Insurers Rush to Buy Land

Several insurance companies lately are bidding for the land lots in the central business district (CBD) of Beijing.

They include Taikang Life Insurance Co., Sino Life Insurance Co., Sunshine Insurance Group, and Anbang Property & Casualty Insurance Company Limited. Three months ago, China's insurance industry watchdog China Insurance Regulatory Commission (CIRC) released the new policy about making realty investment. As predicted by market observers, these insurance institutions will become the major land buyers in the coming year.

Industry experts point out that office buildings in the CBD areas of Beijing have good cash flow and stable development prospect, thus will bring steady returns on investment to the insurance companies. As the regulatory department, CIRC requires that insurance institutions shall not violate related regulations to develop residential projects under the name of self-use properties or commercial projects. This time, the move of these insurers did comply with current regulatory policies.

With the business expansion and increasing premiums and capital, Chinese insurers are actually under heavy pressure of how to use such a large amount of available capital. On the other hand, they have higher demand for their own office buildings. Under such a circumstance, some insurance firms began buying properties as from the third quarter of this year.

Beijing-based insurance group People's Insurance Company (Group) of China Limited (PICC) expects to move the head office to Capital Times Square. Not long ago, PICC inked an agreement with related owners of Capital Times Square, under which, the group intends to buy the building at a price of about CNY 4 billion. The insurer is understood to be attracted by the position of Capital Times Square. In the coming two years, PICC and some of its subsidiaries are to move to the new .

Based in the southern boomtown Shenzhen, the trust unit of Ping An Insurance (Group) Company of China, Ltd in this September bought a plaza in Chengdu for its own use. By far, Ping An has not made any investment in commercial estate.

Taikang Life has also bought a land in Beijing, with the total areas of 60,000 square meters; and the financial center Shanghai-based China Pacific Insurance (Group) Co. has also bought a plaza in Beijing at a cost of CNY 4 billion. In the future, more insurers are expected to invest more in the commercial estate sector.