West Sussex pension looks cautiously at additional RE allocations

The UK local authority pension fund says it is more cautious about real estate investments amid a general downturn in the British commercial property market.

The £1.6 billion ($3.2 billion; €2.1 billion) West Sussex County Council retirement scheme has warned it is looking cautiously at the commercial real estate sector even though the fund has not reached its target allocation for the asset class.

The fund, which represents 21,600 council employees, has a target of 10 percent of assets to be invested in real estate, but has currently only committed 8.2 percent of its funds.

A spokeswoman told PERE, West Sussex had re-confirmed their 10 percent target with Cushman and Wakefield Investors, who manage the fund’s property portfolio.

However she added the authority was cautious in the present economic climate. “The fund on the whole is being a bit more cautious in its approach [to real estate],” she said.

The pension fund, which invests in shopping centers, retail space and industrial property, has just sold an office development in London’s Grosvenor Street, the spokeswoman said. Financial details were not disclosed.

According to the council’s website, the fund had invested almost £127 million ($254 million) in property by March 2007, against £35 million ($70 million) in private equity or 2.2 percent of the fund. According to the website, Pantheon Ventures manages the private equity portfolio.