GE offloads $1.5b portfolio

Global conglomerate General Electric is understood to have sold its $1.5 billion Australian office portfolio in one tranche, with the US investor Blackstone Group said to the buyer.

The assets, which include 60 Carrington Street, 37-51 Pitt Street, 210-220 George Street and 99 Walker Street, among others in Sydney, and 90 Collins Street and 636 St Kilda Road, Melbourne, have been in the market since mid last year and were being sold as one line or individually.

The other properties are spread from Perth to Brisbane and are considered A-grade office towers.

Agents who have been following the long sale process, say GE Capital completed the deal from its US offices overnight, with only limited input from the Australian real-estate arm.

A GE Capital spokeswoman declined to comment, and Blackstone did not return calls.

Other potential buyers were said to be Mirvac, to give it a bigger presence in Sydney to complement its 190-200 George Street development, and DEXUS Property.

Given the size of the deal, however, and the fact that Australian groups have said they prefer to develop with joint-venture partners, they were considered unlikely buyers.

An Asian-based investor Pacific Alliance was also mentioned over the past few months as a possible buyer, but was said to be more interested in individual assets in the portfolio.

GE Capital put the buildings on the market as part of its plan to focus more on the lending side of the property sector.

Blackstone, which raised $US13.3 billion ($12.9 billion) in November, has made little secret that it wants to expand its global property portfolio.

On Monday it was outbid on the Ingham family's $800 million property portfolio by US private equity group TPG.

Blackstone already owns Valad Property and last year bought the Top Ryde City shopping centre for $341 million after buying some of the $650 million worth of debt on the property.

The sale comes as investment cash continues to flow into the higher yielding property sector.

The president and chief executive of global real estate company Cushman & Wakefield Glenn Rufrano said on Tuesday all US pension funds are now looking overseas for higher-yielding investments.

He said about $US40 billion from US investors flowed into the Asia-Pacific region last year, with Australia getting the highest percentage.