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% of the 200 pension fund managers surveyed said they were planning to increase their allocation to commercial property, with 50% planning to maintain their current allocation.
The remainder said they would reduce their allocation.
Professor Paul McNamara, head of research at Prupim said: ‘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 pension funds were increasing allocation into property outside of the UK.
‘A decade ago we would have been surprised to find UK pension funds with any exposure to overseas real estate,’ McNamara said.
‘Through this survey we’ve found 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.’