Aviva Investment and CB Richard Ellis to Create Property Fund

Yesterday, on Monday June 27th, Aviva Investors – part of the Aviva Insurance Group – said it plans to set up a property fund in cooperation with CB Richard Ellis, property brokers, in order to buy new residential properties to further rent them out. The construction of the Aviva-CB Richard Ellis fund came as a response to the initiative launched by the British Government’s Housing Agency in May 2009. Let us remind, that the initiative aims to encourage large British institutions to finance the housing market, particularly residential rental properties. In his statement, head of property specialist funds at Aviva, Mr. Andrew Appleyard, said that the company is currently negotiating the creation of the fund with CB Richard Ellis and is already in the early stages of the proposal development. He added that the company is determined that the current situation on the British market gives Aviva Investment and CB Richard Ellis an excellent opportunity to purchase high-quality investment assets in important locations. According to Reuters’ poll, UK property prices have already declined by 8% this year, which adds to a 16% decrease in 2008 and represents a great chance for the companies to purchase new-built properties at low prices. Mr. Appleyard said that the companies have not yet decided on a launch date for the fund because its development is still in its early stages. This fact is also the reason why he refused to confirm the report, published by Financial Times, saying that the fund aims to raise as much as £1 billion. The creation of the fund is also being supported by an unnamed American partner. The fund plans to construct pre-ordered residential blocks in places located near important regeneration sites.

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