ADIA, Hines Sell Shanghai Trophy Tower to Mainland Insurer-Backed Fund for Reported $1.5B

Houston-based developer Hines and the Abu Dhabi Investment Authority (ADIA) have divested a 60-storey skyscraper in downtown Shanghai to a fund backed by China Post Insurance in a deal said to value the project at as much as RMB 10.9 billion ($1.5 billion) amid China’s real estate downturn.

China Post Insurance announced last month that it had subscribed  as the leading investor in a fund that now owns One Museum Place, a 183,000 square metre (1.97 million square foot) office project near Shanghai’s West Nanjing Road commercial strip, with the life insurance arm of the mainland postal operator hailing the deal as its first cooperation with “a Middle East sovereign investment institution”.

Hines and ADIA sold the building to a RMB fund established and managed by China Merchants Bank, with China Post Insurance taking a 50 percent stake in the vehicle, according to market sources who spoke with Mingtiandi. As part of the deal, ADIA which previously held majority-ownership in the property, is retaining partial ownership in the tower by taking an estimated 30 percent to 40 percent slice of the new fund. Some smaller insurance companies are said to hold around 10 percent of new vehicle while Hines will continue to manage the asset.

Hines and ADIA both declined to comment on the transaction and China Post Insurance removed its announcement of the deal from its corporate WeChat account following inquiries by Mingtiandi.

90% Occupied, Sold at a Discount

The China Post Insurance-backed fund acquired the Gensler-designed tower at a unit price of between RMB 60,000 and RMB 70,000 per square metre, according to market sources, with the rate said to represent around a 20 percent discount from the asking price when Hines and ADIA first put One Museum Place on the market more than one year ago.

Located one metro stop north of West Nanjing Road, the 260-metre high landmark is approximately 90 percent occupied, with Guotai Junan Securities as its anchor tenant. At the stated compensation, Hines and ADIA sold the asset at a 4.5 percent capitalisation rate.

Other tenants in the LEED Platinum building include global pharmaceutical firm Pfizer, Gensler and a subsidiary of Chinese tech firm Tencent, according to Hines’ and ADIA’s websites.

Located next to the Shanghai Natural History Museum and Jing An Sculpture Park, One Museum Place has 134,000 square metres of office space by gross floor area, as well as 22,000 square metres of retail, and connects to the city’s Metro Line 13.

Hines outbid Beijing-based Soho China to acquire the site for One Museum Place in 2013 for RMB 3.7 billion and held the grand opening for the project in September 2019.

Insurers Dominate

Mainland China’s first billion-dollar real estate deal of 2025 underlines the role of insurers as the primary buyers of assets in a market deserted by other investors.

Grade A office rents in Shanghai, the country’s biggest commercial hub and traditionally its strongest real estate market, fell 15.3 percent in the fourth quarter of 2024 from the same period a year earlier, according to JLL.

With office vacancy across Shanghai rising to approximately 30 percent, foreign investors and local private fund managers have largely stopped investing in commercial real estate, leaving insurers the primary source of capital.

In May last year, ZhongAn Online P&C Insurance, an online insurer backed by Ant Financial, Tencent and Ping An, agreed to purchase a pair of office buildings on Shanghai’s Bund waterfront from a joint venture controlled by New York’s Rockefeller Group for RMB 1.44 billion.

Last January, AIA Life Insurance snatched up a 95 percent interest in a RMB 2.4 billion ($340 million) Beijing office building from Singapore’s CapitaLand Investment after the Singaporean player had acquired the Chaoyang district tower in a distressed sale.