Blackstone tees up first deal in Turkey

The New York firm has agreed to buy three shopping centres for around €200m on behalf of a European opportunistic fund.

The Blackstone Group has agreed to make its first real estate investment in Turkey via three shopping centres, it was announced today.

The New York-based firm has agreed to invest around €200 million in Gordion Shopping Centre in Ankara, Erzurum Shopping Centre in Erzurum, and Magnesia Shopping Centre in Manisa from Netherland’s based private real estate company, Redevco.

News of the deal was announced by Redevco, though Ken Caplan, senior managing director and head of European real estate at Blackstone, said in the statement:  “We are very excited about our first investment real estate investment in Turkey.” He added: “We see Turkey as a promising market for additional investment in the retail sector.”

Though the announcement failed to specify the vehicle Blackstone is investing on behalf, it is thought to be Blackstone Real Estate Partners Europe III, which raised just over €3.1 billion in 2009.

Redevco said the agreement to sell its three malls in the country was struck at the beginning of June and was part of a strategy announced at the end 2011 to stop developing in emerging markets and concentrate instead on its key markets of Belgium, Central Europe, France, Germany, Spain and Portugal, Switzerland, The Netherlands and the UK.

As part of the deal, a local Redevco team would continue to manage the assets for Blackstone. Redevco chief executive officer, Andrew Vaughan, said although the sale was in line with its new strategy the company wanted its Turkish team to continue in situ.“We feel that its future has been secured by choosing Blackstone which has significant expansion plans in Turkey and will take on our team to continue growing the business,” he said.

News of  Blackstone’s attraction to Turkey comes just a day after PERE revealed how US firm Amstar had closed a Turkish retail property fund. The Denver-based firm has raised €95 million for its Amstar Global Property Fund II offering through which it is targeting three development sites for shopping centres in the country.

Amstar is not the only firm finding success on the fundraising trail for a Turkish opportunistic fund. Istanbul-based Bilgili Group launched the BLG Turkish Real Estate Fund last year, for which it is seeking €125 million in equity, with a hard cap of €300 million, to target all property types throughout Turkey. 

According to documents from the University of Michigan’s Board of Regents, which committed €15 million to that vehicle, BLG Capital is expected to invest the equity primarily in hospitality and residential assets, including student housing.