Aviva puts £800m with profits property portfolio up for sale

Aviva Investors is looking to raise around £800 million from a portfolio of 47 UK properties it has put on the market on signs overseas investors are looking to move back into UK commercial real estate.

The properties are held within the Norwich Union Life and Pensions, Commercial Union and CGNU Life with-profit funds. 

The funds' manager, Aviva, said the properties have around 250 tenancies and average unexpired lease term of more than nine years.

Aviva believes it is offering investors a compelling opportunity to purchase a diversified portfolio of high-quality UK commercial properties.

The portfolio is diversified by sector, tenant mix and location and its assets range from commercial real estate,industrial and office premises, high street retail and retail warehousing.

Joel Lindsey, head of life funds - UK real estate at Aviva Investors, said he expected the interest to be high because of the diversified nature of the portfolios.

He added:'There have been increasing signs of late that UK and overseas investors are looking to move back into UK commercial real estate and the opportunity to secure debt financing is likely to further support that interest.

'The decision by our investors to reduce their UK real estate exposure has been driven by its performance over the past few years relative to falling values in other asset classes, which has resulted in an overweight allocation to UK real estate.'

Norwich Union Commercial Finance will be used to arrange debt financing on behalf of the with-profits funds to potential buyers.

Aviva is using property consultants DTZ to market the properties and will start talking to potential buyers immediately.