Grosvenor forms £380m US healthcare JV

The London based firm’s fund management arm has launched a partnership with the Kuwait Finance House to invest in the acquisition and development of healthcare properties in the US.

Grosvenor Fund Management has launched a joint venture investment vehicle with Islamic bank Kuwait Finance House, to invest in US healthcare real estate.

The fund management business of London-based property company Grosvenor, announced today joint venture plans to invest up to £380 million (€443 million; $588 million) in the acquisition and development of “private-pay senior living facilities and medical office buildings in the US”.

To aid in the execution of its strategy, the joint venture, which is expected to span over the next seven years, will partner with local operating and development partners in separate equity joint ventures.

Grosvenor said its fund management arm, which had £3.9 billion of capital under management as at 31 December, would oversee “all investment activities, including sourcing, underwriting, structuring, financing, closing, asset managing, and exiting the partnership’s investments”. The firm added that all these activities would be done in accordance with Shariah law.

Eric Cannon, director of acquisitions at Grosvenor, said the US healthcare sector should benefit from “attractive demand/supply characteristics, driven by favourable demographic trends and limited supply growth”.

“During the recent economic downturn, the sector’s cash flows have proven more stable and less correlated with the overall business cycle than other major property types,” he said. Douglas Callantine, president at Grosvenor, described US healthcare as the largest industry in the US and the sector most likely to create the most jobs in the country.

He said: “We believe that now is an opportune time to be investing in this sector.”

Grosvenor said the partnership with Kuwait Finance House, the second between the two organisations, was the third investment vehicle announced in 2011. With a combined investment capacity of £900 million, of which a third of that has already been committed, Grosvenor has also teamed up with the Canada Pension Plan Investment Board to invest in London’s West End office market over the next two years. It has also teamed up with another Canadian pension fund to buy a portfolio of four retail properties in Sweden and two shopping centres in France.

The firm preiously mentioned it was planning a US healthcare real estate vehicle in a profile interview published by PERE in May.