Institutional investors

Increased allocation to commercial property schemes
Three quarters of pension fund managers are not reducing their allocation in property in spite of the downturn in the market.

Research conducted by the Pensions Management Institute and Prupim reveals that 25 per cent of the 200 pension fund managers surveyed said they were planning to increase their allocation to commercial property, with 50 per cent planning to maintain their current allocation.

The remainder said they would reduce their allocation.

Prupim commented that given the difficult times in the commercial property market over the past year, this is a welcome vote of confidence from institutional investors. These findings confirm the long sighted nature of pension schemes as investors and it is reassuring to find that pension fund managers and trustees still see opportunities in both the UK and overseas commercial real estate markets over the next three years.

The research also found that almost half the UK pension funds that took part have real estate investments in foreign markets, along with an appetite for higher risk returns than they have typically sought in the UK.

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