iNVEZZ.com Tuesday, August 20th: The real estate arm of private equity firm Blackstone (NYSE:BX) is targeting up to $5 billion for a new European property fund, betting on property deals in the region increasing, Reuters has reported, quoting unnamed inside sources.
According to London-based research company Preqin, currently there are 112 real estate funds being raised for Europe targeting a combined total of $46 billion – about half the amount sought for North America. If it raises $5 billon, Blackstone’s fund will be the largest being marketed for the region, Preqin has noted.
Blackstone has declined to comment on the reported new European fund.
The New York-based firm has recently said, however, that though the U.S. represents the bulk of its real estate holdings, it was now seeing more property investment opportunities abroad. With Europe’s distressed real estate coming up for sale and Asia’s financial problems creating new opportunities, the two regions are more attractive than the higher-priced U.S. market, Reuters has noted in its news item.
Tony James, president of Blackstone, last month said when reporting the private equity group’s earnings: “Activity levels seem to be shifting from the US, which has been our focus, to Europe where there is more distress . . . the spigots are starting to loosen up in the sense that people want to sell assets.”
**Property Deals Volume Increasing**
In recent months, Blackstone’s volume of property investment deals has been picking up. The real estate arm of the firm has acquired control of Multi Corp, a Netherlands-based shopping centre developer, and joined the property arm of Canadian pension fund Caisse de Dépôt du Québec to purchase loans and debt secured by equity in Gecina (EPA:GFC), a French real estate investment trust (REIT). In Asia, Blackstone has raised $1.5 billion towards a similar sized fund, investors say.
Blackstone is also in the process of selling its 50-percent stake in the Broadgate Estate in the City of London – which, if it reaches analysts’ price estimates of up to £1.7 billion, would be one of the biggest private equity property exits by value. Blackstone bought the stake in a 2009 deal that valued the whole property at £2.1 billion.
!m[Private Equity Firm Selling Its Stake in London’s Broadgate Office Complex ](/uploads/story/4947/thumbs/pic1_inline.jpg)
Broadgate, located in the heart of London’s financial district, includes 16 office buildings on 30 acres (12 hectares), along with restaurants, pubs, stores and health clubs. The office complex is about 96-percent occupied, according to information from the website of co-owner British Land (LON:BLND). The UK REIT has said that it plans to keep its stake in Broadgate after Blackstone sells its interest, *Bloomberg* has reported. Reuters has noted that by selling its stake in Broadgate Blackstone will be able to return more cash to its investors as it pitches them for a new European fund.
**The Blackstone share price, which has gained almost 38 percent in the year to date, closed yesterday’s trading session in New York 1.24 percent down at $21.47.**
**The British Land share price in London was 0.16 percent higher at £568.89p as of 10:16 BST today. The stock has gained 1.23 percent since the beginning of 2013.**