Fosun Forms JV With U.K. Asset Manager in Europe Property Push

Fosun Group has formed a joint venture with a British property asset manager in its 10th overseas real estate investment in less than two years as the Chinese conglomerate accelerates a push into Europe.

London-based Resolution Property will help Fosun’s property arm make real estate investments in 14 European countries, according to a joint statement Thursday, which didn’t disclose the financial terms. Fosun Property will hold a majority stake in the venture and use it to start funds targeting “large assets and portfolios,” with the first one to be offered later this year. Fosun will provide cornerstone funding for the funds.

The Shanghai-based conglomerate, equipped with low-cost funding from its acquisitions of insurance companies, has been snapping up real estate in gateway cities across the world. Since it acquired Lloyds Chambers in London in October 2013 and One Chase Manhattan Plaza in New York a month later, it has made another seven investments in the U.S., Australia, Hong Kong and Japan, including co-developing a luxury residential tower near New York’s Empire State Building.

“It marks a significant step in Fosun’s global approach,” Fosun Group Vice President Xu Xiaoliang said in the statement. “Resolution Property will be the exclusive platform for value-added investment in Europe, utilizing Fosun’s insurance capital.”

Insurance Capital

The venture with Fosun will target buildings valued from 100 million euros ($110 million) to 200 million euros and a multiple of that for diversified real estate portfolios, Resolution Property Chief Executive Officer Robert Laurence said in an interview. He declined to give the target value of the venture.

London, Birmingham and Manchester in the U.K., Stockholm and Berlin are among the cities that they are likely to target for acquisitions, Laurence said. It will buy office buildings and mixed-use projects, large shopping centers and outlet malls. As much as 25 percent of the portfolio may be residential, he said.

Fosun, backed by Chinese billionaire Guo Guangchang, has been on an acquisition spree that has included insurers and energy companies. It has agreed to buy a controlling stake in Phoenix Holdings Ltd., Israel’s fourth-largest insurance provider by market value, and earlier this year bought the shares it didn’t already own in Bermuda-based insurer Ironshore Inc. In December, it agreed to buy Meadowbrook Insurance Group Inc. to expand in the U.S.

Fosun’s insurance capital could rise to 70 percent of its total assets, from 34.8 percent at the end of 2014, in three years, according to Citic Securities Co.

The Resolution Property venture is the second asset-management investment for Fosun after it last year acquired Japan’s IDERA, which bought Citi Group Center and Shinagawa Seaside Park Tower in Tokyo.

Resolution Property currently manages more than 1 billion pounds ($1.6 billion) of real estate, Laurence said.