Chinese investors have won one of the most important commercial real estate auctions in Vancouver history, swooping in to grab a controlling interest in all four towers of the Bentall Centre.
Sources confirmed to the Financial Post that Anbang Insurance Group Co. Ltd., a Beijing-based company with a reported US$114 billion in assets, is buying what amounts to a 66 per cent stake in Bentall I, II, III and IV — a sprawling commercial 1.5-million-square-foot office complex, with some retail, in the heart of Vancouver.
It was reported in October that Ivanhoé Cambridge Inc., a subsidiary of Caisse de dépôt et placement du Québec, was selling its stake in the four towers. The price paid by Anbang values the entire complex at more than $1 billion, according to sources. The deal has not yet closed.
Anbang has been been looking for more opportunities in Canada after paying $110 million last year for a land lease of HSBC Building at 70 York St. Toronto. The Chinese company bought the land lease, which gives it ownership of the building for a set period of time, from Brookfield Office Properties in what was considered one of the highest recent valuations for a building in Toronto.
But the insurance company’s biggest North American splash was probably in 2014 when it bought the famed Waldorf Astoria in New York City for US$1.9 billion. Bentall Centre would be its largest foray into Canada — as it takes over the Ivanhoe stake. Each tower has a slightly different ownership structure but Great West Life Assurance effectively controls 34 per cent of the the four centres combined.
The deal continues to show the appetite of Chinese investors for the Canadian market, especially in Vancouver where concerns continue to rage about Asian buyers moving into the city’s residential market.
Interest in Vancouver office space has not been confined to just Asian investors. Attracted by the struggling loonie, European investors have also been eyeing the market. German multi-billionaire Klaus-Michael Kuehne is said to to have paid $400 million for Royal Centre, a 36-storey building at 1055 West Georgia Street, last month.
Ross Moore, an independent real estate consultant, said Chinese investor interest is probably at an all-time high. “We’ve seen it on the residential side but now it’s on the commercial side,” he said.
Moore said he can’t recall a bigger deal in Vancouver commercial history, when the four buildings are considered as one entity.
“It’s an absolute jewel of a property,” said Moore, about the buildings which are relatively dated with the newest one built in 1981. “It’s an older property but irreplaceable. It’s hard to beat the location. You are sitting on top of SkyTrain and tenants just love it. It always leases up. I’ve never seen significant vacancy, they are always full.”
Scott Chandler, senior vice-president of advisory and investment sales with Colliers International, said the weak Canadian dollar continues to drive interest in commercial real estate, but the appeal of Vancouver can’t be ignored.
“It’s very hot and very strong. It’s a high growth area with a large urban population and limited land. All this is driving up prices,” he said.
The appeal to Chinese investors is also pretty simple: “It’s a safe haven in a safe financial system,” he said.
News source: http://business.financialpost.com/news/property-post/chinese-investors-snag-vancouvers-biggest-real-estate-prize-all-four-towers-of-the-bentall-centre?__lsa=a29b-908f