Ping An Insurance (Group), China's No 2 insurer, this week took its first step to diversify into US logistics properties, after snapping up trophy office towers in major Western cities. The Shenzhen-based group on Tuesday announced the launch of a joint venture in the United States to buy long-term high-quality assets, and has committed to an initial investment in a logistics portfolio of more than US$600 million, already occupied by some of the world's top companies. The venture, with US property fund Blumberg Investment Partners, has also identified US$400 million worth of other properties for further investment. This marks the first significant Chinese outbound investment in the Western logistics sector. "Ping An is looking at a diversified portfolio abroad," said Paul Guan, Hong Kong-based partner of global law firm Paul Hastings, which advised it in the deal. "Apart from offices and logistics, it's also seeking opportunities to invest, on behalf of clients, in downtown residential projects," he said. The Shenzhen-based group, which also operates banking, securities and trust businesses in China, has led Chinese insurers' overseas buying spree in the last two years, together with top rival China Life. The two biggest insurers in May agreed to fund part of a US$500 million commercial real-estate project to be built in Boston by US developer Tishman Speyer Properties. The two have also invested in London's office sector. Ping An bought Tower Place in the City from Deutsche Asset & Wealth Management for £327 million in its second purchase in less than two years. It bought the iconic Lloyd's building for £260 million in its first overseas foray in 2013. "We see tremendous opportunities in the US market," said Lee Hing-yin, director of overseas investment with Ping An Trust, a subsidiary of the insurer. "The establishment of our venture with Blumberg Investment Partners highlights the continuation of our strategy to be associated with best-in-class partners in key sectors worldwide." Alistair Meadows, an international director at global property consultancy JLL, said Ping An's move into the logistics sector was aimed both at diversification as well as better returns. His agency estimates that up to US$240 billion could flood into the global property market in coming years as China's insurance companies buy real estate abroad. Chinese authorities relaxed rules in 2012 for insurers so that they can invest more in real estate. Industry experts have warned of a price bubble in the US property market, particularly after Chinese insurer Anbang's US$2 billion deal for the historic Waldorf Astoria hotel in New York. "The logistics sector is hot worldwide at the moment, in the United States, Europe and Australia," Meadows said. "We've seen an increase in international investors' demand for logistics, including Chinese and Korean investors who previously had focused on offices." Ping An's move follows a US$4.55 billion deal by Singapore-listed Global Logistic Properties to acquire US warehouses from Industrial Income Trust, which once completed next month, will make it the No 2 US logistics owner, after local giant Prologis.