Chinese property developer Agile Group Holdings is selling stakes worth 7.05 billion yuan (US$1.08 billion) in seven property projects to Ping An Insurance Group, a move that should bring it much needed cash before a regulatory hurdle for borrowing takes effect and allow Ping An to deepen its footprint in China’s vast property market . Hong Kong-listed Agile is selling its interests in the developments, mainly in southern and east-central parts of mainland China, to a group of Ping An subsidiaries. “This could diversify the group’s financial exposure and facilitate [it] to meet its working capital requirements for the development of its property projects,” the Guangzhou-headquartered property company said in an exchange filing on Thursday. The seven projects cover around 1.76 million square metres of land. Three are in the cities of Zhongshan, Qingyuan and Huizhou in Guangdong, one is in Hainan province, and the others are in the cities of Yangzhou, Zhengzhou and Tianjin. The deal comes before the introduction on January 1 of China’s “three red lines” for property developers . Chinese state media reported that from the start of 2021 developers which failed to meet three specific financial requirements will be restricted or even completely prohibited from borrowing. The rules require developers to cap their liability-to-asset ratio, excluding advanced proceeds, at 70 per cent and their net debt-to-equity ratio to 100 per cent. Their cash to short-term debt ratio must be at least one. The tighter regulations would have made life difficult for Agile. At the end of June its liability-to-assets stood at 76.3 per cent, and its cash to short-term debt ratio was below one. Its net debt-to-equity ratio was 73.3 per cent, but that could be higher if its perpetual bond balance was included. “Insurers investing in property developers is a big trend in the last two years,” said Zhang Bo, chief analyst at 58 Anjuke Real Estate Research Institute, a Shanghai-based firm. “Even though they are not developing properties, their trend of entering the property industry through buying stakes in projects is obvious.” Hong Kong retail landlords bank on their mainland malls for Christmas cheer Ping An is the second largest shareholder of a number of Chinese developers, including Country Garden, CIFI Holdings, China Fortune Land Development and China Jinmao, according to Guandian Property, a Chinese real estate data provider. Ping An has invested in Agile’s property projects three times previously. In July this year, a joint venture co-established by Ping An and Agile bought the most expensive land on record in Zhongshan city for 3.88 billion yuan. In 2019, a Ping An subsidiary paid 733 million yuan for a 15 per cent stake in Agile’s Huizhou Bailuhu Tour Enterprise Development. In December 2018, a Ping An subsidiary upped its stake in an Agile project in Huizhou by 12 per cent for 1.39 billion yuan, taking its total holding to 34 per cent.