Taikang Life Takes $1B Stake In NorthStar’s US-UK Healthcare Portfolio

It may not have the trophy value of five-star hotels, but mainland firms are starting to warm up to health care real estate investment. Nearly $2 billion has been pumped into the sector this month after Taikang Life Insurance entered into an agreement with US-based NorthStar Realty Finance to buy a $1 billion stake in its health care portfolio.

The deal will see the mainland insurer acquire a 19 percent stake in the set of health care properties, which has a total valuation of $6.1 billion. NorthStar Realty has 461 health care properties, including almost 200 senior housing complexes, in the US and UK under its control.

“Taikang shares our vision regarding the long-term value proposition represented by investing in a diversified U.S. healthcare real estate portfolio and we look forward to a fruitful relationship with them,” NRF CEO Jonathan Langer said. Langer’s company plans to set up a new joint venture entity with Taikang to manage the assets being purchased by the Beijing institution.

The sale comes as NorthStar Realty looks to unload 20 percent of its portfolio in preparation for a planned merger with NorthStar Asset Management — the firm’s current external manager, and Tom Barrack-led private equity firm Colony Capital.

Taiking Also Picks Up Hospitals At Home

Taikang’s purchase of the portfolio stake from NorthStar Realty is its largest investment for health care assets to date and its second major transaction in the sector in the past week.

Just today the company, which counts Goldman Sachs among its largest investors, agreed to a deal with IHH Healthcare to pickup a 29.9 percent stake in its China portfolio of primary care clinics and greenfield hospital projects. The Chinese giant is paying the Malaysian developer RMB1.1 billion ($160 million) for the stake in its mainland operation, and as part of the agreement, the two sides could collaborate on a partnership that would see Taikang Insurance’s clients referred to and treated at the group’s primary care clinics and hospitals.

Bad Bank Scoops Up Senior Housing And Healthcare Portfolio

Taikang healthcare acquisition follows soon after Cindat Capital Management who teamed up with compatriot Union Life Insurance to purchase a portfolio of senior housing and long-term/post-acute care facilities in the US.

In that deal earlier this month, the private equity firm affiliated with state-run Cinda Asset Management paid Ohio-based operator Welltower $930 million to acquire a portfolio of 11 senior housing properties and 28 long-term/post-acute care facilities across the US.

Auction Houses, Office Towers And Now Hospital Beds

While Taikang hasn’t been as splashy with its overseas investments as rival Anbang Insurance, the firm led by billionaire Chen Dongsheng continues to grab overseas assets.

In late 2014 the Beijing-based based insurer ventured into Europe to join with Hong Kong-based private equity firm Gaw Capital Partners to purchase the Milton Gate office building in London’s financial district for $246 million.

And earlier this year, Chen, who is married to Mao Zedong’s granddaughter, Kong Dongmei, oversaw Taikang’s move to become the largest shareholder in famed auction house Sotheby’s.