China Life invests $2bn in Starwood Capital hotels

China's largest life insurance company has led a consortium to acquire 280 select-service hotels from Starwood which will remain as the asset manager to the portfolio.

China Life Insurance has led a group of institutional investors in the acquisition of a portfolio of US hotels for around $2 billion from Starwood Capital Group.

China’s largest insurer will serve as both the anchor and leading investor for the portfolio of 280 select-service hotels affiliated with premier global hospitality brands that spans 40 US states.

Greenwich, Connecticut-based Starwood will remain as asset manager to the portfolio.

“With this select-service hotel portfolio, China Life has an efficient vehicle for investing in the United States economy as a whole—as these assets offer access to strong markets, strong cash-on-cash yields, scale and diversification,” commented Barry Sternlicht, chairman and chief executive of Starwood.

“With our shared values and complementary investment approaches of our two organizations, we look forward to working with China Life on additional opportunities—across a wide range of real estate asset classes—in the years to come.”

Chinese investors have been buying hotels around the world due to the surge in outbound tourism from the country and China’s wealth expands. Anbang Insurance Group last month acquired 15 luxury US hotels, including New York’s JW Marriott Essex House and the Westin St. Francis in San Francisco, as part of a $6.5 billion purchase from Blackstone.

Anbang also acquired New York’s Waldorf Astoria for $1.95 billion, the highest price paid for a US hotel, in February last year.

Back in may this year Cindat Capital Management acquired a 70 percent stake in seven Manhattan hotels for $571.4 million as part of a joint venture with New York-listed hospitality specialists Hersha Hospitality Trust.