China Life Insurance buys Hong Kong office tower for HK$5.85 billion

PUBLISHED : Thursday, 12 November, 2015, 7:56pm
UPDATED : Thursday, 12 November, 2015, 7:56pm

China Life Insurance (Group) has agreed to buy an office tower with retail space in Hung Hom from Wheelock & Co for HK$5.85 billion, marking the largest single office-tower purchase in Kowloon district.

Property analysts said mainland finance companies and insurers would continue to be interested in purchases in Hong Kong and overseas.

“But it is unlikely to form a trend as properties available in Hong Kong are limited,” said Thomas Lam, the head of valuation and consultancy at Knight Frank.

China Life Insurance (Overseas) (CLIO), a wholly owned subsidiary of the mainland’s largest financial insurer, signed an agreement with Wheelock for the purchase of an en bloc office tower together with a two-storey retail block at One HarbourGate at Hung Luen Road, Hung Hom.

The property will serve as CLIO’s headquarters upon its completion by the end of next year. Construction commenced in December 2013.

One HarbourGate, enjoying a view of Victoria Harbour, will comprise two Grade-A office towers and two retail blocks.

CLIO has bought the 15-storey West Office Tower, totaling about 357,000 sq ft of gross area. The retail portion, known as West Retail Villa, totals about 36,000 sq ft of gross area.

Liu Anlin, deputy chairman and president of CLIO, said: “ This is a milestone for CLIO which shows China Life Group’s confidence in the Hong Kong market.”

Lam said that as China Life’s business expanded, it made sense that it needed more space.

“Mainland finance firms and insurers will continue to look for opportunities to buy properties overseas . Hong Kong is one of their targets,” he said.

However, finding suitable properties was a challenge because of the limited number of en bloc buildings available for sale. As they could not find any opportunities in Central , he said they had shifted focus to Kowloon.

Analysts said the office sector has benefited from mainland companies building up their presence in Hong Kong.

CBRE estimates demand for office space in the CBD will continue to be driven by mainland Chinese firms.

The vacancy rate for offices in Central fell to just 1.0 per cent in the third quarter, according to a CBRE report released last month.