Scottish Widows is partnering Lloyds Bank Commercial Banking to offer commercial real estate debt.
The venture comes after Scottish Widows last year said it was considering entering direct commercial real estate lending for the first time.
The move, part of Scottish Widows’ plan to invest in long-term UK commercial property and infrastructure projects, is aimed at funding liabilities on its pensions book.
The partnership will lend to established property investment companies to support new acquisitions and refinancing facilities across industrial, retail and office ventures.
Gavin Stewart, investment propositions director at Scottish Widows, said the move by his company to lend was also part of its efforts to invest in long-term UK infrastructure.
Both short and long-term investments are attractive, he said, “as they will help fund pension liabilities”.
Scottish Widows will be able to originate loans of over seven years, secured on high quality, well-let investment properties.
Transactions will be weighted towards institutions, with a focus on fixed-rate lending.
Initial loan-to-value ratios will not exceed 65%.
John Feeney, global head of commercial real estate at Lloyds Bank Commercial Banking, said the agreement enabled it to target new clients with longer-term funding needs.