Aviva Commercial Finance is in exclusive talks to sell a £500m portfolio to Kennedy Wilson, which would complete the winding up of a series of defunct businesses once owned by the Noé family.
The complex deal, which involves Aviva financing Kennedy Wilson’s purchase of the Project Bridgett portfolio with a new £400m facility, includes 36 trophy assets once owned by Noé-controlled companies.
It also includes 145 buildings that Aviva had financed for other smaller borrowers.
The deal will rid Aviva’s balance sheet of a hefty chunk of bad property loans as it prepares to complete a £5.6bn takeover of pensions company Friends Life.
KPMG restructuring partners Rob Croxen and Mark Firmin were appointed administrative receivers to 10 companies formerly owned by the Noé family in February. These included Landmaster, Agra and their subsidiaries, which were financed by Aviva with a £535m loan.
Most of the 367 properties controlled by Noé companies have already been sold in a pair of portfolios. The 187-asset Titan Portfolio was bought by Varde Partners for £240m in November and the 144-asset Project Tree was bought by Tristan Capital Partners for £150m in July.
The remaining Noé assets plus the 145 buildings added in to Project Bridgett command a rent roll of around £40m.
They were initially offered by Aviva to a handful of investors that had expressed an interest in Titan, including Varde, Apollo and M&M Asset Management, and Blackstone.
The retail-heavy, mixed-use portfolio includes Travelodges, Willing House on Gray’s Inn Road, W1, and Norfolk House in Croydon, south London (pictured).
Also included are a shopping centre in Leicester, Civic Court in Leeds, as well as 50/51 Great Russell Street, W1, 13 Grosvenor Gardens, SW1, and 11 Bolt Court, EC4.
A source said: “The key to making this a competitive deal was aligning the duration of the lending to the business plan for the assets. For Aviva, it means it gets the money back from a defaulted loan from the previous cycle, and at the same time creates new lending on terms suited to what it is trying to achieve with its new lending book.”
The portfolio was marketed using a number of code names, including Project Hyperion.
JLL is acting for Aviva; CBRE is acting for Kennedy Wilson.
All parties declined to comment.
