State-owned China Life Insurance Co Ltd is leading a group of investors injecting $2 billion into Starwood Capital’s U.S. hotels portfolio, adding to a string of deals in the sector by mainland Chinese buyers this year.
China Life will be the lead investor in the properties, with sovereign wealth funds and others in the portfolio of 280 limited-service hotels in U.S., Connecticut-based investment firm Starwood said in a statement on Tuesday.
Starwood Capital, which has no links with leisure group Starwood Hotels & Resorts Worldwide, didn’t identify any of the other investors. It owns about 2,600 hotels globally, including Groupe du Louvre, TMI Hospitality, InTown Suites, and manages about $51 billion in assets.
China Life, the country’s biggest insurer, has flagged its interest in stepping up overseas investments as it seeks to diversify its $360 billion portfolio which is largely exposed to domestic Chinese market.
Chinese buyers are also targeting overseas real assets to protect against a depreciating currency and as they seek higher yields. Analysts say some of the recent hotel acquisitions by Chinese groups are aimed at capturing a bigger share of outbound Chinese tourists.
Among other notable hotel deals by Chinese investors in recent times are Anbang Insurance Group’s $1.95 billion purchase of New York luxury hotel Waldorf Astoria in 2015. In April this year, China’s HNA Group, an aviation and shipping conglomerate, agreed to buy the owner of Radisson hotel chain.
But earlier this year Anbang eventually dropped a $14 billion bid for Starwood Hotels & Resorts Worldwide, operator of the Sheraton and Westin hotel brands, after an intense bidding war with Marriott International Inc.