UK – Aviva Commercial Finance (ACF), the insurer’s real estate debt business, is to become part of Aviva Investors (AI) in the New Year.
The business is now being run by Ian Womack, AI’s global head of property.
Kevin Sale, who had headed up ACF since 1998, has retired from Aviva after more than 40 years with the company.
His replacement will be announced in due course and report to Womack.
ACF offers senior loans for up to 30 years at as much as 65% loan-to-value, secured on retail, offices and other commercial properties and portfolios, as well as public private finance and GP practices.
Interest is at fixed rates using Gilts as a benchmark.
However, while ACF’s new business operation will move to AI, its back-book operation, which handles existing loans, will remain with Aviva’s UK life business.
Meanwhile, Womack is now responsible for ACF’s £10bn (€11.9bn) portfolio, in addition to Aviva’s shorter-term lending programme, which started with AI’s UK Commercial Real Estate Senior Debt Fund, launched in July this year.
The fund, managed by James Tarry, makes first-ranking loans with five to 10-year maturities at 65% loan-to-value.
It targets a yield of between 2.5% and 3.5% above equivalent maturity UK bonds.
Mortgages are secured against core and core-plus UK commercial real estate, owned and managed by proven high-quality borrowers.
Now worth just under £300m, the fund has seven investors, including four UK defined benefit pension schemes.
Two loans totalling £53m have been made so far.