Aviva Investors Secure Income REIT has announced its intention to launch an initial public offering. The company is seeking to raise a target amount of €227.1m (£200m) via a placing intermediaries offer of ordinary shares in the capital of the company and a cornerstone subscription by an Aviva group company.
Applications will be made for the Ordinary Shares to be admitted to listing on the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange's main market for listed securities.
Aviva Investors UK Fund Services Limited will act as the company's alternative investment fund manager. The Investment Manager will delegate portfolio management to Aviva Investors Global Services Limited.
Jefferies International Limited is acting as sole sponsor, global coordinator, bookrunner and financial adviser in relation to the Issue. Scott Harris UK Ltd is acting as intermediaries offer adviser.
Andrew Cunningham, Chairman of Aviva Investors Secure Income REIT, said: “The Aviva Investors team has a significant amount of experience in delivering value and consistent income returns by investing in long-leased real estate including a multi-award winning c.€2.27bn (£2bn) long income fund, which has delivered an annualised ungeared return of 6.68% and annual distributions of around 5% since its inception. We aim to draw on this expertise to achieve our objective of delivering a secure and growing income return for investors, as well as the potential for capital growth, by investing in a diversified portfolio of the high-quality long-lease commercial real estate in the UK leased to predominantly investment grade tenants.”
Renos Booth, Head of Real Estate Long Income, Aviva Investors, commented: “The current environment of low-interest rates and rising inflation is particularly favourable for long income real estate investments. Our strategy aims to provide a compelling risk-return profile that offers secure income as well as lower volatility and lower capital value risk compared to traditional real estate investments, which we have a strong track record of delivering through investing in secure and long income real estate.Tenant credit quality is essential to providing security of income in a long lease strategy. Our focus will be to acquire high-quality buildings leased to predominantly investment grade tenants because sub-investment grade tenants have a higher probability of defaulting on their rental obligations and properties let to them exhibit greater capital value volatility over time. Furthermore, we will pursue leases typically with inflation-protected rent reviews with a view to achieving our aim of delivering stable and predictable cash flows for investors over the long-term.”
