Chinese insurer buys London's Tower Place for €427m

China's Ping An Life Insurance has acquired Tower Place in the City of London from Deutsche Asset & Wealth Management’s (DeAWM) real estate investment business for £327 mln (€427 mln).

The price represents a 15% premium to the asset's latest appraised value of €370 mln at end-September 2014 and reflects a yield of 4.9%.

The London office, designed by Sir Norman Foster, was acquired in September 2003 and comprises 385,000 sq ft (34,930 m2) of space. The key tenant is international consultancy Marsh & McLennan Companies. The building generates a gross annual rent of €21.3 mln and has a remaining lease term of 13.3 years.

The asset was held by DeAWM's €4.1 bn grundbesitz europa open-ended real estate fund which owns a portfolio of 49 properties, 39 of which are outside Germany including six in the UK.

'We have owned this property since 2003 and it has outperformed our expectations,' said James Petit, head of real estate for the UK and Ireland at DeAWM. He added: 'Selling has allowed us to capitalise on the interest in London and we will now refresh and rebalance the fund’s UK portfolio. We are already looking at a substitute target asset.'

The acquisition is the second by Ping An in London following the purchase of the landmark City headquarters of insurer Lloyd's of London in 2013 for £260 mln. Gaw Capital Partners, the Hong Kong-based real estate private equity firm, acted for Ping An Insurance on the transaction.