July 8 (Bloomberg) -- Ping An Insurance Group Co., China’s second-largest insurer, agreed to buy the Lloyd’s of London building from a Commerz Real AG-managed fund, two people with knowledge of the transaction said.
A Chinese insurer is purchasing the home of the Lloyd’s insurance market for 260 million pounds ($388 million), London-based property broker Savills Plc said in a statement today without naming the buyer. The deal requires regulatory approval, according to one of the people. Both asked not to be identified because the purchaser hasn’t publicly been named.
London “seems to be one of those global markets that everyone in the world is interested in and it seems only natural that Chinese investors would view it similarly,” said Michael Klibaner, head of Greater China research at broker Jones Lang LaSalle Inc. “It’s kind of just saying ‘We arrived.’”
The Chinese government in October made it easier for its insurers to buy real estate and other assets outside the country, including London and New York. Chinese investors may spend $5 billion buying overseas real estate this year, 25 percent more than in 2012, Jones Lang predicted.
“Asset management is one of Ping An’s major businesses, which includes the investment and management of insurance and third-party capital domestically and abroad,” the insurer based in Shenzhen, in southern China, said in an e-mail today, declining to specify its investments.
Commerz Real bought the building at One Lime Street, near the Bank of England in the City of London borough, for 231 million pounds in 2005. The property, designed by Richard Rogers, opened in 1986 and has been called the Inside-Out Building because elevators, ducts, pipes and other elements are on the outside. It’s leased to the Society of Lloyd’s until 2031, Savills said.
Lloyd’s, founded in a London coffee house in the 1680s, is the world’s oldest insurance market.
“The current liquidity and investor demand within the London market presented an ideal time for us to seek an exit,” Roland Holschuh, a member of Commerz Real’s management board, said in the statement.
Several Chinese companies have announced significant investments in London real estate in recent weeks. Dalian Wanda Group, the developer controlled by billionaire Wang Jianlin, announced last month that it will invest in a London site to build Western Europe’s tallest residential tower.
ABP (China) Holdings Group Ltd., a Beijing-based developer, in May signed an agreement with London officials to transform the 35-acre (14-hectare) site at Royal Albert Dock into the capital’s third business district after the City of London and Canary Wharf.
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