The Tower Place in London would soon see itself with a new owner. China's second top insurance company, Ping An Insurance Company of China Ltd., was said to have bought the property through private equity firm Gaw Capital Partners.
A representative from the private equity firm has confirmed the deal via an email statement. While no details of the deal were provided, a report by Reuters said that the Chinese company has acquired the London landmark from Deutsche Asset & Wealth Management for the price of £327 million ($490.04 million).
Located in the heart of London's EC3 insurance district, The Tower Place has a floor area of 35,700 square meters. Its major tenant is Marsh & McLennan, a major U.S. insurance firm, which has made the property its headquarters in the U.K.
The building is not the first property Gaw Capital has acquired for the Chinese insurer. In 2013, Ping An also bought Lloyd's Building through the firm for a price of £260 million.
Ping An's acquisition of the property marks the growing trend of Chinese insurance firms buying overseas real estate ever since China's industry regulators allowed financial companies to invest outside the country.
Insurance firms have turned outward in making use of their excess capital and it is showing in the increasing acquisition of foreign real estate.
While the appeal of overseas properties to Chinese companies has risen in the past years, the yields of these properties remain lower than their Chinese counterparts, said Song Ding, Tourism and Real Estate Director of China Development Institute.
However, it proves to be a stable and sure yield as opposed to the 20-30 percent in China, which remains shaky.
In 2014, the local insurance industry's assets were reported to be at 10 trillion yuan, said Vice Chairman Zhou Yanli from the China Insurance Regulatory Commission.
Meanwhile, overseas investments of local insurance firms were at $24 billion; 20 percent of these are in real estate, while the rest are made of stocks and equity products.
According to Song, "gaining money is not the top priority for cash-rich Chinese insurers, who are actually trying to find a safe place to take care of their abundant capital."
In 2014, another top Chinese insurance firm, China Life Insurance Co., acquired a property in the Canary Wharf in London for the price of £795 million.