Zhong Guo Jing Ji Wang·2025-08-20 02:14Core Viewpoint - Insurance capital is accelerating its investment in commercial real estate and alternative assets, aiming for long-term stable returns amid an "asset shortage" environment, while also facing risks related to liquidity, valuation, and asset-liability matching [1][8]. Group 1: Investment Activities - Xinhua Insurance has been actively acquiring Wanda Plaza properties through its real estate fund, with significant transactions in cities like Wuxi, Beijing, and Wuhan, totaling approximately 16 billion yuan [2]. - Sunshine Life has established a fund worth 5.51 billion yuan to invest in six Wanda Plaza locations in cities such as Hefei and Dongguan [2]. - Other insurance companies, including China Ping An and Dajia Insurance, have also made substantial investments in existing real estate projects, with a total exceeding 4.7 billion yuan reported by August [3]. Group 2: REITs and Alternative Assets - Insurance capital has shown increased interest in alternative assets, particularly in real estate investment trusts (REITs), with a total investment of 2.631 billion yuan in REITs products by August, surpassing the total for the entire previous year [4]. - The average allocation of insurance capital in REITs has risen, with 7.92% for insurance accounts and 1.12% for insurance asset management products in 2023, compared to lower percentages in 2024 [4]. - Notably, two REITs focused on new infrastructure have seen significant participation from insurance capital, with allocations exceeding 10% [5]. Group 3: Strategic Considerations - The insurance industry is shifting towards commercial real estate due to declining yields on traditional fixed-income assets, which are insufficient to cover the rigid liabilities of life insurance products [7]. - The focus on real estate and alternative assets is driven by the need for stable cash flows and long-term investment returns, aligning with the long-term nature of insurance liabilities [7]. - However, experts caution that while diversifying into real estate offers more options, it also introduces risks related to liquidity and valuation, particularly in a changing market environment [8].