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ew Mexico State Investment Council (SIC) has set a $1bn real estate investment target for fiscal year 2025, with most of it allocated to non-core investments. This move is part of a strategy to shift its current portfolio from 60% core and 40% non-core to 60% non-core and 40% core over time.

    The council is waiting for core valuations to fully reflect market conditions before investing in core deals, which could take up to six quarters from the market bottom. Meanwhile, it's considering allocating up to 10% of its $3.6bn real estate portfolio to real estate investment trusts (REITs) due to the valuation gap between public and private assets.

    If approved, REIT investments would be added through a manager search in the future. The Townsend Group will recommend new private real estate commitments, each at least $100m, with co-investment options available for larger allocations.

    New Mexico SIC plans to increase capital allocation to industrial real estate and seek additional multifamily housing commitments while maintaining an underweight position in conventional retail and office properties. It aims to invest in funds operating in the US, Europe, and Asia on a long-term basis.