Chinese insurance company buys iconic Lloyds building in London
A Chinese company has bought one of London’s landmark building ins a deal which experts expect to be the first of many.
With less money around for major commercial purchases it is believed that the Chinese are eager to buy iconic buildings that make sound real estate investment sense.
Chinese insurer Ping An has bought the Lloyds building in London for £260 million and analysts say it is the first in a predicted wave of property deals by Chinese companies in London.
A German fund managed by Commerz Real, part of Commerzbank, sold the building to the Chinese company in a deal that represents a rental yield of 6.1%, broker Savills said in a statement.
Regulatory changes that ease restrictions on mainland Chinese companies investing in overseas real estate are set to add to the flood of money targeting the best real estate in London and other European cities like Paris and Frankfurt.
The Lloyds of London building, which is protected under British heritage laws, was designed by architect Richard Rogers. Its air ducts and lifts are on the outside of the building, in similar fashion to the Centre Pompidou in Paris, which Rogers designed with Renzo Piano, the man more recently behind London's Shard tower.
Savills said that the sale represents the first purchase by a Chinese insurance company in the UK.
The Lloyds Building is home to the world’s leading insurance market and let in its entirety to the Society of Lloyds on a lease expiring in 2031. Commerz Real purchased the building in 2005 for £231 million.
‘This is a potentially landmark transaction, given it is the first by a Chinese Insurance company overseas. It is a high profile and confident entry to the market for them and further illustrates the dominance of overseas investors in London at present,’ said Jon Crossfield, director within Savills’ central London team.
Roland Holschuh, the member of the Management Board of Commerz Real AG responsible for the real estate business, described the transaction as a major success for the firm’s investors.
‘The current liquidity and investor demand within the London market presented an ideal time for us to seek an exit in line with our original business plan,’ he added.
Humbert Pang, Managing Principal and Head of China of Gaw Capital Partners, said that as an active player in the real estate market in China, Gaw Capital Partners is seeing more opportunities to assist Chinese Institutional Investors going overseas.
‘The key for a successful overseas investment lies in the asset management capability and relationship management in both local and overseas markets,’ he added.
