Hanwha insurance arms net $75 mn from City of London property sale

Two insurance units of South Korea’s Hanwha Group have earned about £57.4 million ($75 million) in capital gains from its £159.2 million investment in a prime office building in the City of London which was recently sold to a Singapore-listed property developer for a total of £650 million.

A tripartite joint venture of the Hanwha insurance arms, AXA Investment Managers and Gingko Tree Investment Ltd., a unit of China’s foreign exchange administration, completed the sale of Ropemaker Place to Ho Bee Land on June 15, according to investment banking sources and AXA Investment Managers.

The three investing groups had acquired the 21-story building for £477.7 million in March 2013, equally paying £159.2 million.

They didn’t borrow for the transaction in order to beef up returns.

Hanwha Life Insurance Co. Ltd. and Hanwha General Insurance Co. Ltd. had participated in the acquisition of Ropemaker Place via a fund of Seoul-based IGIS Asset Management Co. Ltd. Hanwha Life took a huge chunk of the investment with a 98.1% stake in the fund vehicle.

The investment by both Hanwha insurers was currency hedged, so little affected by the decline of the British pound since the Brexit decision in 2016, the sources added.

Tenants of the 56,000-square-meter building include Macquarie Bank, Mitsubishi UFJ Securities, the Bank of Tokyo-Mitsubishi UFJ and IHS Markit.

The exit came shortly after two South Korean financial services firms - Mirae Asset Financial Group and Korea Investment & Securities Co. Ltd. - acquired prime office buildings in the City of London for £340 million and £200.5 million, respectively