The value of the property assets held by the Merseyside Pension Fund fell by £7.3m from £290.9m to £283.6m in the year to 31 March.
Factors influencing the overall fall in the value of the property portfolio include a reduction in market value of £12.8m. Other factors affecting the overall valuation were purchases at cost and derivative payments of £19.5m and sales of property totalling £14.1m.
The fund's Report & Accounts 2012/13 also reveal a fall in net rental income from £15.9m to £14.07m.
Property investments as a percentage of the overall investment portfolio fell from 8% to 7% against a benchmark of 10%.
Returns from property as a percentage of overall income fell from 4% to 3%.
Significant property investments include a £28.3m supermarket in Heswall, Liverpool, and the £26.2m Fort Retail Park in Birmingham.
Liverpool City Council agreed a deal with Merseyside Pension Fund to buy a long lease on the Cunard Building for around £10m last month.
Merseyside Pension Fund operates the Local Government Pension Fund, which provides occupational pensions for public sector workers within Merseyside.
To see the full accounts go to http://mpfmembers.org.uk/content/active-members-news-2013.