China Life splashes out on U.S. property

Updated 2017-05-24 13:30:28 China Daily

Insurer pays 0m to get 95% stake in commercial realty projects

Chinese leading insurer China Life Insurance (Group) Co said on Tuesday it is buying 48 commercial properties in the United States with total value of 0 million.

China Life Investment Holding Co Ltd, an alternative investment and management company and unit of China Life, is buying a 95 percent stake in the real estate projects from ElmTree Funds LLC, a private-equity firm based in the city of St Louis.

China Life said ElmTree would retain a 5 percent stake and continue to manage the properties together.

The 48 customized commercial properties are scattered throughout the US in 21 states and include logistics centers, office buildings and healthcare facilities. Tenants include GE, FedEx, Caterpillar and T-Mobile.

The business model of ElmTree has been to develop properties and lease them to single tenants on a long-term basis.

"The real estate properties have a steady cash flow and can generate good returns, with a rate of return usually higher than landmark office buildings in major global cities," China Life said in a statement.

ElmTree Funds Managing Principal Jim Koman told The Wall Street Journal that in general, properties in off-the-beaten-path locations produced yields that are more than 3 percentage points greater than yields from trophy buildings in top locations.

"We're seeing more and more foreign capital coming into secondary and tertiary markets all across the country," said Koman.

"China Life's latest investment is a typical example of Chinese insurers going abroad to optimize their asset allocations," said Hao Yansu, director of the school of insurance at the Central University of Finance and Economics.

Hao said Chinese insurance companies have strong financial strengths and more knowledge of the international market and overseas investments, aiming to better allocate their assets, are becoming increasingly popular with them.

Chinese insurers preferred to invest in real estate projects because they have the potential to appreciate in value and are easy to cash out. Acquiring financial institutions is also a popular strategic move, Hao added.

In 2015, China Life made its first US deal, joining Ping An Insurance to buy a majority stake in a Boston development in the city's popular Seaport District.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58January 21 2018 18:47:18

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16January 21 2018 18:47:18

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18January 21 2018 18:47:18

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

China World Business Sports Showbiz Audio
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
China World Fun Travel Entertainment Sports
Beijing Shanghai Guangzhou
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords