The New York-based private equity group, Blackstone has announced that it will acquire US conglomerate General Electric Co’s entire residential real estate portfolio in Japan for over ¥190 billion ($1.61 billion; €1.29 billion)
Under the deal, Blackstone will take ownership of more than 200 residential properties, consisting of over 10,000 units in Tokyo, Osaka, Nagoya and Fukuoka, the firm said in a statement. The deal, which is certainly the largest real estate transaction in Japan in 2014 and thought to be the largest since the global financial crisis, is expected to complete by the end of the year.
“We continue to believe strongly in the residential sector’s fundamentals, especially in Japan’s major cities. We are excited by the opportunity to invest in such a high-quality and well managed business,” said Alan Miyasaki, Blackstone’s senior managing director.
Blackstone’s latest deal comes at a time when the firm is actively expanding its presence in Asia. Its first Asia-dedicated opportunity fund, Blackstone Real Estate Partners has, so far, raised $4.6 billion of equity, with 40 percent of the capital already invested or committed. A hard cap of $5 billion has been set for the fund.
Meanwhile, the firm has also been adding to its regional asset management team. In October, PERE broke news of the hire of three senior executives – Howard Zhang as the managing director for China, Lawrence Hutchings as managing director for Australia and Charles Wu as a principal.
GE Capital RE Estate, the commercial real estate unit of GE Electric has $36 billion of assets under management, with $5.1 billion in Asia-Pacific. Francois Trausch, chief executive officer, Asia-Pacific at GE Capital Real Estate said that the portfolio sale was part of GE’s global strategy of reducing its equity investments in real estate and building a real estate debt platform instead.
This deal is the largest property acquisition in Japan in 2014 – a year marked by many high profile real estate deals. In August, Japanese property developer Mori Trust bought the Meguro Gajoen office and retail complex for ¥130 billion yen. A few months later in October, the Singaporean sovereign wealth fund GIC acquired the office component of Tokyo’s landmark Pacific Century Place from Secured Capital for around ¥170 billion.