Aviva Investors is to float a real estate investment trust (Reit) on the London Stock Exchange in order to raise £200m.
The trust is called Aviva Secure Income Reit. Like all Reits, it will invest in physical property assets.
The trust has a pipeline of £85m of property it has already agreed to buy, and a pipeline of £400m of property assets it believes it could acquire quickly.
The Reit targets a dividend yield of 5 per cent, and a total return of 7 per cent a year.
Aviva Investors property investment division presently manages £24bn.
Renos Booth, head of real estate long income, Aviva Investors, said: “The current environment of low interest rates and rising inflation is particularly favourable for long income real estate investments. Our strategy aims to provide...secure income as well as lower volatility and lower capital value risk compared to traditional real estate investments.”
Paul Milburn, investment analyst at Lowes Investment Management, said he views commercial property funds as a good way to achieve protection from inflation.