GE sheds office assets for $1.5b
Global conglomerate General Electric is believed to have sold its $1.5 billion Australian office portfolio in one tranche, with the US investor Blackstone Group said to be the buyer.
The assets - which include 90 Collins Street and 636 St Kilda Road in Melbourne, and 60 Carrington Street, 37-51 Pitt Street, 210-220 George Street and 99 Walker Street, among others in Sydney - have been on the market since the middle of last year and were originally being sold as one line or individually.
The other properties are spread from Perth to Brisbane and are considered A-grade office towers.
Property agents, who have been following the long sale process, said 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.
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 stated plan to focus more on the lending side of the property sector. But Blackstone, which raised $US13.3 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 in northern Sydney for $341 million after buying some of the $650 million worth of debt on the distressed property from one of the senior bank lenders within a syndicate of financiers.
For the full year Blackstone reported gross organic capital inflows of $US34 billion, and returned $US18 billion to investors. It held a record assets under management of $US210 billion, up 26 per cent.
The sale comes as investment cash continues to flow into the higher-yielding property sector.
The president and chief executive of global real estate firm Cushman & Wakefield, Glenn Rufrano, said on Tuesday that all US pension funds were looking overseas for higher-yielding investments.
Speaking to BusinessDay, he said in 2012 about $US40.3 billion of funds from US investors flowed into the Asia Pacific region, with Australia seeing the largest percentage amount.