(Yicai) April 11 -- The trust arm of Chinese insurance giant Ping An Insurance has failed to make an overdue payment on a property project, mainly because of the downturn in the Chinese real estate market.

Ping An Trust delayed the payment on Funing 615, a product invested in a residential property project in Xiamen, Fujian province, owned by Chinese property developer Zhenro Properties Group, the company announced on its official WeChat account yesterday. The size of Funing 615 is around CNY770 million (USD100 million).

Ping An is working to advance the project disposal through various means, such as monitoring the progress of the underlying project’s development, sales, and fund situation, initiating legal actions against Zhenro, and facilitating the transfer and exit of equity held by Funing 615, the firm noted.

Founded in 1996, Ping An Trust is a holding subsidiary of Ping An Insurance. It had entrusted assets under management worth a total of CNY662.5 billion (USD91.5 billion) as of the end of last year, up CNY110.5 billion from a year earlier.

Funing 615 is not the only trust product related to the real estate sector of Ping An Trust to have experienced delays in the redemption.

An investor told Yicai yesterday that Ping An Trust’s Jiayuan 468 trust plan that he purchased has not been redeemed since it expired last December. The underlying asset of Jiayuan 468 is a real estate project in Huizhou, Guangdong province, owned by Logan Group.

Moreover, in August 2022, Ping An Trust announced the postponement of the distribution of all outstanding trust units of the Xiangyuan 230 trust plan, which involved a real estate project in Chongqing developed by RiseSun Real Estate Development.

Sluggish property sales have led to the transmission of risks from real estate companies to underlying financial institutions. The default scale of real estate trust products was CNY48.6 billion (USD6.7 billion) last year, CNY93 billion in 2022, and CNY91.7 billion in 2021, according to consulting firm Usetrust.Com.

Since January, there has been an ongoing outbreak of defaults in real estate trust products, with 12 of them defaulting a total amount of over CNY14.2 billion.

Editor: Futura Costaglione