The Chinese state-owned insurance group China Life Insurance has agreed to acquire a commercial property in Hong Kong from the property developer Wheelock & Co in one of the largest single-asset deals in the island city’s office sector in recent years.
The insurance group via China Life Insurance (Overseas), its wholly-owned subsidiary, has reportedly invested HK$5.8 billion (€700 million; $755 million) to acquire an en bloc office tower and the adjoining retail area at One HarbourGate complex in Hong Hom in the Kowloon district of Hong Kong.
The two properties are currently under development and once completed, the office tower would serve as China Life Insurance (Overseas) headquarters, according to multiple news reports.
The 15-storey West Office Tower is spread over a 357,000 square feet area while the attached retain portion totals about 36,000 square feet of gross area.
John Davies, executive director of institutional investment properties, CBRE Hong Kong, told PERE that on the assumption that the market rent for the commercial properties in the city is HKD40 and looking at the price, the yield should be 3.5 percent to 4 percent, if China Life Insurance rents it themselves.
Last year, Wheelock was part of another landmark property transaction in Hong Kong when it sold the East Tower in Kowloon to Citigroup, who reportedly paid HK$5.4 billion with plans of making the building its new headquarters by 2016.