Blackstone strikes maiden deal for BREP Asia

The New York firm has bought Greensborough Plaza, a large retail mall in Melbourne, for A$360 million. It was the first deal for its Asia fund, which held a first close just last month.

Global private equity and real estate giant the Blackstone Group has inked its first deal out of its debut Asia real estate fund, Blackstone Real Estate Partners Asia, agreeing to buy Melbourne’s Greensborough Plaza for A$360 million (€254 million; $326 million).

PERE understands the equity value of the deal to be around US$130 million, 80 percent of which is understood to have come from the Asia fund, and 20 percent from its global $13.4 billion Blackstone Real Estate Partners (BREP) VII fund. The remainder of the deal was financed with leverage. The deal reflects a 7.7 percent capitalization rate.

Northeast of the city’s central business district, the 667,000 square foot mall is host to tenants such as supermarket chain Target, fashion retailer Coles and cinema operator Hoyts. The mall is understood to be 99 percent leased currently.

Blackstone has bought Greensborough from Australian property developer Lend Lease which has been invested in the asset since the 1990s. It was not until 2005 that its A$4.6 billion open-ended Australian Prime Property Fund Retail bought out New South Wales superannuation fund SAS Trustee Corporation's 50 percent stake for A$160 million, giving Lend Lease a 100 percent stake, according to Australian media.
Both Blackstone and Lend Lease declined to comment on the deal.

Australia has been earmarked one of the main areas of focus for Blackstone’s Asia fund, and the firm has made some notable purchases since it entered the market two years ago. Most recently in in November, it acquired Top Ryde shopping mall in Sydney for A$341 million, a deal understood to have been struck at half the asking price.

Last month, Blackstone held a $1.5 billion first close on its Asia fund, which is targeting $3.5 billion in commitments. Other countries on BREP Asia’s investment agenda include China, India, and Japan.