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September 11, 2009

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Ping An uses trust arm to foray in realty

PING An Insurance (Group) Co yesterday teamed up with Greentown Real Estate Group to invest about 15 billion yuan (US$2.2 billion) over three years through its trust arm in China's rising property market.

Ping An Trust, the trust unit of China's second-biggest insurer, will invest about 3 billion yuan to 5 billion yuan this year via trust products in properties developed by Greentown, Ping An said yesterday.

"The tie-up can create a complete real estate investment management chain by leveraging both parties' expertise," Ping An said.

Its de facto real estate investment trust - Ping An Trust - raises money through trust products sold to its clients and the money raised will be invested in real estate projects. Trust clients make money on rising prices of the real estate projects while Ping An can reap huge management fees from the developers.

The first batch of the capital will be invested in projects in different areas to trim risks.

Hangzhou-based Greentown, one of China's major developers, has projects in more than 30 cities, including Shanghai, Beijing and Nanjing.

In August, Ping An sealed a similar deal with Gemdale, a property developer, to invest up to 10 billion yuan in three years.


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