With Chinese businesses permitted to invest up to 15% of their overall assets into global markets Ping An Insurance has turned its attention to overseas properties, logistics-related real estate and listed companies that promise high returns.
In a report published by The South China Morning Post, Lee Yuansiong, executive director and chief insurance business officer of Ping An said, “We have just started investing overseas and foreign assets account for less than 2 per cent of our portfolio. This is far from the 15 per cent cap so that we have a lot of room for overseas investment. We however do not target to invest up to the cap.”
In 2012 Beijing announced it would allow insurance companies to invest up to 15 per cent of their assets overseas in a plan to encourage companies to seek growth beyond the domestic market.
In May 2015 Shenzhen-based Ping An along with China Life to fund part of a US$500 million commercial real-estate project to be built in Boston by US developer Tishman Speyer Properties.
It also bought Tower Place in London’s City financial district from Deutsche Asset & Wealth Management for £327 million (HK$3.87 billion) last year, after it had bought the iconic Lloyd’s building for £260 million in its first overseas foray in 2013.
In October it announced the launch of a joint venture in the United States to buy long-term high-quality assets, and has committed to an initial investment in a logistics portfolio of more than US$600 million. The venture, with US property fund Blumberg Investment Partners, has also identified US$400 million worth of other properties for further investment.
This marks the first significant Chinese outbound investment in the Western logistics sector.
“The growing popularity of e-commerce has led to a strong demand for logistics properties and warehouses. These properties are very good long-term investments. Many are located in the outskirts of city centres nowadays but when cities expand in about 20 years time, these areas may well become the city centres and the value of these properties would grow substantially,” Lee said.