China’s CIC Invests $700M in Brookfield’s 1 New York Plaza

Mainland sovereign wealth fund China Investment Corporation has made its first significant US real estate investment, acquiring a 49 percent interest in the 1 New York Plaza office tower from Brookfield Property Partners for $700 million, according to reports in the New York press.

CIC, as it is popularly known, has been China’s biggest investor in overseas properties, and has acquired or invested more than $7 billion into real estate assets outside of China since 2012, according to data compiled by Mingtiandi.

The sovereign wealth fund, which earlier had acquired properties in Australia, Belgium, France, Japan and the UK, had previously been linked to bids on high profile US assets including the Starwood Hotels & Resorts group. Until this acquisition, which was revealed this week in New York, the mainland’s largest buyer of overseas property had not yet played a part in Chinese investment into US real estate, which reached a record $8.5 billion last year, according to a recent report by the Asia Society.

Chinese Fund Takes Passive Stake in 50-Storey Tower

For its first US investment, CIC has chosen a 195-metre tall office building that was completed in 1969 at the intersection of South and Whitehall Streets, in New York’s Financial District. The sale, which was reportedly brokered on behalf of Brookfield by Darcy Stacom of CBRE, values the property at $1.4 billion.

Brookfield Property Partners will maintain a controlling stake in the complex, which includes 2.6 million square feet (237,000 square metre) of office space, as well as 40,000 square feet (3,700 square metres) of retail, according to a report in Crain’s New York. The Canadian-based investment firm will also maintain responsibility for leasing and management of the property, which is home to investment bank Morgan Stanley, and law firm Fried Frank.

CIC US Deal Preceded by European, Australian Acquisitions

CIC, which has acquired more than $7.3 billion in overseas property assets in the last five years, has become one of the major players among international institutional investors in real estate.

During 2015 the government-controlled fund bought a portfolio of Australian office assets from Morgan Stanley’s Investa unit for $1.79 billion, as well as a set of European malls for $1.44 billion.

CIC has also shown a taste for UK business parks, spending £250 million ($355.4 million) to buy a portfolio of suburban office properties in England from Australian real estate developer Goodman earlier this year, after buying the Chiswick Park project near London from Blackstone for more than US$1.28 billion in late 2013.