Ohio Public Employees Retirement System will target non-core strategies and niche areas of the real estate market in 2018, while selling core assets.
The pension fund is looking to outperform the market by focusing on assets that attract less institutional capital and those supported by demographics and other secular trends, according to its 2018 investment plan.
One strategy will be to seek to capitalise on changes in housing preferences of ageing baby boomers and maturing millennials.
Ohio PERS believes there will be opportunities to develop apartments that cater to seniors who no longer want the responsibilities of home ownership, as well as apartments in school districts for young families in search of more space.
The pension fund will also consider developing healthcare facilities and investing in industrial warehouses and mixed-use projects.
Ohio PERS told IPE Real Assets that it had not determined a specific amount of capital to be invested this year. At the end of November 2017, the pension fund had $7.57bn (€6.1bn) in real estate, representing 8.8% of total assets. Its target allocation for real estate is 10%.
The pension fund also expects to sell core assets this year, capitalising on aggressive buyers in the market.