China’s Anbang Insurance expanded its growing portfolio of real estate assets to include Canada this month by outbidding at least ten Canadian competitors to purchase an office tower in Toronto for a reported C$110 million ($84.2 million).
Anbang, which leapt to the forefront of China’s wave of cross-border real estate investors last year with the $1.95 billion acquisition of New York’s Waldorf Astoria hotel, has now become one of the first major mainland companies to acquire a large commercial property asset in Canada.
The decision by the Chinese insurer to look for opportunities in Canada’s commercial capital comes after overseas real estate investment from China set a new record by surpassing $14 billion during the first three quarters of 2015.
A Sliding Loonie Making Canada Attractive
Anbang purchased the 17-storey tower at 70 York Street in Toronto’s financial district from Canadian alternative investment firm Brookfield Asset Management, according to an account in the Financial Times. The acquisition of the 225,000-square-foot (20,900-square-meter) tower, known as the HSBC Building, is believed to be the first major investment in a stabilised real estate asset in Canada by a Chinese investor.
In 2014, Shanghai-based Greenland Group became the first major Chinese real estate investor in Canada when it acquired a residential development project in Toronto with plans to build a $360 million complex there.
Even after the Chinese currency’s recent devaluation against the US dollar, a slide in the value of the Canadian dollar against the Chinese yuan makes property assets in Canada look more affordable after the Loonie lost 13.7 percent of its value against the yuan in the last 12 months.
Anbang Makes Third Overseas Real Estate Deal
The Toronto deal follows after Anbang spent $415 million this May to buy the 26-storey Merrill Lynch Financial Center on New York’s Fifth Avenue. Last month the insurer reportedly dropped its £750 million ($1.16 billion) bid for London’s landmark Heron Tower.
According to sources cited in the Canadian press, Anbang has privately told real estate industry insiders that it is ready to invest another $1 billion in Canada and is looking for more acquisitions.
Chinese overseas investment globally reached a new record of $14.4 billion this year, led by deals in the US and Australia. Acquisitions in the UK, however, appear set to fall far short of last year’s figures.
For deals of $50 million and above, total investments by Chinese companies into UK real estate amount to more than $1.48 billion through the end of September, according to data compiled by Mingtiandi. In 2014, the United Kingdom attracted over $3.24 billion for the entire year.
By comparison, Chinese investments of $50 million or more into US real estate in 2015 have now reached $3.75 billion, already surpassing last year’s total of $3.68 billion.