China’s scandal-racked Anbang Insurance is reportedly preparing to sell a Vancouver office complex which it purchased for over C$1 billion ($730 million) in 2016 as the Beijing-based insurer continues to unwind its overseas holdings.
Anbang is currently in talks with Canadian banks and commercial realtors regarding a potential sale of the four buildings that it owns in the Bentall Centre office complex, according to sources cited in an account in The Globe and Mail, paving the way for the disposal of an asset which brokerage Cushman & Wakefield has called Vancouver’s most valuable commercial property.
The Canadian newspaper account was the second report regarding disposals of North American assets by Anbang last week, and comes six months after the company’s founder and former chairman Wu Xiaohui was sentenced by a Chinese court to 18 years in prison for fraud and embezzlement.
First of Anbang’s Canadian Assets Ready for Sale
Should Anbang follow through on the reported Canadian discussions, it would make for the company’s first disposal of a Canadian real estate asset, after Anbang had spent an estimated $1.96 billion buying offices and retirement homes in the North American nation from 2015 through 2017.
Anbang first spent a reported $476 million buying a 66 percent stake in its set of four Bentall Centre buildings from Canada’s Ivanhoé Cambridge in February 2016. The Beijing-based firm then followed up in May of that year by purchasing the remaining 34 percent holding in the buildings, which together were valued at $730 million, from a subsidiary of Canada’s Great-West Life Assurance Company.
In July of this year, Anbang was reported to be planning to offload its entire portfolio of overseas real estate assets, worth an estimated $10 billion, as Chinese government regulators took over control of what was once one of China’s largest privately-held insurers, following Wu’s detention and later trial.
$1.96B Canadian Portfolio Could Be on the Block
Anbang’s Canadian news surfaced just days after a Bloomberg report said that the mainland insurer, which spent more than $30 billion on an acquisition spree that included the $1.95 billion purchase of New York’s Waldorf Astoria hotel in late 2014, has hired Bank of America to help sell a portfolio of US luxury hotels worth some $5.5 billion.
The insurer run by former Wenzhou businessman Wu Xiaohui made its first Canadian acquisition about one year after buying the Waldorf Astoria, when it bought the HSBC building in Toronto for $84.2 million in October 2015.
The Bentall Centre was Anbang’s second major acquisition in Canada and the insurer headed back to the land of hockey and jumper cables again that same year when it purchased another Toronto office tower for C$530 million.
The insurer travelled again to Vancouver in late 2016 to negotiate the acquisition of Retirement Concepts, one of British Columbia’s largest senior care operators, before finalising the controversial purchase in early 2017 for an estimated C$1 billion.
Bailed, Then Jailed
The Chinese government announced a $10 billion bailout of Anbang in April of this year, before sentencing Wu Xiaohui in May and putting the insurer under the control of the China Insurance Regulatory Commission (CIRC) in June.
Wu Xiaohui’s detention, along with Anbang’s asset sales, are perhaps the most dramatic reversal for a set of mainland mega-investors, including HNA Group, Greenland Group and Dalian Wanda Group, who had seized global attention with billions of dollars in property investments in the middle years of the decade. In the past eighteen months these players have all been forced to begin selling off those assets in the face of a government crackdown on excessive leverage and capital outflows.
HNA, which has sold nearly RMB 300 billion in assets since the beginning of this year, was said last month to be shopping a list of $11 billion in properties to potential investors, including nine overseas assets held by the Hainan-based conglomerate. According to chairman Chen Feng, the group plans to sell more assets in the near future.
Dalian Wanda Group, which has sold off domestic business units outside of its core real estate expertise this year, last week was revealed to have sold off one of its last overseas properties in what once was a $5 billion overseas real estate portfolio.
Anbang had already entered into a joint venture with Sino-Ocean Land in May of this year that gave the state-owned mainland developer control over a joint venture company that would take over at least some of the insurer’s real estate assets in China.