The Co-op has announced that its pension fund plans to invest up to £50m into social and affordable housing over the next year.

It hopes that the investment will provide “attractive, secure inflation linked income to the pension scheme” that will be able to meet the “needs of both members and the scheme sponsor".

PACE Pension Scheme chairman of the board of corporate trustees, Harry Baines commented: “Our investment strategy aims to meet the needs of our scheme’s members, but in a way that is aligned with the Co-op’s values.

“This funding provides a safe and secure investment opportunity for PACE that will benefit our members and at the same time is meeting a clear social need in the UK housing sector today.”

PGIM Real Estate has been chosen to develop the portfolio as part of its inflation-linked property holdings.

There will be an initial investment in 50 units in Dubar, Scotland, while PGIM Real Estate has also secured 48 units in Glasgow and 71 units in Yorkshire.

Eventually, the £50m investment scheme will provide 350 units and plans to continue the Co-op’s commitment to its “stronger Co-op, stronger communities” pledge.

Co-op chair, Allan Leighton added: “The decision by the PACE trustees to invest in the Social Housing sector illustrates the strength of the pension scheme and a positive will to invest in an area clearly in need of support.

"If this approach could be adopted more broadly across the pension fund industry, then the current supply gap could be narrowed much more swiftly and effectively.

“The Co-op is clearly making a sustainable and distinct difference that will help communities across the UK. I’m sure that Co-op colleagues, both past and present, will be heartened to know that a portion of their pension assets are being invested in this way.”

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