Aviva Investors is considering the sale of a 50% stake in the £1bn portfolio of central London property owned by its Life Fund.
The investment manager, which is being advised by CBRE, is in talks with a handful of sovereign wealth funds interested in buying into the portfolio, which includes several development opportunities.
The sale of a stake would help Aviva fund several of its larger developments such as the 350,000 sq ft Fountain House scheme at 130 Fenchurch Street, EC3 (pictured), which has planning consent and is ready for a start on site next year subject to a re-gear of the head lease.
Aviva is expected to retain the asset management of the properties and oversee development opportunities, utilising the capital raised by the sale to fund its share of the development cost.
In total Aviva owns more than 1m sq ft of central London development opportunities, much of which sits above or close to Crossrail stations.
However, not all of these assets are held within the Life Fund.
The fund also owns multiple London properties that are let on longer term leases.
The potential deal highlights how UK and European fund managers are taking advantage of global demand for large portfolios of central London property while retaining lucrative asset management fees.
Sovereign funds such as Norway’s Norges Bank Investment Management, Singapore’s GIC and China’s CIC have been seeking deals that offer the opportunity to deploy a large volume of capital in a single deal in gateway cities while partnering with experienced local managers.
CBRE began entertaining interest for the opportunity earlier this summer and a deal is not expected to be concluded until towards the end of the year, given its complex nature.
