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China Everbright forays into senior housing

The Hong Kong-based financial services firm has acquired a majority stake in a Chinese elderly health care services provider.

China Everbright Limited (CEL), the Hong Kong-based financial services conglomerate, has acquired a majority stake in Beijing Huichen Nursing Home Management, a Chinese elderly health care services provider. The acquisition marks CEL's maiden investment in the senior housing sector.

CEL told PERE the acquisition was conducted and managed by the company's principal investment team using its own balance sheet capital. The deal value was not disclosed.

The firm has taken a 67.27 percent stake in Huichen which provides senior healthcare services, including elderly healthcare, rehabilitation and community services. It operates six apartment complexes for the elderly and one management center with over 3,000 beds that serve close to 10,000 elderly people.

Chen Shuang, chief executive officer of CEL, said the elderly health care business shows great potential and prospects.

“It [Huichen] has a seasoned and professional management team and is the best partner which gives CEL access to the elderly care industry,” he said in a statement announcing the deal. “Further growth of Huichen is anticipated combining CEL's solid financial resources and networks with Huichen's professional management capability. We see huge opportunities with the government policies supporting the development of Chinese elderly care industry, and the growing aging population in China. As CEL's long-term quality asset, Huichen is expected to create lasting and stable returns on investment for CEL and the company's shareholders.”

An ageing population in China has prompted an increase in investments in the niche senior housing and elderly care sector. The elderly population in the country was estimated to be 25 million in 2015, as per the first China report on the Development of Livable Environment for the Elderly, and is expected to reach 371 million by 2030.

CEL has been an active investor in domestic and international real estate. In April this year, the firm made headlines by acquiring the landmark Dah Sing Financial Centre in Wan Chai, Hong Kong, for HK$10 billion (€.16 billion; $1.29 billion). The office tower deal represents the second most expensive sale of a commercial property in the island-city after the HK$12.5 billion paid by mainland property developer Evergrande to buy the MassMutual Tower.