China’s troubled Anbang Insurance Group has put its $2.4 billion property portfolio in Japan up for sale and previous owner Blackstone Group is bidding, two people familiar with the company’s plans said.

The insurer is offering its entire portfolio of mainly residential buildings in Tokyo and other big cities after it failed to sell some of the assets last year, the sources said.

“The sale process has just started. Anbang is planning to sell the entire portfolio it bought from Blackstone,” said one of the sources who declined to be identified because they were not authorized to speak publicly about the company’s plans.

Representatives for Anbang and Blackstone declined to comment when contacted by Reuters.

A price has not been set as the sale is still in its early stages, they said. Anbang paid Blackstone about 260 billion yen ($2.4 billion) for the portfolio in 2017, then Japan’s biggest property deal since the global financial crisis.

The Chinese government took control of Anbang in February last year, part of a campaign to reduce financial risk. Anbang’s former chairman, Wu Xiaohui, was later sentenced to 18 years in prison for fraud and embezzlement.

Since then Beijing has accelerated asset disposals at the insurance group, which was among the most aggressive Chinese buyers of foreign assets.

Anbang tried to sell a portion of the Japanese portfolio last year, but failed to attract buyers because the assets were less attractive due to age and location, the sources said.

They said Blackstone was among the bidders for the entire portfolio largely made up of apartment buildings catering to middle class clients in Tokyo, Nagoya and other large cities.

Residential assets are attractive to Blackstone because they generate stable cash flow regardless of the economic cycle, unlike commercial office buildings, the sources said. (Additional reporting by Julie Zhu in Hong Kong.)

Topics Trends China Japan