Mainland conglomerate Fosun International plans to build more housing projects for the elderly, betting on ballooning demand for this niche as the population ages.
"Together with [the United States-based] Fortress Investment Group, we will sign five to six more projects for the elderly, mainly in major cities, including Beijing," Fosun chairman Guo Guangchang said yesterday.
Fortress has partnered Fosun to operate joint venture Shanghai Starcastle Living Services, which already has a housing project for the elderly in the city.
Starcastle would expand into other key mainland cities over time, Guo said after Fosun's annual general meeting yesterday.
Fortress is publicly traded on the New York Stock Exchange. Its private-equity portfolio investments include Brookdale Living and Holiday Retirement - two of the largest senior-housing operators in the US.
"We are exploring how to tie our insurance and medical businesses into homes for the elderly," Guo said.
Shanghai-based Fosun has invested in insurance businesses, including a 50 per cent interest in Pramerica Fosun Life Insurance, which is a joint venture with Prudential Financial; and an 85.1 per cent interest in Peak Reinsurance, which is co-invested by the International Finance Corp of the World Bank.
Last month, Pramerica-Fosun China Opportunity Fund invested up to US$240 million jointly with Fosun's subsidiary Shanghai Fosun Pharmaceutical to acquire a 95.6 per cent stake in Israel-based Alma Lasers, a manufacturer of lasers used in cosmetic surgery.
"The [elderly home] investment is prompted by the market potential and the challenges in the property industry," said Liang Xinjun, a vice-chairman and chief executive of Fosun.
The mainland is expecting a rapid increase in the number of elderly while the central government has implemented measures to cool the property market.
Other developers are also eyeing the elderly-care market, including China Vanke, the country's largest developer by market value, attracted by growth projections in the coming decades.
The China National Committee on Ageing has estimated that the number of citizens aged 60 and above will rise to more than 200 million this year. By 2050, a third of the population will be above 60.
Apart from homes for the elderly, Liang said the company would focus more on non-traditional property and create a diversified product portfolio with signature products such as real estate for residential, health, trade, logistics and commercial-tourism-culture complexes.
Fosun shares yesterday fell 1.75 per cent to close at HK$5.62.