Ping An, Blumberg line up $600m US realty fund

Pedestrians walk near the Lloyd's of London building in the UK capital. Ping An Life Insurance (Group) Co of China Ltd bought the building in 2013. [Photo/Agencies]

Ping An Insurance (Group) Company of China Ltd, the country's second-largest insurer, has formed a $600 million fund with Blumberg Investment Partners to make real estate investments in the United States.

The two companies plan to invest in long-term, high-quality US leasing assets. Most of these investments will be in New York City, the metropolitan New York area, central area of the Atlantic coast, northwest of the Pacific coast, Florida, Atlanta, and Colorado.

Headquartered in Denver, Colorado, Blumberg, a property fund, has investments in real estate, energy and resources and other sectors.

The investment also highlights Ping An's growing interest in US logistics assets.

The current deal is being executed by China Ping An Trust and Investment Co Ltd, a group subsidiary.

"Ping An Trust and Investment has been a pioneer in overseas investments and has abundant experience. We will continue to expand our business operations abroad," said Zhang Jinshun, chairman of Ping An Trust and Investment.

The two sides plan to continue to acquire premium properties with a future investment of $400 million. They have indentified some property projects with strategic locations, Ping An said in a statement.

Li Qingxian, general manager of overseas investment division at Ping An Trust and Investment, said: "There are huge business opportunities in US real estate and the partnership with Blumberg indicates our commitment to work closely with leading industry partners."

"Ping An will continue to seek more investment opportunities in overseas property, and approach suitable institutions and high net worth investors," he said.

The move is part of the ongoing trend by Chinese companies to acquire overseas properties.

Last year, China's Anbang Insurance Group Co bought Waldorf Astoria hotel in Manhattan in New York from Hilton Worldwide Holdings Inc. And Ping An Insurance (Group) Co acquired the Lloyd's of London building from a Commerz Real AG-managed fund in 2014.

The US has become the top destination for investment from the Chinese mainland, followed by Hong Kong, Singapore, Australia and Malaysia, according to a report by Cushman & Wakefield, a global private commercial real estate services firm.

Lu Ming, research manager of Cushman & Wakefield, said part of the reason for Chinese enterprises' preference for US commercial property targets is that they are optimistic about the US economy.

"We are just seeing the very early stage of Chinese companies buying out overseas properties. In the future, we will see more diversified buyers, including smaller companies," he said.