Chinese Investors Buy Interest in Welltower Seniors Housing Portfolio for $930M

by Jeff Shaw

TOLEDO, OHIO — A joint venture between Cindat Capital Management Limited and Union Life Insurance has purchased a 75 percent interest in a Welltower-owned portfolio of seniors housing properties for $930 million. The acquisition represents Cindat’s first foray into U.S. health care real estate investment.

The portfolio contains 11 seniors housing properties that are leased to Brookdale Senior Living, as well as 28 skilled nursing facilities leased to Genesis Healthcare. Welltower will retain 25 percent interest in the properties. The transaction is expected to close by year end and is subject to customary closing conditions.

“With aging demographics and U.S. healthcare trends driving the need for innovative health care infrastructure, we believe the sector represents an attractive long-term investment opportunity,” says Greg Peng, CEO at Cindat Capital Management, representing Cindat and Union Life. “We have a significant appetite for investing in the sector and we look forward to a mutually beneficial relationship with Welltower to capitalize on this unique opportunity.”

The agreement comes on the heels of Welltower’s third-quarter report, in which the company announced plans to significantly increase dispositions for 2016. The company initially planned to sell $1.3 billion of its assets, but announced it would like to sell a total of $4.1 billion this year instead. In order to reach that goal, Welltower will have to sell $3.3 billion in properties during the fourth quarter of 2016.

Brookdale provides independent living and assisted living services for the elderly. Genesis provides skilled nursing for people with chronic conditions and post-acute care for patients recovering from illnesses and medical procedures. Brookdale and Genesis will continue to operate the respective properties.

Toledo-based Welltower (NYSE: HCN) is the largest seniors housing REIT in the United States by market cap. The company’s stock price closed at $67.21 on Wednesday, Nov. 2, up from $64.80 one year ago.

Cindat Capital Management Limited is a China-based investment management company focused on overseas real estate investments. Union Life Insurance Co. is one of China’s leading life insurance companies and develops and owns skilled nursing facilities in six Chinese markets. Its investments total more than $1.3 billion.

— Nellie Day

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