Blackstone: hello, good buys
Wall Street billionaire financier Stephen Schwarzman, the co-founder of private equity firm Blackstone Group, has earmarked Australia and the Asia-Pacific region as an investment opportunity for the company's bulging commercial property fund.
Mr Schwarzman highlighted the opportunities in Australia while speaking at a recent investment conference, with his global investment firm backing that bullish view by deploying extra staff at local offices. Blackstone also had a recent splurge on property assets in Melbourne and Sydney.
"In Australia, we've been buying a lot of stuff," said Mr Schwarzman, who, according to Forbes, has an estimated personal fortune of $US6.5 billion ($7.1 billion) and gained notoriety for shelling out $3 million on a 60th birthday party that included a payment of $1 million to singer Rod Stewart to croon for his guests.
Mr Schwarzman told analysts and investors he considered Australia's currency overvalued because of the resources boom. With the recent correction against the greenback, it seems he was flagging that Blackstone was poised to move in.
The comments came as Blackstone, one of the world's biggest managers of alternative assets, closed the largest-ever private real estate fund after taking in $US13.3 billion of offers.
It means Mr Schwarzman and his global investment team can back up their talk with action, and Blackstone has been an active bidder of late on a range of commercial property assets in Australia, picking up some prime commercial and shopping centre assets in capital city CBDs.
In 2011, Valad Property Group shareholders voted through a $207 million takeover by Blackstone, handing to the private equity giant the company's V-Plus Core fund, which at the time had a 39 per cent stake in Gold Fields House office tower at Circular Quay as well as Valad's European arm, which controlled a $6 billion funds-management business. Having digested that deal, Blackstone then spent $9.2 billion on shopping centre group Centro's US assets.
Blackstone also bought Sydney's Top Ryde shopping mall and an office tower on Castlereagh Street, as well as paying about $650 million for a $2 billion portfolio of distressed property loans on about 50 Australian properties.
The group is also rumoured to be looking at buying a $574 million-plus hotel portfolio from the Brookfield Group and is a front-runner for two shopping centres in Melbourne, including the Greensborough shopping mall.
Blackstone has revealed it has $US1.5 billion of capital commitments for its Asian property fund, targeted at $US4 billion. It will focus on property deals in China, India, Australia and Japan.