Dutch pension fund manager APG Asset Management has made its debut life sciences real estate investment in Asia-Pacific with healthcare specialist CBC Group.
With a $1.5 billion target, CBC China Life Science Infrastructure Venture has reached a first close of $500 million. APG has committed 80 percent of the capital for the first close, while the rest comes from CBC Group. The venture will target life sciences-related real estate investments in Asia-Pacific across strategies: greenfield, brownfield, repositioning and sale and leaseback.
With an early focus on China, the venture will only invest in hard assets, with a target return of 20 percent before fund fees and carried interest, PERE understands. The vehicle is still open to new investors.
Graeme Torre, head of Asia-Pacific real estate for APG Asset Management, said in a release that the organization believes the advancement of healthcare and the development of the life sciences sector is a “key objective” in China, which faces an ageing population and an ever-changing global environment.
“We are delighted, therefore, to partner with a market-leading organization like CBC to establish the CBC HIP platform and to make the seed investment in its first life science real estate venture,” said Torre.
The $4.6 billion CBC Group is a Greater China-focused private equity firm concentrating on the healthcare sector. This includes pharmaceutical and biotech, medical technology and healthcare services.
Launched in Q1 2021, CBC China Life Science Infrastructure Venture is the first fund under the group’s newly established CBC Healthcare Infrastructure Platform, which is the private equity firm’s first venture into real estate. The chief executive is Hans Kang, InfraRed’s former chief investment officer in Asia.
The platform has grown from a team of five people to 20 people since Kang joined in the September 2020. PERE understands the team is expected to double in size next year.
Kang told PERE that by providing capital to life sciences companies to develop hard assets, it helps to maximize companies’ capital efficiency. The firm expects healthcare expenditures in China to double to 13 trillion yuan by 2026, according to the release.
“We are excited to become the first mover in this space in China, which is the most in-demand life science market globally and represents a multi-billion-dollar market opportunity,” he said.
PERE can reveal that the vehicle can invest in the hard assets of CBC’s portfolio companies, as well as other opportunities. The firm has already secured three projects in Shanghai and Beijing to develop life sciences facilities.