Aviva Investors is backing a shopping centre regeneration project in south-east England by way of a forward funding agreement.
The asset manager’s REaLM (Returns Enhancing and Liability Matching) commercial assets fund has agreed an income strip deal with Gravesham Borough Council and developer Reef Group to support the St George’s Centre project.
The deal has enabled Aviva Investors to acquire the asset alongside an agreement with Gravesend Borough Council to pay rental income of £1.15m (€1.27m) per year over 50 years, subject to inflation.
Mark Wells, a director at Aviva Investors, said: “This transaction is another strong example of a win-win situation for both a local authority wanting to progress a key development and our pension fund clients, who are looking for long-term income.
“Having forged the partnership with Gravesham Borough Council and Reef Group, we are confident the development plans for the St Georges Centre and the wider area will contribute to the regeneration of Gravesend. We are actively investing in such properties for our REaLM Commercial Assets Fund, and have a strong pipeline that will support our efforts to grow the platform.”
REaLM targets secure, long-term and inflation-linked income streams for pension funds.
Councillor David Turner, a leader at Gravesham Council, said: “This is a major step in the regeneration of Gravesend town centre and for Gravesham as a whole.
“By working with Aviva Investors and Reef Group, we will stabilise and invigorate the retail environment of the St George’s Shopping Centre by introducing a leisure offer and improve the centre’s signage and branding, walkways and general environment.”
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