China Developer Greenland to Diversify Into Brokerage, Banking

  • Financial arm targets $10 billion of assets within three years
  • Company will apply for Hong Kong investment banking license

Chinese property developer Greenland Holdings Corp. is planning to diversify into a securities and investment firm with an aim of managing $10 billion of assets within three years.

Greenland, which is building China’s second-tallest skyscraper, has established a securities arm based in Hong Kong, it said in a statement Tuesday. The firm will also apply for an investment banking license in the city when conditions are “ripe,” said Geng Jing, president of Greenland Financial Holdings Group.

Greenland’s move underscores Chinese developers’ growing appetite for more lucrative business as soaring land prices and rising debt costs erode earnings, even as home sales rebound. China Evergrande Group last month said it is seeking to acquire brokerages and trust companies, extending a shopping spree even after first-half profit fell 23 percent.

“While many builders are tapping into financial businesses, they often position it as a resource for funding,” Geng said in an interview in Shanghai. “Our goal, instead, is a financial company focusing on growing returns.”

The newly established financial unit will first set up overseas real estate investment trusts, or REITs, with total assets of $4 billion to $6 billion, according to the statement. It will also set up an equity investment fund targeting medical and leisure industries, in an initial size of $3 billion to $5 billion.