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Blackstone sells Sydney office asset for A$415m

The New York-based private equity real estate giant has sold an office building in Sydney inherited in its 2011 acquisition of Valad to the Chinese property giant Dalian Wanda.

The Blackstone Group has sold Gold Fields House in Sydney to Dalian Wanda Group, the Chinese property firm backed by billionaire Wang Jianlin, in a deal valued at A$415 million (€292.19 million; $327.93 million).

The office building located in Sydney’s central business district was owned by Valad, the Australian real estate investment management business which was bought by Blackstone in 2011 on behalf of its Blackstone Real Estate Partners (BREP) VI fund. The purchase price reflects a cap rate of 4 percent and the transaction is expected to close in March this year.

The Wanda Group is planning to create a mixed-use development project on the site, which would include a 5-star hotel, luxury residences and retail offerings.

“Gold Fields House is one of the most significant investments acquired in the Valad portfolio and is a great example of Valad’s capability to reposition assets to achieve their full potential,” Chris Heady, Blackstone’s head of real estate in Asia, said in a statement. “Blackstone has built a diverse real estate portfolio in Australia of over A$3.5 billion and we are committed to pursuing acquisitions and disposals that benefit our investors and joint venture partners.”

Jones Lang LaSalle and CBRE acted as advisors on the sale process, understood to have started in October last year. 

Blackstone has been in the process of selling Valad-owned assets globally. In November, it sold the landmark Sheraton Noosa Resort and Spa in Sydney to a group of private investors in a deal valued at $110 million. This was preceded by the sale of a portfolio of industrial assets spread across Australia to M&G Real Estate and the Australian logistics firm Propertylink for A$138 million.

It is also seeking buyers to sell its financial stake in the European division of Valad Property Group called Valad Europe, a deal expected to be announced early in 2015.