Nicolas Moreau, chair and head of Deutsche Asset Management
Deutsche Asset Management has sold Xiwang Tower, a grade A office building in the northeastern Chinese city of Dalian, to mainland financial services giant China Life. The asset management arm of Deutsche Bank disposed of the 40-storey, grade A tower on behalf of one of its European funds, grundbesitz global.
Although financial terms of the deal were not disclosed, the property’s appraised market value as of last December was 151.3 million euros ($182 million). Constructed in 1999 but not opened until 2007, Xiwang Tower at 136 Zhongshan Road has 67,688 square metres of lettable area.
Deutsche AM has occupied the Minoru Yamasaki-designed tower since acquiring it in 2008 for RMB 1.05 billion. The arm of Germany’s Deutsche Bank Group invested to upgrade the building in Dalian’s downtown business district – removing asbestos and curbing energy consumption, among other improvements – and boosted occupancy from 55 percent at the time of purchase to the present rate of 94 percent.
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“This demonstrates our ability to transact in China and is a positive outcome for our investors,” said Victoria Sharpe, the company’s head of alternatives, Asia Pacific in a statement.
Sharpe joined the New York-based financial firm in 2016, tasked with expanding its business in Asia Pacific. Last October, the asset management firm hired Alex Prout from Morgan Stanley Investment Management to head up its overall business in Asia Pacific.
Deutsche AM’s real estate investment arm has some $53.5 billion of property assets under management worldwide, including $5 billion in Asia Pacific. The firm’s investment strategy is focussed on core and core-plus assets, with office properties forming almost half of the total portfolio.
Reuters reported that asset management firm BlackRock, billionaire investor George Soros and Singaporean sovereign wealth fund Temasek are eyeing stakes in the firm’s upcoming IPO. Deutsche Bank is finalising plans and seeking anchor investors for the estimated $1.9 billion to $2.5 billion offering on the Frankfurt Stock Exchange.
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Xiwang Tower in Dalian is 94 percent occupied
State-owned China Life, which is ranked No 51 on the Fortune Global 500 list, has some $483 million in assets and is an active player in domestic and overseas real estate markets. The state-owned insurance and financial services firm bought a 95 percent stake in a portfolio of US logistics and other assets valued at $950 million last May.
Aside from its logistics buy, the top five mainland insurer has been active in a variety of asset categories. In October 2016, the company led the acquisition of a $2 billion stake in a portfolio of US hotels from Starwood Capital Group.
Closer to home, China Life Insurance agreed last December to purchase a nearly 50 percent interest in a portfolio of prime shopping mall and office projects in Shanghai – forming part of the Ruihong Xincheng project in Hongkou district – from Shui On Land for RMB 4.16 billion yuan ($630 million).
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