Aviva Investors has written a £144 million (€160 million) seven-year facility to refinance a UK retail portfolio owned by Aquila.
The UK property investor has also secured a £16 million mezzanine facility from PGIM Real Estate. In November 2014, PGIM Real Estate provided a whole loan/senior bridge along with development finance to assist the development of the Bond Street shopping centre in Chelmsford.
Aviva’s fixed-rate loan is secured against a multi-sector portfolio of 12 assets located in Chelmsford and Maldon, principally the Bond Street centre. The loan, with diversification benefits, “is a strong transaction on its merits”, Gregor Bamert (pictured), head of real estate finance at Aviva, told Real Estate Capital.
The Bond Street centre comprises a prime retail and leisure scheme of 300,000 square feet, anchored by a John Lewis store covering more than 120,000 square feed. Aquila developed the scheme over a number of years and the final phase opened in September 2016.
This transaction demonstrates Aviva Investors’ strong appetite across all sectors – Gregor Bamert
“This transaction demonstrates Aviva Investors’ strong appetite across all sectors and we are delighted to commence a long-term relationship with a company that has created value throughout the development cycle,” Bamert said.
The insurer has been expanding its real estate debt offering to include floating-rate finance and European property lending, with “material” progress made this year, Bamert told Real Estate Capital last September.
“Aviva can now provide something very similar to what a bank is offering,” said Bamert, adding that the insurer now provides floating-rate property finance for three to seven years through the Aviva Investors Alternative Income Solutions Fund – which can allocate up to 40 percent to real estate finance, as well as several segregated funds and mandates which total more than £1bn.
“This complements the firm’s traditional long-term, fixed-rate loan offering,” he noted.
Although it looks across European markets, Aviva’s core area is the UK. Late last year, it provided a £115.5 million, 15-year loan to Manchester-based property firm Bruntwood to support its regional UK development and investment drive.