New | Ping An to buy about 14 per cent stake in Chinese green developer Landsea
Chinese property shares cheap valuation attracts cash-rich insurers
Landsea Green Properties, a Hong Kong-listed mainland China developer, announced on Thursday it will raise HK$340 million in net by selling new shares and perpetual securities to a subsidiary of Ping An Insurance Group, in the latest tie-up between the country’s cash-rich insurers and developers that are seeking cheaper funds to finance their expansion.
With that, Ping An Real Estate will become the second-largest shareholder with a stake of 14.4 per cent, while Landsea’s mainland parent Landsea Group will lower its holding to 63.5 per cent from the current 74.1 per cent.
The company’s chairman Tian Ming, who controls 29 per cent of Landsea Group, told South China Morning Post: “We will explore joint investment opportunities both in China and overseas, including Hong Kong, the United States and Europe, in residential and non-residential sectors.”
They have already worked together on three residential property projects in Nanjing, where Landsea is based, and another in Chengdu.
The two sides said in a statement they would also strengthen cooperation in mezzanine financing and other financial services, without going into details.
They added the upgrade of their partnership to shareholding level from the project level shows Ping An Real Estate’s recognition of Landsea as a leading developer specialised in green technologies and its strategy to go asset light, charging commissions by deploying these technologies to help other developers. That will allow Landsea to share much higher profit from the projects it operate than its equity commitment.
Demand for green technologies at homes is rising as Chinese households become more aware of heavy pollution and care more about their own health, which put Landsea above many rivals in terms of where it should head when the whole sector is reconsidering strategies to survive an expected slowdown in the next decade.
