(London): Aviva Investors, the global asset management business of Aviva plc (‘Aviva’), announces the launch of the Aviva Investors Continental European Long Lease Strategy Fund (CELLS). A successful First Close with €105m from two insurance investors was secured in April.
The Fund aims to deliver secure, predictable cash flow from predominately index-linked leases. The portfolio will consist of Continental European (exc. UK) properties with an initial focus on office, retail and alternative sectors in Germany, Austria, Benelux and Scandinavia. The assets will be long-leased to high quality tenants with remaining lease terms of typically at least 15 years. The Fund will aim to make quarterly income distributions of between four and five per cent per annum.
The fund will be overseen by Gil Bar, Managing Director, Germany and Martin Zdravkov, Interim Fund Manager. In addition, they will draw on the experience of Aviva Investors’ UK Long Income team, which has managed long income strategies for 20 years.
Ed Casal, Chief Executive, Global Real Estate, said:
“The launch of CELLS represents a further evolution in our outcome-oriented investment solutions offering, building on our pensions and insurance heritage. We launched the Lime Property Fund in the UK in 2004, and can now leverage that 12 year track record as well our deal sourcing and robust credit analysis expertise to deliver a long lease strategy in Europe. We believe that a defensive cash flow-focused strategy such as CELLS can assist our investors in meeting their cash flow matching requirements.”
Gil Bar, Managing Director, Real Estate, Germany added:
“The CELLS Fund offers investors the ability to benefit from the illiquidity premium inherent in real estate; inflation protection through indexation of rental income; and diversification away from fixed income investments. As the long term trend of low interest rates continues, we expect income-focused investors to look to CELLS as a viable solution for accessing attractive yields.”
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