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Chinese insurers make first US property investments

 The acquisition of a majority stake in a Boston project also marks the first time that the companies have co-invested in real estate outside of China.

China’s largest insurance companies, China Life Insurance Company and Ping An Insurance Company of China, are buying a majority stake in Tishman Speyer’s waterfront development project at Pier 4 in Boston’s Seaport District. The project represents the first time that both insurers have invested in US equity real estate.

China Life and Ping An both have made property investments outside of China. Ping An has purchased two landmark properties in London – Tower Place in January and the Lloyds Building in July 2013, while China Life led a group to buy an office tower in London’s Canary Wharf in June 2014. However, the Pier 4 deal marks the first time that both insurers have co-invested in real estate outside of China. 

China Life, through its subsidiary China Life Investment Holding Company, and Ping An, through its real estate investment arm, Ping An Real Estate Company, are investing alongside the New York-based developer’s Tishman Speyer Real Estate Venture VIII, which closed on $692 million in commitments in 2012. The value-added fund targets the repositioning, development and redevelopment of office properties in five primary US markets of New York, Washington, DC; Boston; Los Angeles and San Francisco; and the five secondary US markets of Chicago, Seattle, Atlanta, Houston and Miami. 

Terms of the deal were undisclosed, but China Life and Ping An will each own a one-third stake in the $500 million Pier 4 development, while the Tishman fund will claim the remaining third, according to a person familiar with the matter. Tishman also will serve as general partner and manager of the project. 

“Tishman Speyer has been an active investor and developer in China for more than a decade,” said Tishman Speyer co-CEO Rob Speyer, in a statement. “In that time, we have forged strong, productive relationships with both China Life and Ping An.” 

Tishman’s activities in China have included raising the first RMB Fund by a foreign developer, collecting 1.2 billion RMB solely from Chinese investors for a development project in Suzhou in 2012. The firm also closed on the Tishman Speyer China Fund in 2008, raising $884 million for the acquisition, development and management of real estate assets in the target markets of Shanghai, Tianjin and Chengdu. 

“Tishman Speyer is inevitably one of the best partners for China Life’s property investments in America. It is a good start for China Life, which will expand its real estate investing in America, and it will promote closer cooperation in our world,” said China Life Investment Holding. 

Added Ping An Real Estate: “Ping An and Tishman Speyer have previously conducted business together in China and we are confident that they will be a very good partner for us in our first foray into the United States real estate market.” 

In January, Tishman announced its plans to build a 13-story, 373,000-square-foot office building; a nine-story, 100-unit condominium building; and a three-level parking facility on the Pier 4 site. Construction is slated to start during the fourth quarter of this year, with completion expected by 2018.