennsylvania Public School Employees’ Retirement System set aside $100m for the fund, while the Kansas Public Employees Retirement System earmarked $60m.

According to a board-meeting document, before the new commitment, Pennsylvania Public School’s value-add exposure accounted for less than 33% of its real estate portfolio, compared with a long-term target of 50%.

The Fund IV’s strategy will include buying existing industrial assets and new projects.

For projects less than 75% leased, development will be limited to 20% of the fund.

Pennsylvania Public School cited several demand drivers continuing to impact industrial demand, including the growth of third-party logistics businesses, rising consumption and e-commerce.

The pension fund said that, following several years of rent growth, in-place leases remained below market value and would boost industrial property net operating income as they were renewed.

Exeter is seeking a total equity raise of $1.15bn for Fund IV, an increase from the $833m raised for Fund III, a 2014 vintage fund.

Pennsylvania Public School invested $75m into this fund, with a 16.5% net IRR at the end of March.

The pension fund has made a second investment in a value-add industrial fund, with a $100m commitment to Cabot Properties’ Industrial Value Fund V.

Cabot is planning to invest most of the capital in the US and will have the opportunity to invest up to 20% of the portfolio in Europe, focusing on the UK.

Pennsylvania Public School has approved a $75m allocation to the Bell Institutional Fund VI, targeting value-add apartments in supply-constrained US markets.