Pension schemes diversify into alternative property

HospitalBlackRock says six pension schemes have allocated to a new fund that invests in alternative property assets in the UK, such as primary healthcare, student accommodation and

housing associations.

The company developed the fund to answer institutional investors' needs for long-term inflation-linked income streams. The fund is open only to institutions and targets a 5% distribution yield with monthly distributions.

“Both traditional and non-traditional real estate can provide pension schemes with alternative sources of long-dated income, but we see alternative property assets coming more into vogue,” says Marcus Sperber, head of real estate for BlackRock in Europe, the Middle East and Africa.

BlackRock says the UK Long Lease Property Fund has attracted £250 million (€290 million) and invested £100 million of it in property assets with an average lease term of more than 20 years. The fund invests in traditional commercial property such as supermarkets and offices as well as alternatives.

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