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November 18, 2012 4:48 pm
Blackstone’s real estate arm has agreed a fourth Australian transaction in just over a year in a deal that underscores interest in distressed office and shopping mall assets in Australia and Asia.
The New York-based alternative investment group is buying Top Ryde, a Sydney shopping mall in receivership, for A$340m ($352m) from a European and Australian bank syndicate and Goldman Sachs. The mall cost A$720m to construct.
Blackstone this year bought 149 Castlereagh Street, an office building in Sydney, at a 46 per cent discount to the face value of the debt from Suncorp, an Australian financial services group.
Partnering with Morgan Stanley, Blackstone also acquired an Australian loan portfolio, including a shopping centre in Melbourne, with a face value of A$1.8bn from Lloyds Bank for A$620m.
Blackstone last year took private Valad Property, an indebted Australian-listed real estate investment group with an international office network managing $8bn, at a massive discount to its peak market value.
Australia has been one of Asia-Pacific’s most active markets for distressed sales, but Blackstone has also been doing deals in China and India.
It recently bought a vacant property on Shanghai’s bustling Nanjing West Road, which houses an office tower with a Sofitel hotel at the top, from a Taiwanese developer.
It also bought up commercial space in Bangalore and Pune in India and has done deals in Japan both in its own name and with CIC, the Chinese sovereign wealth fund.
Blackstone’s $13.3bn Real Estate Partners VII fund will make the investment in Top Ryde.
Given the optimism of the group regarding the size of the opportunity in Asia, investors say they expect that Blackstone will raise a dedicated Asia property fund although it is likely to be smaller than its $4bn European property fund.
Blackstone already has scale in real estate that its rivals cannot match. Competitors such as Citigroup, Goldman Sachs, Morgan Stanley and Merrill Lynch have either disappeared or pulled back dramatically. “If anyone anywhere in the world has a major property to sell, Blackstone will get the call,” says one investor.
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