Blackstone’s $160m Shanghai deal still on

Reports that Blackstone had abandoned plans to acquire a majority stake in a new Shanghai development were scotched by the seller, VXL Capital. VXL admitted though the closing date for the deal had been pushed back slightly.

The Blackstone Group will still acquire the Changshou Commercial Plaza in Shanghai despite reports it had failed to agree a price for the development amid the turbulence of the world’s financial markets.

VXL Capital said in a statement today it was still pressing ahead with the deal, originally agreed in June, for Blackstone’s real estate arm to purchase a 90 percent stake in the 40,345-square meter development for a reported 1.1 billion yuan or around $160 million.

The South China Morning Post had previously reported that the deal had been abandoned after both sides failed to agree a price. The Chinese newspaper cited unidentified sources.

But VXL said the deal had “not been terminated or scrapped.“ Instead the closing date for the deal had been “rescheduled” to the end of October, rather than within 15 days of the end of September, as originally agreed.

The South China Morning Post report went on to say Blackstone had also failed to agree a final price for its planned acquisition of Shanghai’s new Skymall shopping centre from Chinese developer Super Ocean Group.

Super Ocean Group had put a package of four buildings, including the Skymall, on the market in a bid to raise capital to support its growth into other sectors. The four buildings also included the Bank of Shanghai Tower in the Lujiazui area of Shanghai’s Pudong financial district, and Southern Securities Mansion, located on Nanjing Road, one of China’s busiest commercial streets.

Reuters said Super Ocean had wanted to sell the four buildings together, but potential bidders had the option to purchase three of the four, with the combined price between $730 million to $1 billion, with Blackstone vying to buy a variety of buildings in the city for as much as $1 billion.

In August, Blackstone opened its first office in mainland China, in Beijing, appointing Shan Fu as the chief representative. Fu was previously with Beijing Mainstreets Investment Group, a Chinese property developer. Prior to working at Beijing Mainstreets, Fu worked at several state administrative bodies including China’s National Development and Reform Commission, the State Economic and Trade Commission of China, the Office of Economic and Trade in State Council of China and the Office of Production of the State Council of China.

Stephen Schwarzman, Blackstone chairman and chief executive, said at the time the appointment “underlined our deep commitment to China and the Chinese market”. Last year, Blackstone appointed Antony Leung, former Hong Kong financial secretary, in its new office in Hong Kong to head the group’s business in Greater China.