The merger, involving the sale of all of F&C's property holding units, together with associated debt, in exchange for the issue to F&C shareholders of shares in UKCPT – would form a property trust with assets of 1.7 billion.
Glasgow-based Ignis, owned by British life insurer Phoenix Group, said the rationale for the merger was to create an entity with a strengthened property portfolio that would also have a lower expense ratio.
"The merger would create one of the largest UK listed property companies with a larger free float and greater liquidity making it more attractive to institutional investors and helping to drive value," Ignis said.
Previously known as Resolution, Ignis has its headquarters on Glasgow's Bothwell Street. London-based F&C has an office on Edinburgh's George Street.
The deal is subject to shareholder approval. F&C shareholders could choose a cash exit at 91p a share under the offer.
Shares in F&C Commercial Property Trust closed up 0.7 per cent at 94.7p, while UKCPT shares were up 2 per cent at 82.6p.