A group of Midlands local authorities have created a new fund that will see them invest up to £500M in UK property over the next few years.

LGPS Central, which combines capital from eight UK local government pension schemes, has created the LGPS Central UK Direct Property Fund. It will be managed by DTZ Investors.

The fund will be seeded with two assets bought from some of the pension schemes that are part of the fund, a retail park in Enfield and an industrial estate in Hayes, with a focus on responsible investment, LGPS Central said.

It will be an open-ended fund, meaning that the investors will have liquidity to take equity out of the vehicle.

The partner funds that make up LGPS Central are Cheshire Pension Fund, Derbyshire Pension Fund, Leicestershire Pension Fund, Nottinghamshire Pension Fund, Shropshire Pension Fund, Staffordshire Pension Fund, West Midlands Pension Fund and Worcestershire Pension Fund.

LGPS has £26.5B of assets under management.

There are similar collections of pension funds from London and the north. All of them are increasing their allocations to property, an asset class in which they are historically underweight, despite the volatility in the market.