Aviva to launch UK property trust following Brexit Vote

The Aviva Group has announced plans for its first listed UK property trust, the Aviva Investors Secure Income REIT. With a target of raising 200 million pounds through an initial public offering in London, this move comes as demand for more liquid property assets has increased in the wake of Brexit.

Since the referendum, real estate yield-seeking investors have been turning to listed Real Estate Investment Trusts (REITs) as a more stable investment option compared to open-ended funds. The REIT market has seen significant growth, with 2.3 billion pounds raised in new issues and IPOs by mid-October, surpassing the total for the whole of 2016.

The decision to launch a REIT aligns with Aviva Investors’ goal of broadening its investor base for long-term income real estate. The trust will focus on traditional sectors like industrial, logistics, offices, and supermarkets, as well as alternative sectors such as doctors’ surgeries, student accommodation, hotels, and car showrooms.

Despite concerns about investing in open-ended funds following the Brexit vote, Aviva assures investors that the new REIT will not be in competition with its existing offerings. With a focus on long-term income and an average lease duration of 15 years, the Aviva Investors Secure Income REIT aims to provide stability and growth opportunities in the UK commercial real estate market.

The offering is being advised and underwritten by Jefferies, highlighting the confidence and support for this new venture in the property investment landscape. As the largest manager of UK commercial real estate with 24 billion pounds under management, Aviva Investors is poised to make a significant impact with the launch of this new REIT.