Asian investors, including insurers and banks, are buying into European properties as a way to diversify their portfolios as they seek steady yield of between 5-6 percent.

"There is definitely a growing demand from Asian institutional investors in safe commercial and residential real estate purchases abroad," said Christina Gaw, managing principal and head of capital markets at Gaw Capital.

The purchase of Waterside House in Paddington, which has 237,800 square feet office space, would make it Gaw Capital's fourth property deal in London this year.

The formerly run-down Paddington area is being redeveloped to include, construction of a rail line to cross London and new hotels and retail properties. The building was designed by architect Richard Rogers, who also designed the Lloyds of London Building and the Pompidou Centre in Paris.

China's Ping An Insurance Group in July acquired the Lloyds of London Building, the first direct overseas property acquisition by a mainland China insurance company and a deal in which Gaw Capital was an advisor.

Gaw Capital was joined in the Waterside acquisition by the Korean Federation of Community Credit Cooperatives, Suhyup Bank and Hyundai Securities, according to a source with direct knowledge of the matter. Gaw Capital announced the deal in a statement on Wednesday without disclosing details.

The seller of Waterside was D2 Private, an Irish property investment company, the source added.

The source could not be named because details of the deal were private.

Gaw, which has $7.1 billion in assets under management, recently launched Gaw Capital Partners USA to raise up to $500 million to invest in U.S. commercial real estate. The firm last month said it has raised a $1.025 billion real estate fund for investment in China.

(Editing by Matt Driskill)

By Stephen Aldred and Denny Thomas