The Greater Manchester Pension Fund is outsourcing its UK property portfolio to LaSalle Investment Management.

The £750m (€944m) mandate will see LaSalle manage existing GMPF properties as well as invest in new properties in the UK.

The mandate could increase to £1bn.

The pension fund decided to outsource its domestic real estate portfolio last year. 

As previously reported in November last year, Peter Morris, director of pensions at GMPF, told IPE sister publication IP Real Estate the fund did not possess the internal resources to increase the value of the pension fund’s property assets and the size of its holdings.

The GMPF’s tender came with a requirement that an external manager have at least £3bn of UK property assets under management.

LaSalle said it currently manages around £10bn in the UK.

GMPF’s seven-year contract ncludes a four-year framework agreement with CBRE and DTZ, in effect making them ’back up’ managers.

As previously reported, the mandate had an option to extend by five years and comes with triennial fee reviews.

According to the pension fund’s 2013 annual report, property made up approximately 6-7% of its £12.6bn portfolio, with a benchmark allocation to the asset class of 10%.

LaSalle, which has $50bn (€38bn) of assets under management, said it would initially target UK properties worth up to £75m on behalf of the fund.

Councillor Kieran Quinn, Tameside Council leader and GMPF chair, said: “This is a significant mandate that can rise up to £1bn, and we hope LaSalle can make a significant long-term contribution for the fund’s returns.”

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