Blackstone bets big on US housing market recovery
Global investment company Blackstone Group is making a huge wager on housing.
The group has agreed to buy control of 80 apartment complexes in the US from General Electric, valuing the properties at about $US2.7 billion ($2.94 billion)
The US reports say the deal reflects a gamble by Blackstone that the US residential housing market is on an upswing. Blackstone's real estate arm is its largest operation, and the deal with GE is the company's biggest investment in apartments in recent history.
Blackstone was also said to have made a big bet on traditional homes, spending more than $US5.5 billion to buy houses to rent for now and sell later.
GE, whose finance arm is selling the apartment properties, has been looking to reduce its real estate holdings, as part of an overall effort to reduce its size and risks.
Blackstone is nearing the completion of a deal to buy about $300 million worth of office buildings in Australia from GE Capital.
The assets include 90 Arthur Street in North Sydney, 127 Creek Street in Brisbane and 636 St Kilda Road in Melbourne. GE Capital is also selling a tranche of assets to the Pacific Alliance Group as it focuses on its property lending business.
Following the completion of the long-running sales program, Blackstone will have spent $2.5 billion on Australian property - including shopping centres, office buildings, logistics centres and bulky goods in the past two years.
Its largest single asset is the Top Ryde shopping centre in Sydney and the recently acquired Greensborough centre in Melbourne. It has also been touted as a possible buyer of a hotel portfolio belonging to Brookfield.
In addition, it owns the former Valad Property Group, which has several office assets that could be redeveloped into apartments.
On a recent visit, Blackstone global head of real estate Jonathan Gray said Australia had become a very important market to the group. "We have moved key people here, we have a platform in Valad, we intend to be big investors," Mr Gray said.
"I think we have the foundations of a really good business here."
Blackstone recently lodged a registration statement in the US, relating to the proposed float of Brixmor Property Group, formerly Centro Properties Group US.
Analysts said Blackstone could raise as much as $US700 million from the sale of 522 US shopping centres it acquired in 2011 as part of its $US9 billion rescue of Centro Properties.
If successful, it would be one of the biggest offers by a shopping centre real estate investment trust since the Simon Property Group's $US840 million float in 1993.