China Insurer Ping An Reportedly Buys Lloyd’s of London Building

on Jul 8, 2013
Listen, Monday, July 8th: China’s Ping An Insurance Group (HKG:2318, SHA:601318) has reportedly acquired the Lloyd’s of London building, home of the Lloyd’s insurance market, for £260 million. The transaction, which is the first real estate purchase by a Chinese insurer in the UK, underscores a growing trend among Chinese companies to invest in London property. Ping An’s share price closed nearly two percent lower in Asian trading today.

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**Landmark London Property**
UK-based property broker Savills Plc (LON:SVS) said in a statement today that a German fund managed by Commerz Real had sold the Lloyd’s Building at One Lime Street to a leading Chinese insurer. While Savills did not disclose the identity of the buyer, Reuters quoted several sources familiar with the transaction as naming Ping An Insurance Group. Savills’ share price rose in intraday trading in London today.

The Lloyds of London building was designed by architect Richard Rogers and opened in 1986. Commerz Real bought the landmark building, home to the world’s leading insurance market, for £231 million in 2005, with Lloyd’s lease on the site expiring in 2031. The building is noted for its futuristic design, with some of its service features such as pipes located on the exterior.

“This is a potentially landmark transaction, given it is the first by a Chinese Insurance company overseas,” Jon Crossfield, director within Savills’ Central London team, said in the statement. “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.”

**London Property Interest**
As Bloomberg noted in its coverage of the news, an increasing number of companies are investing in London property, with the city emerging as a haven for foreign wealth with sterling’s decline. Last month, Chinese developer Dalian Wanda Group said that it was investing £1 billion in a London site to build
Western Europe’s tallest residential tower. In May, another Chinese developer, ABP (China) Holdings Group Ltd, signed an agreement with London officials to transform the 35-acre site at Royal Albert Dock into the capital’s third business district after the City of London and Canary Wharf.

As Reuters noted, regulatory changes easing restrictions on companies from mainland China to invest in real estate overseas are also set to facilitate property investment in London and in other European cities such as Paris and Frankfurt.
“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,” noted Humbert Pang, Managing Principal and Head of China of Gaw Capital Partners, which advised on the sale.
!m[Chinese Companies Show Growing Interest in London Property Investment](/uploads/story/3763/thumbs/pic1_inline.jpg)
Roland Holschuh, a board member of Commerz Real, commented that the current liquidity and investor demand within the London market presented an ideal time for the asset management fund “to seek an exit in line with our original business plan”.
**Savills’ share price was 0.84 percent up at 600.00p in London as of 13:36 BST on 8 July 2013. Ping An’s share price closed 1.80 percent lower at HK$49.05 in Hong Kong and was 1.97 percent down at 33.83 yuan in Shanghai.**


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