SWITZERLAND - The pension fund for the civil servants of the Canton of Zurich (BVK) will help develop a site in the centre of nearby Winterthur.
The pension fund bought the 6,200sqm area from real estate service company Halter Unternehmungen.
It now co-owns the land next to Winterthur central station together with the city government.
The BVK said the purchase price, for which details were not disclosed, depended on the income generated from rents over the first two years.
The pension fund expects the investment to yield 6% in the first year.
The land had been unused for several years due to a lack of funds - the city of Winterthur and the BVK want to develop shops, restaurants and housing, scheduled for completion by 2013.
Former owner Halter Unternehmungen will guarantee rental income for the first two years.
Domestic real estate makes up the largest share in the BVK portfolio, at 18.4% or CHF3.6bn (€2.6bn).
Separated from the rest of the portfolio, real estate investments are run by a specialised management team within the pension fund.
The BVK has already invested in Winterthur, a 30-minute drive north of Zurich, having helped to finance the development of a housing project on the Sidi-Areal.