Developer Agile sells stakes worth US$1.08 billion in seven Chinese property projects to Ping An to raise cash needed to dodge new borrowing restrictions

The proceeds may help Agile Group meet the requirements of new financial rules dubbed ‘three red lines’ due to take effect on January 1

Insurance firms investing in the property market has become a big trend in recent years, say analysts

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Tougher regulations dubbed the ‘three red lines’ could have made it difficult for Agile to borrow money. Photo: Imaginechina via AFP

Published: 5:01pm, 25 Dec 2020Updated: 5:01pm, 25 Dec 2020

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.