China Life Buys Kowloon Office Tower From Wheelock for $755M

Mainland insurer China Life Insurance set a new record for purchase of a commercial property in Hong Kong’s Kowloon area by purchasing two buildings currently under development at Wheelock and Company’s One Harbourgate complex for HK$5.86 billion ($755 million).

The Hong Kong acquisition is part of more than $2.87 billion in cross border real estate investments for China Life in the last two years, as the Chinese state-owned insurance giant helps lead a wave of overseas deals by mainland insurers seeking to diversify their portfolios.

The deal also will provide a new regional home for China Life in Hong Kong with the Beijing-based firm now planning to make One Harbourgate the headquarters for China Life Insurance (Overseas) Company Ltd, its offshore subsidiary.

Mainland Insurer Acquires 15-Storey Office Tower with Matching Mall

According to a statement from the two companies, China Life Insurance (Overseas) Company Limited signed an agreement with Wheelock to purchase the 15-storey west office tower, along with an attached shopping area, in an en-bloc transaction that makes China Life the owner of half of the One HarbourGate complex.

“We are glad to purchase One HarbourGate, which is our brand-new flagship property in Kowloon. This is a milestone for CLIO which shows China Life Group’s confidence in the Hong Kong market,” Liu An Lin, Deputy Chairman and President of CLIO, commented in a statement.

The west office tower totals 357,000 square feet (33,100 square metres) of gross floor area, and the attached two-storey shopping centre adds 36,000 square feet (3,300 square metres) of retail space. The One Harbourgate project, which Wheelock expects to complete by the end of 2016, comprises two Grade-A office towers and two retail areas providing a total gross area of 675,000 square feet.

Wheelock had been actively marketing One Harbourgate since at least early this year. During 2014 the developer sold the 21-storey East Tower in Kowloon to Citigroup for HK$5.425 billion ($699.86 million) in what was estimated at the time to be the largest single-block office transaction in Hong Kong ever.

China Life Moves Up Ranks of Mainland Investors

China Life’s Kowloon deal follows soon after the insurer took a $1 billion stake in a US logistics portfolio being acquired by Singapore’s Global Logistics Properties in a $4.55 billion deal.

Prior to this logistic investment, China Life had joined with mainland rival Ping An Insurance to each invest a reported $167 million in a $500 million mixed-used project being developed by Tishman Speyer in Boston.

These two 2015 deals were preceded last year by China Life taking a 70 percent stake in the £795 million (US$1.35 billion) acquisition of a 93,000 square metre (1 million square foot) office building on London’s Canary Wharf.

Together, China Life’s cross-border property investments total $2.87 billion to date, making it the third largest mainland investor in international property, behind only sovereign wealth funds CIC and Gingko Tree, according to figures compiled by Mingtiandi.

Wheelock Bets Big On Kowloon

Wheelock, which is controlled by the family of Hong Kong tycoon Peter Woo, who also runs developer Wharf, has bet heavily on commercial property in Kowloon.

“One HarbourGate is perfectly located in a premier commercial hub along the world-renowned waterfront, enjoying the panoramic seaview of Victoria Harbour. We are delighted that China Life has shown their confidence in Hong Kong and WAC by acquiring the West Office Tower and West Retail Villa of One HarbourGate as the strategic base of their operation in Hong Kong, and as one of the major investment in their global portfolio,” said Wheelock chairman Douglas Woo.

In addition to One Harbourgate, which is located at 18 Hung Luen Road in Kowloon’s Hung Hom area, Wheelock’s portfolio includes the newly completed One Bay East, Wharf T&T Square, and the Kowloon Godown at Kai Hing Road.