August 25, 2015 / 9:01 PM / 3 years ago

China's Anbang Insurance in talks to buy first Canadian office tower -sources

MONTREAL, Aug 25 (Reuters) - China’s Anbang Insurance Group Co has made a firm offer to buy an office tower in Toronto’s financial district, three real estate sources said, in its first Canadian building acquisition.

Anbang, which closed a deal to buy New York City’s historic Waldorf Astoria hotel for $1.9 billion earlier this year, is conducting due dilligence on the acquisition of 70 York Street, a 17-story building in Toronto’s financial district, said the sources, who spoke on condition of anonymity.

The building, which has HSBC Bank Canada as a tenant, is owned by Brookfield Canada Office Properties.

A Brookfield spokesman, who declined to comment on a deal with Anbang, confirmed that the building was put up for sale earlier in the year.

A Beijing-based spokeswoman for Anbang declined to comment.

The value of the deal was not immediately known.

The building is on land owned by a separate company, which has a long-term lease with Brookfield and may have right of first refusal on any sale, two of the sources said.

Slowing urbanization and a weakening economy in China have pushed Chinese companies to diversify abroad.

According to data from U.S.-based Real Capital Analytics, Chinese investors acquired 36 large properties during the first half of 2015, including the Waldorf, up from 24 transactions during the same period a year earlier.

During a July conference call, Brookfield Canada Properties CEO Jan Sucharda told analysts that the company was “entertaining bids” for the office building.

“We are very encouraged by the interest in the property,” he said. “We would hope that we would conclude a transaction on that in late Q3. ($1 = 1.3163 Canadian dollars) (Additional reporting by Solarina Ho and John Tilak in Toronto and Shu Zhang in Beijing; Editing by Steve Orlofsky)

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