UK - LaSalle Investment Management is to take over the management of the Royal Mail Pension Plan's (RMPP) £1.6bn (€1.8bn) UK real estate portfolio, which has been run by Hermes since 1995 and under its previous incarnation PosTel since 1983.

Hermes was originally established in the 1980s (as PosTel) to manage the investments of the pension schemes of the Post Office and British Telecoms.

But despite the BT Pension Scheme taking full ownership of Hermes in 1995, RMPP has continued to retain it as the scheme's property manager.

RMPP has a 10% target asset allocation to UK real estate, meaning it has a large portfolio of UK real estate.

Most of the assets are in the office and retail sectors, with a smaller exposure to industrial, and are held directly and through joint ventures.

It owns a number of large individual properties that each represent more than 0.1% of its total assets under management.

These include London shopping centres Brunswick Centre and Tandem Centre, valued at £79m and £59m, respectively.

"We are delighted to have been selected by Royal Mail," said Alan Tripp, UK managing director at LaSalle Investment Management.

"We are highly focused on maximising investment performance and this year we have delivered exceptional benchmark beating performance for our pension fund clients, many of whom we have worked with for over 20 years.

 "Our success is the result of the depth of our UK platform, one of the largest, most experienced and stable in the UK. We very much look forward to working with the Royal Mail Pension Plan to realise their investment objectives," he added.

A Hermes spokesman said: "It is very disappointing to lose a mandate from a long standing client but we fully respect RMPP's decision. Following the challenging market conditions over the last few years, we have made a number of changes in our approach to managing large segregated real estate mandates.

He continued: "These follow the principles and strategies that have been applied to clients such as the Hermes Property Unit Trust, a fund that has delivered strong long-term outperformance. Our investment platform remains robust, our existing client teams are fully resourced and we believe we are well placed to develop our third-party client proposition."‬