Real estate stocks are good. Why do insurance funds reverse reduction

Source: Beijing Business Daily

The recent real estate market has been positive, but insurance funds are saying goodbye to real estate stocks. On May 23, reporters from Beijing Business Daily noticed that, Financial Street Recently, it was announced that China Life Insurance recently reduced its shareholding in the company, and the latest shareholding ratio dropped to 4.99%. A number of important policies were issued at the same time, including the reduction of the down payment ratio for house purchase, the reduction of the interest rate of provident fund loans, and the cancellation of the lower limit of the housing loan interest rate. Why did insurance funds choose to reduce their holdings when the policy became friendly? Behind the frequent reduction of insurance assets, is it normal to sell at a high price and absorb at a low price or is it accelerating the retreat? Have insurance funds really made money investing in the real estate industry?

　　 Everyone Life once again reduced its holdings

Recently, favorable policies for real estate have emerged frequently, but "smart long-term funds" are revealing new changes in real estate investment strategies, and they choose to reduce their holdings in the secondary market. The Financial Street recently announced that China Life Insurance will reduce its holdings of 4.1% of the company's shares from April 17 to May 20, 2024, and the latest shareholding ratio will drop to 4.99%.

This is not the first round of reduction of our shares in the Financial Street. The last round of reduction took place from March 19 to April 2, 2024. Our accumulated shares in the Financial Street were reduced by 1.01% through centralized bidding. Recently, other insurance institutions have also reduced their holdings in real estate stocks. Beijing Business Daily reporter passed Eastmoney The data of Choice shows that in the first quarter of this year, China Life Underweight Vanke A 。 Previously, by the end of 2023, Ping An, China Zeng said, "Up to now, the company does not hold shares of Country Garden".

Recently, the property market has seen a lot of good news, and a number of heavy policies have been announced at the same time. Why did insurance funds choose to reduce their holdings? Chen Sheng, president of the China Real Estate Data Research Institute, said that the reason why insurance funds reduce their holdings of real estate stocks is that there is a lot of uncertainty in real estate stock investment. In many cases, the stock market is not completely positively correlated with the market performance of real estate enterprises. The current reduction is mainly because insurance funds do not recognize the new development model of real estate companies in the future, and then make corresponding adjustments.

Once upon a time, during the real estate dividend period, with the capital advantage, insurance funds repeatedly invested huge sums in related fields, listed real estate companies, and even "power grabbing" events such as "Baowan Battle" occurred. Nowadays, the enthusiasm of insurance funds for real estate seems to have been "extinguished" and their holdings have been reduced frequently.

From deep investment to opportunity withdrawal, have insurance investments made money in real estate stocks over the years?

Take everyone's life insurance as an example. Its predecessor was Anbang Life Insurance, which once held more than 14% of shares in Financial Street. Around 2014, Anbang was a brand raising financial street and bought shares in financial street on a large scale. At that time, around 2014, the average price of financial street was about 5 yuan/share. Compared with the current market price of 3.2 yuan/share in Financial Street, it is indeed lower. However, if we consider the dividend situation of Financial Street before, the overall investment income is not low. The reporter of Beijing Business Daily found that from 2014 to 2021, the dividend of Financial Street remained at a high level, with a maximum dividend of 4 yuan per 10 shares and a minimum dividend of 2.5 yuan per 10 shares.

In addition to Everybody Life, Harmonious Health also bought the Financial Street on a large scale around 2014. Although there was a reduction in its holdings in 2021, Harmonious Health also caught up with the dividend peak of the Financial Street.

However, not all insurance funds can seize the opportunity. The reporter of Beijing Business Daily found that a large insurance company once chose to invest in Sunshine City in September 2020, when the price of Sunshine City per share was about 6.09 yuan. But by the end of 2021, the insurance company chose to "cut the meat" and leave the market, and the transfer price was only 3.05 yuan per share, almost "halving".

　　 Buy buildings and park layout real estate

Although withdrawing from real estate stocks, insurance funds with sufficient "ammunition" and unique vision have chosen to invest in high-quality real estate and are accelerating the purchase of buildings and parks.

The Beijing Business Daily reporter found that the distribution of insurance funds is more in the super first tier cities such as Beijing and Shanghai, and in the first and second tier cities such as Hefei, Xi'an, Nanjing, Kunming, and mainly invested in the commercial office buildings, industrial parks, private office buildings and other real estate in the first and second tier cities. To be specific, at the beginning of this year, AIA Life Insurance acquired the controlling interest of the "CapitaLand Star Trade" project in Chaoyang District (CBD) of Beijing for a total consideration of only 2.4 billion yuan; According to market news, in the first quarter of this year, Great Wall Life completed the acquisition of Beijing Xinjie Gaohe office building project, with a total acquisition price of 1.02 billion yuan.

In addition to office buildings, various parks are also the focus of insurance capital layout. In February this year, Ping An Life Insurance announced that it had successfully acquired two logistics parks of Jihui Capital located in Jiangmen, Guangdong, and one logistics park located in Xi'an, Shaanxi.

The investment logic behind the layout of insurance assets in real estate mainly lies in the pursuit of long-term stable cash flow returns, which is more consistent with the attribute of long-term capital of insurance assets. The person in charge of Guoshou Investment previously wrote that in the next ten years, with the bottoming of the real estate market cycle and the easing of long-term liquidity in the capital market, the overall investment yield of investment real estate is expected to gradually recover to more than 8%.

Chen Sheng told the Beijing Business Daily that in this market cycle, some high-quality office buildings and industrial parks located in the first and second tier cities have seen a lot of price space and advantages due to price correction. Moreover, the rental income of these real estate projects can meet the investment demand of insurance funds. It can be said that under the larger price discount space, insurance investment in real estate is an opportunity point at this time.

Beijing Business Daily reporter Li Xiumei