Friday 20 April 2018

In Brief: MetLife expands office folio with Norwegian fund

International Commercial Property

Aerial view of the Chrysler Building (foreground) and the Met Life Building (rear) in midtown Manhattan 01 July 2007 in New York City. Phboto: STAN HONDA/AFP/Getty Images
Aerial view of the Chrysler Building (foreground) and the Met Life Building (rear) in midtown Manhattan 01 July 2007 in New York City. Phboto: STAN HONDA/AFP/Getty Images

Zachary Tracer

METLIFE, the largest US life insurer, expanded its real estate joint venture with Norway's sovereign wealth fund to $1.7bn (€1.25bn) with investments in San Francisco and Washington.

Norges Bank Investment Management and MetLife purchased a 12-storey office at 555 12th Street in north-west Washington, according to a statement.

The Norway fund, which oversees about $830bn, also purchased 47.5pc of a San Francisco property at 425 Market Street from the insurer. The gross value of the two buildings is about $1bn, according to a separate statement from the Norwegian fund.

MetLife and Norges Bank began the joint venture last month with a bet on One Financial Centre, a 46-storey Boston office tower.

The insurer has been working to attract institutional investors to a new asset-management unit as chief executive Steven Kandarian seeks to add fee income. The 782,000sq ft (72,700sqm) Washington office was acquired from Manulife Financial, Canada's largest insurer. The Toronto-based company, which provides coverage in the US through its John Hancock unit, sold the building for $505m, according to Ted Willcocks, global head of asset management.

The 36-storey San Francisco office is 945,000sq ft. That building and the Washington property are each about 85pc leased, according to the Norway fund's statement.

Norges Bank, which gets its funds from Norway's taxes on oil and gas, ownership of petroleum fields and dividends from its stake in Statoil ASA, made its first US property investment last year in a venture with TIAA-CREF. The first commitment to MetLife's asset-management push was a $5bn deal with SunTrust Banks for commercial mortgages.

Norges Bank paid $238m for a 47.5pc stake in the Boston tower, with MetLife owning the rest.

That values the property at about $500m. The $1.7bn figure includes $200m of financing, according to the statement from Norway's fund.

- Zachary Tracer (Bloomberg)


1,800 new homes for Wapping site

BERKELEY Group has won preliminary approval to build as many as 1,800 homes at the former UK base of News International unit in London's Wapping neighbourhood.

The project, known as London Dock, was approved late yesterday after a 4-to-3 vote by the Tower Hamlets borough council. Berkeley will also construct shops, office buildings and leisure facilities at the 15-acre site.

Home prices in Tower Hamlets rose 7.9pc to an average of £390,682 in the year through November, compared to a 10.6pc increase across London.

"Developers plan to complete about £7bn of additional homes in the borough through 2022," broker Knight Frank said.

News International previously used a complex on the Wapping site to produce newspapers including the London-based 'Times' and the 'News of the World'. They moved there from the traditional media hub on Fleet Street in 1986 and Rupert Murdoch used the transition to break the power of the unions.

- Neil Callanan (Bloomberg)

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