The real estate investment of insurance capital has been significantly accelerated. It is planned to increase the investment by about 15.7 billion yuan since this year
2023-02-16
On February 15, AIA Life announced that it would invest in the project of Block 89, North Bund, Hongkou District, Shanghai by way of equity. Since this year, the investment in real estate by insurance funds has increased significantly. As of February 15, insurance companies have released 14 large-value real estate investment information. On the one hand, the new investment projects of insurance capital this year involve about 15.7 billion yuan; On the other hand, for projects that are not the subject of initial investment, the frequency of insurance capital contribution has increased. Industry insiders believe that real estate investment is in line with the nature of insurance capital and may bring long-term and stable income, but it also needs to prevent relevant risks. According to the announcement, the real estate project invested by AIA Life is the 89 Neighborhood Project in the North Bund, Hongkou District, Shanghai. It is currently under construction and is expected to be completed in the first half of 2023. Shanghai Shisen Real Estate Co., Ltd. (hereinafter referred to as "Shanghai Shisen") is the development and construction subject of the project. AIA Life increased the capital of Shanghai Shisen with the creditor's rights of 4.889 billion yuan and cash of 3.52 billion yuan, totaling 8.409 billion yuan. According to public information, AIA Life's first investment in Shanghai Shisen was the transfer of 90% of Shanghai Shisen's equity held by the former Shanghai Hongsheng on December 19, 2022, as well as 100% of Shanghai Shisen's shareholder loan debt held by the other two companies. In addition, Ping An Life has invested in real estate projects in four industrial parks at one time this year, with an estimated total investment of no more than 7.333 billion yuan. Based on this calculation, so far, the amount of real estate investment to be increased in the insurance capital year is about 15.742 billion yuan. Specifically, the four projects invested by Ping An Life are Oriental Wanguo Project, Hongyuan Science and Technology Innovation Project, Hongyuan International Project, and Hongyuan New Era Project. The projects are located in Shanghai and Beijing. They are all industrial parks and R&D office projects, and have been completed. They have obtained real estate certificates and put into use. As an investor, Ping An Life invests in the real estate held by the target project company by directly transferring the equity of the target project company. In addition to the investment in new real estate projects, insurance companies have also accelerated the speed of investment in non-first-time real estate projects. For example, on January 11 and January 30 of this year, CCB Life paid 78.935 million yuan to the developers of the T4 office building in the Greenland Bund Center. After the completion of the investment, the cumulative investment of CCB Life in the project was about 5.556 billion yuan; Ping An Life has made several contributions to the commercial and financial projects of Lot C2, E-01 and E-05, Lize Road, Fengtai District, Beijing, and the real estate projects of D-03 and D-04, Lize Business District, Beijing. Chen Li, chief economist of Chuancai Securities and director of research institute, told Securities Daily that high-quality real estate investment can share the investment risk of insurance companies, make the portfolio more diversified and bring relatively stable long-term income. At the same time, the current real estate project is in the period of undervaluation, with high cost performance. With the recovery of the economy, the real estate industry will gradually warm up, and the benefits of investment in real estate projects will be more apparent. Wang Yanxing, a senior researcher at the Chongyang Institute of Finance, Renmin University of China, believes that at present, there are three main reasons why insurance funds prefer real estate investment: first, the main risks of real estate
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：Securities Dairy
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