BEIJING/SHANGHAI, June 1 (Reuters) - China’s insurers can now invest in long-term rental housing projects, the banking and insurance regulator said on Friday, allowing such firms to diversify their investment portfolios as stock and bond markets stagnate.
Insurers can invest directly, through asset management firms, credit investment plans or equity investment among other methods in long-term rental housing projects, the China Banking and Insurance Regulatory Commission (CBIRC) said in a notice.
The housing projects must benefit the economy and society and have stable cash flow. Projects should be located in Beijing, Shanghai, the Xiong’an new district or cities where there is a net inflow of residents.
The property rights of the project must be clear and not be subject to any disputes, while the property must be certified for rental housing use, the regulator said.
All necessary approvals for the project must be in place, including planning, construction, operations and management.
If a debt investment plan is used, the borrower must make sure that it has 100 percent of the funds to repay principal and interest.
If an investment is in the form of an equity investment plan, the shares of the project company shall not be used as collateral for any third parties. (Reporting By Beijing Monitoring Desk and Engen Tham; Editing by Kim Coghill)