As China’s housing boom cools, insurer Ping An and developer Cifi shift focus to rental market

The real estate investment platform of Ping An Insurance has joined Shanghai-based developer Cifi Holdings to launch a 10 billion yuan (US$1.5 billion) rental home investment and management business, targeting affordable living for those who have yet to get on the housing ladder.

The two companies announced on Thursday they would co-invest in a batch of rental home projects in first- and second-tier mainland cities over the next three years.

The investment and management platform will also engage in acquisition, redevelopment, management and asset securitisation of the rental home businesses, they said.

Zhu Zhengjian, general manager and chief operating office of Ping An Real Estate, said the company would seek to boost total assets of rental homes to 200 billion yuan in 10 years by securing more partnerships.

The announcement marked a milestone in China’s rental home sector because it was the first time that a cash-rich institution and a leading developer committed to building and managing residential properties for lease, an untapped area in the country’s real estate market.

More than 200 million people are renters in China, according to global property services firm JLL.

In Shanghai, the demand for rental homes is expected to hit 4 million units, far exceeding the available supply.