China’s pursuit of London property continued this week, but this time from the other side of the Taiwan Straits, as Cathay Life Insurance purchased a building in the City of London for GBP 311 million ($516 million).
The Taiwanese life insurance firm reportedly purchased the nine-storey Woolgate Exchange office building on Basinghall Street from a partnership belonging to TPG Capital from the US and Canada’s Ivanhoe Cambridge just over a year after the partners acquired it.
The Woolgate Exchange deal is the latest in a series of megabuys from Chinese companies eager for the quick returns and safe environment that London’s market seems to offer, and could mark the beginning of a series of asset purchases by Taiwanese insurers.
North American Partners Turn 15 Percent Profit
Cathay Life’s taste for London real estate has helped the TPG-Ivanhoe team to turn a quick profit on the investment that it made in the 340,000 square foot (31,587 sqm), which was said to be fully occupied at the time of the sale.
TPG and Ivanhoe acquired the Exchange, which was constructed in 2000, during early 2013 for GBP 265 million pounds ($482 million).
Cathay Life Leading Taiwanese Insurer Wave
This acquisition by Cathay Life is a first for a Taiwan insurance firm, an industry which has only recently seen regulations on overseas investments loosened, just like their counterparts on the mainland.
In addition to Cathay Life’s purchase, competitors Fubon Life, Shin Kong Life and Nan Shan Life are all said to looking through the London market for the right opportunities, although the options for these companies are said to be limited to taking 100 percent ownership of en bloc assets.
During the past year, the mainland’s insurance firms have also been busy buying up buildings in London, most recently with China Life teaming up with an investment firm belonging to the Qatari government to buy an office building along London’s Canary Wharf for GBP 795 million (US$1.35 billion).
In July 2013, China’s Ping An Group bought the Lloyd’s Building in London for GBP 260 million ($442 million), and the country’s government investment funds have also been active in England, with Gingko Tree Investments teaming up with the UK’s Crown Estate this month to purchase a shopping centre for $576.76 million, and CIC buying an office park in London from Blackstone for $1.28 billion.
Last April, Taiwan’s Financial Supervisory Commission lifted the restriction on the island’s insurance companies acquiring overseas commercial property, and the mainland made similar changes in 2012.