China Life invests in US$2b of Starwood Capital Hotels

The Royal Palm South Beach Miami, the first hotel in Starwood's ‘Tribute Portfolio’ division. ― AFP pic
The Royal Palm South Beach Miami, the first hotel in Starwood's ‘Tribute Portfolio’ division. ― AFP pic

SHANGHAI, Oct 19 — Starwood Capital Group sold a stake in about US$2 billion (RM8.4 billion) of US hotels to a group led by China Life Insurance Co, extending a streak of Chinese investment in overseas lodging properties and travel-related businesses.

China Life, the country’s largest life-insurance company, will be the lead investor in the properties, with sovereign-wealth funds and others also owning a piece of the 280 limited-service hotels in 40 states, Starwood said in a statement Tuesday. The Greenwich, Connecticut-based firm, which last year sold New York’s luxury Baccarat hotel to another Chinese insurer, will continue to be the asset manager.

“With this select-service hotel portfolio, China Life has an efficient vehicle for investing in the United States economy,” Barry Sternlicht, chairman and chief executive officer of Starwood Capital, said in the statement. “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 hotel and travel businesses around the world as outbound travel surges and China’s economy and wealth expand. Anbang Insurance Group Co last month acquired 15 luxury hotels around the US, including New York’s JW Marriott Essex House and the Westin St Francis in San Francisco, as part of a US$6.5 billion purchase from Blackstone Group LP.

China deals

Anbang helped usher in a wave of Chinese investment in US hotels with its February 2015 purchase of New York’s Waldorf Astoria for US$1.95 billion, the highest price ever paid for an American hotel. The Beijing-based company started a bidding war for Starwood Hotels & Resorts Worldwide Inc in March before walking away and enabling Marriott International Inc to proceed with its takeover. Starwood Hotels, which Sternlicht founded in 1995 and led for the next decade, has no affiliation with Starwood Capital.

China’s HNA Group, owner of Hainan Airlines Co, earlier this month said it will acquire a group of golf-course properties from a company founded by former Microsoft Corp executive Scott Oki for US$137 million. HNA in April agreed to buy Minneapolis-based Carlson Hotels Inc and its majority stake in Rezidor Hotel Group AB, and last year purchased a minority stake in Red Lion Hotels Corp. Jin Jiang International (Holdings) Co is the biggest shareholder in Paris-based hotel company Accor SA, the largest operator of European hotels.

Starwood is one of the biggest real estate managers in the world, with about US$51 billion of assets under management. — Bloomberg

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