GLOBAL - The Teacher Retirement System of Texas has approved $1.1bn (€849.5bn) worth of new commitments to real estate.

The largest of these was a $500m entry-level investment into General Growth Properties (GGP).

Pension fund officials said GGP, with its "diverse portfolio of high-quality assets, strong capital structure and clear operating strategy", was well positioned to create long-term value. 

Another factor in their decision, they said, is the fact the best regional malls in the US are currently held by public companies. 

They pointed out that public REITs owned 77% of the top-quartile malls, 69% of the total square footage and 84% of malls with a "strong" outlook. 

Texas Teachers made the investment directly with GGP after consulting with outside advisors during the due-diligence process. 

The pension fund will manage the investment internally going forward.

Texas Teachers has a recent history of investing with public real estate companies in the US, including companies like Camden Properties Trust, Parkway Properties, AMB Property Corporation and ProLogis. 

Pension fund officials said they were not targeting public REITs, but would continue to consider investments with them in future.

The second commitment was a $400m investment in the JP Morgan Strategic Property Fund, a core, open-ended commingled fund.

This commitment is the largest JP Morgan Asset Management (JPMAM) has ever received from a pension fund.

There is now a $1.6bn entry queue for capital going into the fund, and new commitments might not be called down until the end of 2010 or early 2011.

However, JPMAM now has under contract, or has closed on transactions, totaling $1bn, which should reduce the size of the entry queue by around 66%.

The final new commitment made by Texas Teachers was a $200m allocation for the Forum Asian Realty Income III, a commingled opportunity fund focusing on Asia.
 

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