KUWAIT CITY-Kuwait Finance House has partnered with London-based Grosvenor Fund Management to invest up to $600 million in purchasing health care real estate in the United States. The partnership will focus on the US coasts, but will consider properties throughout the country.
Over the next seven years, the partnership will target the acquisition and development of private-pay senior living facilities and medical office buildings in the United States. Investments will be made through the formation of equity joint ventures with local and regional operating and development partners. Grosvenor Investment Management, based in Philadelphia, will oversee all investment activities, including sourcing, underwriting, structuring, financing, closing, asset managing, and exiting the partnership’s investments.
Executives at GIM said in a statement that the US health care sector is expected to benefit from attractive demand/supply characteristics, driven by favorable demographic trends and limited supply growth. “Healthcare is currently the nation’s largest industry and also its leading projected sector for job creation,” said Douglas Callantine, president of GIM, in the statement. “We believe that now is an opportune time to be investing in this sector.”
Brent Cohen, a senior investment analyst with GIM, tells GlobeSt.com that per the Kuwait company’s requirements, all the investments will comply with Shari’ah (Islamic law), the religious law of Islam. “In this case, it is mostly concerned with the sources that property income is derived from,” Cohen says. “For our purposes, we cannot earn revenue from tenants that are involved in most types of lending (most banks must be carved out), alcohol sales, gambling, and other similar uses that are not in compliance with Shari’ah law.”
This is the second health care investment for the partnership. Between 2004 and 2007, GIM sourced, structured, closed, and asset managed KFH’s first investment in the sector, acquiring a total of 15 New England senior living properties in a joint venture with Benchmark Assisted Living, based in Wellesley, MA. GIM sold the 1,174-unit portfolio in November 2007 for $268 million to GPT Group of Australia.
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