China’s largest insurance group, Ping An, has entered the country’s emerging rental housing market through a strategic cooperation agreement with Landsea Green Properties, according to a stock exchange filing by the real estate group.
The move followed a closed-door annual central economic work conference held in December 2017, in which China’s top leaders emphasised the need to develop the rental housing market.
In recent months, the authorities have been making it easier for rental housing investors to access financing through REIT-like securities. China’s authorities stepped up a nationwide rental housing drive last August, announcing pilot programmes to build rental supply in 13 major cities. These moves aim to make housing accessible in the country where home prices have soared.
The statement filed with the bourse said that on 10 January 2018, Ping An Real Estate which is a unit of the insurance giant agreed with Hong Kong-listed Landsea to strategically cooperate in the industry of long-term rental apartments and to jointly seek potential development opportunities. The parties plan to jointly invest in long-term rental apartments projects in top-tier cities, such as Beijing, Shanghai, Guangzhou and Shenzhen, and key second-tier cities including Nanjing, Hangzhou and Wuhan over the next three years, with the target fund asset management scale of approximately CNY10 billion (US$1.55 billion).
Landsea in charge of design and operations of apartment projects
Under the terms of the agreement, Landsea will be responsible for the design and operations management of the apartment projects.
The cooperation between Ping An and Landsea on long-term rental apartments began informally in 2017. The parties jointly acquired Shanghai Senlan project in November 2017, with the intention to transform the project into middle and high-end long-term rental apartments for long term operations.
Ping An Real Estate is a shareholder of Fuji Investment Management, which holds a 8.35% stake in Landsea, which is principally engaged in property development services, long-term rental apartments, elderly care services, green property services and real estate financing in China and the US. A