Blackstone to Shed Broadgate Stake - Analyst Blog
New-York based private-equity giant
The Blackstone Group L.P
) announced that it has agreed to sell 50% of its stake in
London's Broadgate complex. The deal has been sealed for an
amount exceeding $2.66 billion (???1.7 billion).
An undisclosed sovereign wealth fund has agreed to acquire the interest in Broadgate complex. Alongside, this happens to be one of Europe's biggest office deals.
In 2009, Blackstone purchased 50% share in the property and had agreed not to sell its stake in the property for the next three years. At that time the property was valued at $3.29 billion (???2.1 billion). Moreover, the company invested additional capital in order to restore the property. However, the remaining 50% interest in the property will be retained by British Land Co. that comprises 16 office buildings on 30 acres, restaurants, stores, health clubs and pubs.
Alongside, Blackstone has initiated raising a new fund for the European real estate worth $5 billion. This would be Blackstone's fourth new fund for European real estate as it wants to capitalize on the opportunities worldwide. Moreover, investors from U.S., Middle Eastern and Asia are anticipated to invest in the company's new European fund.
Moreover, Blackstone had agreed to purchase 80 apartment properties in U.S. from General Electric Company ( GE ) for approximately $2.7 billion.
Lately, in the past few months, Blackstone has been a part of various high-profile deals. Recently, the company was in negotiation with The Goldman Sachs Group, Inc . ( GS ) to buy a marginal stake in the latter's European pension insurance operation, Rothesay Life Ltd.
Moreover, due to the recent rise in property prices in the U.S., Blackstone has been disposing its largest real estate properties. Blackstone has sold office buildings that were acquired by the company prior to the recession in 2008.
Additionally, Blackstone had previously purchased properties in Europe due to the fall in property prices following the financial crisis. In Nov 2012, the company purchased Burlington Hotel in Dublin for $89 million (???67 million).
The Blackstone's disposal of its stake in Broadgate is expected to provide financial flexibility to the company. Moreover, due to the rebound in property prices across the globe, Blackstone has been shedding its assets in order to gain profits.
Blackstone currently carries a Zacks Rank #2 (Buy). In the same sector, Fortress Investment Group LLC ( FIG ) is also performing well with a Zacks Rank #2 (Buy).
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