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Aviva and PSP in joint venture into London real estate

05 November 2015

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Aviva Life & Pensions UK is investing in central London real estate, in a joint venture with one of Canada's largest pension investment managers.

The 50-50 partnership between Aviva Life & Pensions, and Canadian Public Sector Investment Board (PSP Investments) will see Aviva selling 50% of its stake in a portfolio of central London real estate to PSP.

The portfolio of 14 prime assets is located across London comprising existing properties and those with planning consent, representing more than one million square feet of space.

Global head of real estate investments at PSP, Neil Cunningham, said he was pleased to partner with Aviva – an organisation he described as a seasoned real estate investor with a "deep understanding the London market."

He said: "This investment is consistent with PSP Investments' real estate strategy to invest in prime and dynamic city centres that we expect will outperform in the future, and is complementary to PSP Investments' existing portfolio in London."

Aviva Investors will act as asset and development managers on the venture, which will focus on office and retail properties.

The company will realise value for the partners through active asset management and development.

Initially, the portfolio will comprise a mix of both stabilised, income-generating assets and development opportunities in both the City and West End of London.

Ed Casal, global CEO for real estate at Aviva Investors said: "Aviva Investors has a strong pedigree in investing in prime Central London real estate assets and a background in delivering high profile developments.

"We are well positioned to implement a number of attractive development opportunities within the portfolio and look forward to working with PSP Investments and our Aviva client as we bring these to fruition."

Casal added the conditions in London are "strong" as demand for rental property pushes rent up while central London shops continue to benefit from low vacancy, booming tourist numbers and strong demand from international sellers.

Aviva Investors has over GBP 31bn of real estate assets as at 30 June 2015.

First published 05.11.2015

Lindsaysharman@wilmingtonplc.com