Chinese investors have won probably the most important commercial real estate auctions in Vancouver history, swooping in to grab a controlling interest in all towers of the Bentall Centre.
Mainland Chinese investors likely to be growing force in Canada’s real estate in 2016
Investment in real estate is anticipated to say no for the fourth straight year in 2016 despite the growing presence of Mainland Chinese investors available on the market, according to a brand new forecast.
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Sources confirmed to the Financial Post that Anbang Insurance Group Co. Ltd., a Beijing-based company having a reported US$114 billion in assets, is buying what comes down to a 66 percent stake in Bentall I, II, III and IV – a sprawling commercial 1.5-million-square-foot office complex, with some retail, in the middle of Vancouver.
It was reported in October that Ivanho Cambridge Inc., a subsidiary of Caisse de dp?t et placement du Qubec, was selling its stake in the four towers. The cost paid by Anbang values the entire complex at more than $1 billion, according to sources. The deal has not yet closed.
Anbang continues to be been surfing for more opportunities in Canada after paying $110 million this past year for a land lease of HSBC Building at 70 York St. Toronto. The Chinese company bought the land lease, which provides it ownership of the building for a set period of time, from Brookfield Office Properties with what was considered one of the highest recent valuations for a building in Toronto.
It’s an absolute jewel of the property
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 includes a slightly different ownership structure but Great West Life Assurance effectively controls 34 percent of the the 4 centres combined.
The deal continues to show the appetite of Chinese investors for that Canadian market, especially in Vancouver where concerns continue to rage about Asian buyers moving into the city’s residential market.
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Interest in Vancouver work place is not limited to just Asian investors. Attracted by the struggling loonie, European investors have also been eyeing the marketplace. German multi-billionaire Klaus-Michael Kuehne has been said to to have paid $400 million for Royal Centre, a 36-storey building at 1055 West Georgia Street, recently.
Ross Moore, a completely independent real estate consultant, said Chinese investor interest rates are probably in 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 larger offer Vancouver commercial history, once the four buildings are considered as one entity.
“It’s a complete jewel of a property,” said Moore, concerning the buildings which are relatively dated with the newest one built in 1981. “It’s a mature property but irreplaceable. It’s hard to beat the location. You’re sitting on surface 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 is constantly on the drive curiosity about commercial real estate, but the appeal of Vancouver can’t be ignored.
“It’s very hot and very strong. It’s a higher growth area having 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 secure haven in a safe financial system,” he explained.
Financial Post
gmarr@nationalpost.com
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