Perennial invests $150m in Shanghai eldercare
PERENNIAL Real Estate Holdings (PREH) said yesterday its healthcare arm is taking up a 49.9 per cent stake in Renshoutang, the largest private eldercare operator in Shanghai, through a capital injection of 735.5 million yuan (S$150 million).
Renshoutang operates 11 eldercare facilities and four pharmacies, each with a TCM (traditional Chinese medicine) clinic. They are mostly in Changning District in Shanghai.
"Our investment in Renshoutang provides immediate access to the largest integrated eldercare company in Shanghai with a strong operating track record and strengthens our "asset-light" strategy to drive steady long-term income for the group," said PREH chief executive Pua Seck Guan.
"Ultimately, the shareholders' vision is to position Renshoutang as one of the largest eldercare operators in China."
Renshoutang has an existing portfolio of over 2,400 beds, and access to a committed pipeline and pipeline under negotiation of over 5,700 beds and 16,000 beds respectively.
These position it to be the largest eldercare services operator in the affluent and populous Yangtze river delta region in the next few years.
Upon completion of the deal, PREH will be the largest single shareholder of Renshoutang, followed by the founder of Renshoutang, Feng Qiang.
Earlier in January, PREH had entered into a memorandum of understanding with Shanghai Summit Property Development and Shanghai RST Chinese Medical (Renshoutang) to form a joint venture to set up and manage Chengdu Xiehe International Eldercare and Retirement Home.
THE BUSINESS TIMES