China’s largest real estate developer by sales now wants to jump into Internet finance, giving return-hungry investors a chance to held the giant state-owned enterprise fund its projects.
In an announcement in Hong Kong, the COO of Greenland Hong Kong, which is the Shanghai-based company’s offshore-listed vehicle, said that it plans to create an online marketplace for individuals to loan money to finance Greenland’s projects.
The move by Greenland, which has also been one of China’s most aggressive overseas investors, comes as the country’s real estate developers try to come to grips with a slumping local property market, tightening financial conditions, and slower economic growth.
Greenland Broadening Business Scope in Search of Return
“Apart from selling high-quality properties, we are determined to embrace the internet because we believe it can broaden our business scope,” Greenland Hong chief operation officer Hou Guangjun was quoted as saying by the South China Morning Post. “Our online financial services will be distinctive from the popular P2P models,” Hou said.
Greenland said that it would be relying on a marketplace lending model whereby it would raise funds for its projects over the Internet from individual investors.
The move by Greenland comes as China appears to be loosening up its lending sector by allowing privately-held firms, including tech giants Alibaba and Tencent to set up financing firms. China’s property developers have also found it increasingly difficult to borrow from traditional banks in recent years, as the spectre of risk in the nation’s real estate market has scared off many traditional lenders.
Greenland has also looked overseas for opportunities to enter the financial services market, saying in January that it intends to buy an insurer or private bank in Europe. Greenland Group subsidiary,
Chinese Developers Continuing to Diversifying
Greenland’s move into a financial services comes less than two months after competitor Dalian Wanda made its own acquisition in online finance, buying online payment platform 99bill. The country’s developers have been diversifying into everything from overseas real estate to cooking oil as China’s real estate market has slowed in recent years.
Greenland Group has bought up development projects 13 cities across North America, Europe and other parts of Asia recently, in addition to continuing to build its mainland operations.
Wanda, has already branched out into theme parks, movie theatres, and now most recently sporting marketing, while Guangzhou Evergrande is now trying its hand at solar energy, cooking oil and bottled water.