AIA eyes more property assets in mainland China to house operations as insurance business charts strong growth
- AIA is set to reopen its new-look headquarters in Hong Kong, after spending five years to redevelop the 50-year old building in Wan Chai
- AIA has bought properties in Beijing and Shanghai since late 2022, backed by strong cash flow and new business volume
AIA Group, Asia’s biggest publicly traded insurer, is looking to own more properties in mainland China to consolidate its operations, picking an opportune time when a two-year slump has rendered asset prices “affordable” to long-term investors.
The insurer will be looking to own premium office buildings in key growth cities like Beijing, Guangzhou and Shenzhen, after an economic slowdown that started in 2022 led to a spike in vacancy rates in commercial properties last year. The plan will add to its recent acquisitions in Shanghai.
“Property prices are affordable and we have strong cash flow, which enables us to invest in office buildings for our own use,” chairman Edmund Tse Sze-wing said at a media briefing in Hong Kong. “China is one of our major markets, we are not short-term investors.”
AIA took five years to redevelop its headquarters in Hong Kong, turning the 50-year old building in Wan Chai into a modern structure to prevent wastage and keep up with new environmental and energy demands. The insurer will unveil its new-look tower on 1 Stubbs Road on Monday.
AIA paid 2.4 billion yuan (US$337.5 million) in January to acquire a 95 per cent share in the Capital Square Beijing building in Chaoyang district. It followed the purchase of a 90 per cent share in a commercial complex in Shanghai’s North Bund, now renamed AIA Financial Centre, for 5 billion yuan in December 2022.
