(Yicai Global) Sept. 26 -- China Construction Bank, one of the country's four largest lenders, is planning to set up its first property leasing fund worth CNY30 billion (USD4.2 billion) amid developers' financial troubles and sliding real estate prices.

The China Banking and Insurance Regulatory Commission has approved the establishment of the fund that will allow CCB to buy and manage rental housing in a market-oriented manner in the long-term, the state-owned lender said in a statement recently, without disclosing more details about the intended operations or target assets.

The business scope of the private fund will involve equity investment and asset management. The maturity is 10 years but may be extended. CCB will finance most of the fund by itself while its trust business unit will indirectly subscribe to the remaining CNY1 million (USD139,596) of shares. CCB holds 67 percent of the unit's equity.

Since August, governments around China have debuted policies to ensure timely delivery of property projects amid the sector's downturn. One example is the country's first special loan issued by the China Development Bank on Sept. 22 to guarantee the completion of projects in Shenyang, the capital of northeastern Liaoning province, according to an executive of the lender.

CCB's move aims to increase the supply of long-term and affordable rental housing while exploring a new business model of combining purchasing and leasing of property, the financial institution said. Managing rental housing assets through a fund can facilitate the steady and healthy development of the real estate sector, the bank said.

The lender will develop a comprehensive service system for housing, involving equity, mergers and acquisitions, and credit support, and it will also issue real estate investment trusts, in order to consolidate its competitiveness in property financing, based on the statement.

CCB's balance of mortgages totaled CNY762.8 billion (USD106.5 billion) as of June 30, down by nearly 9 percent from Dec. 31, 2021, ranking third among commercial banks in China, according to the lender's financial report. Industrial and Commercial Bank of China was No. 1 and Agricultural Bank of China No. 2 in this regard.

Editors: Tang Shihua, Emmi Laine, Xiao Yi