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Blackstone expands content creation portfolio with two Asia deals

The Sandcrawler building is one of the private equity firm’s first two investments in Asia targeting tenants in the fast-growing industry.

Private equity real estate powerhouse Blackstone has expanded its content creation real estate holdings to Asia with the purchase of the Sandcrawler building in Singapore.

The firm announced last week it had agreed to acquire the S$175 million ($132 million; €109 million) property from Lucas Real Estate, the real estate entity owned by George Lucas, founder of Lucasfilm and creator of the Star Wars franchise. The building hosts the regional headquarters of Lucasfilm and Disney, as well as the Singapore Government Technology Agency. It is located in Singapore’s largest business park One-North, which also counts technology and content creation companies Grab, Apple and HBO as tenants.

Alan Miyasaki, head of Asia acquisition at Blackstone, told PERE that the firm is a big believer in the life science, technology and content creation industries and it is actively looking for assets that can service tenants in these sectors for its core-plus real estate strategy. He pointed out that the Sandcrawler building is highly attractive to both technology and content creation firms. With $3.6 billion in AUM in its Asia core-plus strategy, this is also Blackstone’s first investment in Singapore under the strategy.

“It is an important facility for Lucasfilm and Disney. It has a strong tenant roster and that’s why we wanted to buy it,” said Miyasaki. Completed in 2013, the asset was officially opened by Lucas and the country’s prime minister Lee Hsien Loong.

Although the Sandcrawler building houses the offices rather than the studios of content creation companies, the firm believes the offices in Asia are critical to delivering content to consumers in the region, according to Miyasaki. The asset is located in a cluster of properties with similar occupiers so it is less likely that the building’s tenants will move away, he explained.

The Sandcrawler building is understood to be one of the firm’s first two key investments in content creation in the region. Earlier this month, it also bought similar buildings via the acquisition of Singapore’s Soilbuild Business Space REIT portfolio in a joint venture with Soilbuild Group. 

Globally, the private equity firm entered content creation real estate in 2017 when it purchased a portfolio of six office buildings in Burbank, California, leased to major studios including Disney, Warner Brothers and NBC Universal. It also acquired a 49 percent stake in Hudson Pacific Properties’ Hollywood Media Portfolio last year. The portfolio, which is home to the production studios of Netflix and Disney, is the largest full-scale independent studio operation in the US.

He added that demand for suburban office space, which is rare in Singapore, will only go up in the long term. “Even during the pandemic, occupancy continued to grow for these offices. Tech companies, content creating firms, biotech firms, all of these are growing so much and a lot of them prefer suburban offices like this than going to [the central business district]. These assets have a higher cap rate and can be acquired at a discount to CBD offices. They also provide better yields for investors,” he explained.