Anbang Invests $1B in Sino-Ocean as Insurers Raise Stakes in Mainland Developers

China’s insurance giants have featured in news of overseas real estate acquisitions this year, but now appear to be raising their investments in the mainland’s property market as well.

During the past week Anbang Insurance, which became famous internationally for its $1.95 billion acquisition of the Waldorf Astoria last year, agreed to invest HK$7.8 billion ($1 billion) into Sino-Ocean Land.

Anbang’s deal, which would give it a 20.5 percent stake in the Beijing-based developer came just one day after China Vanke, the country’s second largest developer by sales, revealed that an investment firm that controls a mainland insurer is now its largest shareholder.

Anbang Joins China Life Among Top Sino-Ocean Shareholders

The investment by Beijing-based Anbang was revealed in a stock market filing by Hong Kong-listed Sino-Ocean on Monday, after the insurer agreed to purchase the shares from two subsidiaries of privately held Hong Kong developer Nan Fung.

Shares in Sino-Ocean jumped by as much as 16 percent in the hours before the transaction was announced, with members of the family that holds Nan Fung agreeing to sell at HK$5.05 per share, just above the day’s closing price. After the transaction Nan Fung will still hold a 0.8 percent stake in the developer, according to an account in Bloomberg.

Another mainland insurer, China Life, remains the largest holder of Sino-Ocean shares with a 29 percent holding in the company.

China Resources Pushed From Top Spot For Vanke Shareholders

Anbang’s investment in Sino-Ocean came just a day after China Vanke solved a market mystery on Sunday by revealing to the Hong Kong exchange that Shenzhen Jushenghua, together with its sister company Foresea Life Insurance, is now its largest shareholder, displacing state-owned giant China Resources.

Together, Jushenghua and Foresea now own 20 percent in Vanke after Jushenghua bought an additional 4.97 percent in the company on Friday.

The two companies, which like Vanke and China Resources are based in Shenzhen, helped drive up Vanke’s share price by 33 percent last week as they bought up shares in the Chinese home-builder. The surge in Vanke’s share price, which also helped to pull up other large developer stocks, had observers musing that optimism over the IMF recognising the Chinese yuan as a strategic currency was driving interest in the stock.

Stock in Vanke closed at HK$21.85 per share on Friday before sliding back down to HK$20.20 per share in trading this week.

China Resources, which had long been the biggest investor in Wang Shi’s property behemoth, had fought back against Foresea in August to retake the top shareholder position after the insurer bought 37 million of the developer’s shares in two days.

However, analysts have pointed out that were China Resources to want to regain the top spot again, the cost could be prohibitively expensive, even for the state-run conglomerate. China Resources currently holds a 17.29 percent stake in Vanke, and moving ahead of Jushenghua/Foresea at current prices would cost over RMB 10 billion.

Vanke’s management contends that the issue of top shareholder is not a major concern.

“The company has no controlling shareholder and de facto controller due to its scattered shareholding structure,” a Vanke official said in the announcement to the stock exchange.