Ping An buys home of Lloyd's

The sign over a branch of Lloyd's TSB is seen in London. A Chinese insurance company is reported to have bought the office of Lloyd's in London. [Photo/Provided to China Daily]

One of China's largest insurance companies has agreed to buy the London building of the Lloyd's, home of the Lloyd's insurance market, for 260 million pounds ($388 million).

This is the first large-scale property investment by a Chinese insurance company in London.

The news was announced on Monday by Commerz Real, which is fully owned by Germany's Commerz Bank AG.

Commerz Real bought the freehold building in 2005 through a closed-end single-asset fund it owned.

Although Commerz Real did not identify the Chinese buyer, it is believed that Ping An Insurance (Group) Co of China Ltd, China's second-largest life insurer by policyholders, is the buyer.

The Times of London on April 10 reported that Ping An was considering such a deal.

Sheng Ruisheng, spokesman for Ping An, said on Monday that Ping An could not comment on any specific deal.

Ping An Insurance was established in 1988 in Shenzhen, Guangdong. It was the first insurance company in China to have a shareholding structure.

In April, Ping An appeared in the latest Global 2000 Leading Companies list published by Forbes Magazine for the ninth time, rising to 83rd place from 100th.

This ranking was based on its size, revenue, profit and market value. Ping An is the only Chinese corporation in the list ranked under the diversified insurance corporation category.

According to the company's website, Ping An's vision is to become a global leading integrated financial services group by leveraging its insurance, banking and investment businesses to achieve long-term, stable and healthy growth.

The landmark property was completed in 1986 and is located in the City of London office market. Lloyd's sold the freehold in 1996, although the property is leased to Lloyd's until 2031, said a company spokesperson.

In 2005, the building's freehold was purchased by Commerz Real for 231 million pounds from DekaBank, the German Savings Bank Finance Group's central asset manager, which bought the freehold from Lloyd's in 1996.

Commerz Real originally planned to hold the asset for 11.5 years, but last September, its investors granted the fund's management the right to sell the property if there was a concrete opportunity.

"The development of London's real estate market and the high level of demand for high-quality office space in top locations offered the ideal prerequisites for a sale of the building at the current point in time," Commerz Real management board member Roland Holschuh said in a statement.

Michael Kohl, managing director of Commerz Real Fonds Beteiligungsgesellschaft mbH, said the transaction means investors in the fund can book a liquidation result of some 114 percent eight years after investment.

The Lloyd's deal is the latest of a series of property investments by Chinese developers in London.

Dalian Wanda Group, which is controlled by billionaire Wang Jianlin, announced last month that it is investing 1 billion pounds in a London site, where it will build Western Europe's tallest residential tower.

ABP (China) Holdings Group Ltd, a Beijing-based Chinese developer, in May signed an agreement with London officials to transform a 14-hectare site at Royal Albert Dock into the capital's third business district after the City of London and Canary Wharf.

London Mayor Boris Johnson said the ABP project is expected to create 20,000 jobs.

Chinese investment in Britain amounted to $8 billion last year, according to China's embassy in London.